Affiliate marketing is big business, and is expected to grow from $4.6 billion in sales now to more than $6.8 billion in the next five years, according to a report released today by Rakuten Affiliate Network that was commissioned to Forrester Consulting.
The researchers polled more than 150 “decision-makers” in the advertising sector at companies with more than $200 million in annual revenue. The survey showed that close to 90 percent of the respondents said affiliate programs “were important or very important to their overall marketing strategy, and the majority of publishers revealed that affiliate partnerships drove more than 20 percent of annual revenue.”
Adam Weiss, general manager and senior vice president of Rakuten Affiliate Network, said when done right, affiliate marketing “cultivates mutually beneficial and authentic relationships between brands and publishers, and those publishers and their audience.”
Affiliate marketing is a performance-based form of online marketing where companies pay affiliates who drive traffic and sales to their e-commerce sites. In the retail and fashion apparel space, many of these affiliates are fashion bloggers and influencers, and many work in affiliate networks. What sets affiliate marketing apart from other campaigns is that the return on investment is more clearly seen. Consumers click through a blog post, for example, to a brand’s site and can then shop and buy a product, which all generates trackable and measurable data.
The researchers said in the report that “the affiliate marketing space has matured into a significant channel for driving sales for advertisers of all sizes.” The firm noted that affiliate marketing spend in the U.S. is poised to see a compound annual growth rate of 10.1 percent between 2015 and 2020.
The poll showed that marketers use affiliate programs at all stages of a shopper’s journey as 83 percent of respondents “targeted consumers during the discovery and awareness phase,” the research authors said. The authors said advertisers are getting better at gathering and measuring various tracking metrics with 80 percent of marketers saying they tracked desktop and mobile sales through affiliate programs, and 66 percent noting that they tracked catalogue-driven sales via affiliate campaigns.
In regard to connecting with publishers, 83 percent of those polled said they use “affiliate network dashboards to recruit partners” while 79 percent “attend events hosted by affiliate networks.”
Some of the key recommendations from the Forrester researchers include: a need to better understand the role of affiliate marketing as it compares to other marketing efforts; working with affiliate networks as a way to mitigate fraud, and, for publishers, better grasping and understanding the needs of advertisers and what they look for in a publisher.