| September 27, 2016
If you aren’t familiar with affiliate marketing, you might not know that it is a $4.2 billion dollar business set to grow to $6.8 billion by 2020. Or that nearly 7,000 marketers attend a conference called Affiliate Summit twice each year. Or that 80% of advertisers allocate 10% of their marketing budget to affiliate marketing. That last stat comes from a new report conducted by Forrester Consulting entitled Networks Help Drive Affiliate Marketing Into the Mainstream.
You may also be unaware that recently, affiliate network Commission Junction (and all its subsidiaries) was acquired by digital marketing firm Conversant (formerly known as ValueClick), which was then acquired by data marketer Alliance Data for $2.3 billion. Ebates was acquired by Japanese ecommerce firm Rakuten for $1 billion. Most recently, backed by Banneker Partners and Permira Funds, Pepperjam acquired AdAssured, a retail brand compliance company.
Or how about the finding from predictive analytics ecommerce firm Custora, which found affiliate marketing will affect 14% of all ecommerce purchases in the United States? Couple that with Forrester’s prediction that 2016 US ecommerce sales will hit $279 billion, and you have affiliate marketing affecting $39 billion in sales.
The growth of social media and its influencers, along with the content networks that support them, has also contributed to the exponential growth of affiliate marketing far outside the initially intimate conclave of early affiliate marketing practitioners.
So, yes, affiliate marketing has greatly matured in recent years. It has grown into a full-fledged category on mainstream marketing that, according to Forrester, has more than 80% of advertisers and 84% of publishers running affiliate programs as part of their marketing efforts.
There is also an incredibly important and beneficial aspect of affiliate marketing that many outside the space do not understand. Almost all of the costs to marketers and advertisers for affiliate marketing are not paid until after a sale is made. It’s an entirely commissioned-based approach that eliminates much of the financial risk associated with more traditional methods of marketing. In short, if you don’t sell product, you don’t pay. But, you receive all of the marketing and promotion that came with promoting your brand and product through affiliate marketing for free.
The Forrester study summed up the benefits of affiliate marketing quite nicely, concluding, “Affiliate marketing, once regarded more as a tool to drive consumers to the purchase event, is now viewed as a powerful channel for consumer discovery that leads to brand engagement and incremental sales at compelling ROIs. Advertisers are increasingly relying on the affiliate channel to broaden their brand exposure with relevant context.”
Affiliate marketing has indeed matured and grown into a well-developed, sophisticated form of marketing that has disrupted many other more traditional channels. It’s perfect for the content marketing/influencer revolution. And, it is hands down the most risk-free, ROI-centric online marketing endeavor that can be implemented.