I recently saw a report from BI Intelligence about affiliate marketing. I was excited to see some new data from the market researcher specifically about the affiliate space and i was also buoyed by the results, which proved out what I and my colleagues in the affiliate space have been saying for years. In short affiliate marketing is a valuable channel and that works – and often better than some other channels.
The report, “THE AFFILIATE MARKETING REPORT: How mainstream publishers and social media are driving revenue for retailers”, focuses on how growth in affiliate marketing is driven largely by two factors:adoption by mainstream media publishers and an increase in earned media via social networks. The report is a compilation of new data and some figures culled from other research firms about affiliate marketing.
Here are some of the key points from the report:
- US affiliate marketing spending reached approximately $3.4 billion in 2014, up 106% from just $1.7 billion five years prior,according to Forrester and Rakuten. This year, spending is expected to reach nearly $4 billion. Factoring in sales driven by social media publishers, the number will actually be closer to $8 billion.
- US retailers say that affiliate marketing programs are one of the most effective customer acquisition channels.In a 2014 Shop.org survey 40% of US retailers cited affiliate programs as their leading customer acquisition channel, following only organic trafficto shopping sites and search marketing.
- Shoppers who frequently purchase on affiliate marketing sites are four times more likely to try a new brand than the average shopper, according to Forrester.
- Customers who complete purchases via affiliate programs tend to be bargain shoppers but end up spending more than the average consumer.
- Consumers who shop using affiliate links spend $7 more per purchase than the average shopper,according to Juniper Research.
- Nearly three quarters (74%) of US shoppers say they visit two to three non retail websites before completing a purchase, and 16% say they visit more than four websites, according to Rakuten and Forrester data.
- Shoppers who visited four or more non retail websites before making a purchase spent $1,712 online over a 12 month period,while those who didn’t visit nonretail sites spent $1,226 over the same period,according to Forrester and Rakuten.
- At a time when other referral channels, such as organic search and direct traffic, are declining. Affiliate marketing rose from 13% of US ecommerce orders in 2014 to 16% in 2015, while organic search declined from 24% to 21% and direct traffic declined from 23% to 19%, according to Custora.
- Enlisting influencers on social media and on other publishing platforms has become a high value proposition for brands that sell packaged goods or clothing. CPG and apparel brands generate the highest return on investment from social media.On average, CPG brands earned $11.33 for every $1 spent on influencer marketing programs in 2014, according to Burst Media. Apparel brands earned $10.48 for every $1 spent.
- Smartphones and tablets now account for nearly 60% of time spent shopping online in the US, according to comScore. However, the same research indicates only $1 in every $6 spent online comes from mobile.
And if this wasn’t enough data, we were recently interviewing a job candidate who previously worked for a major digital agency where he ran, PPC, affiliate, social, YouTube and more channels for a major brand. Not unsurprisingly, at least to us, the affiliate channel was their MOST PROFITABLE online marketing channel.This is just more anecdotal evidence. We see it everyday with our client – over and over again.
Collectively this is all great news as it gives online marketers the chance to spread the good word about the affiliate marketing. The key to continued growth in the affiliate channel is attracting more brands, which in turn attracts more publishers to promote offers. The growth is being fueled by many factors including social media, the rise of mobile commerce, the desire for ROI on new customer acquisition and demand for a measurable monetization method.I expect to see even more future growth as the affiliate space continues on this valuable, proven path.