Helping businesses build successful partnerships since 2004, Adam Ross is the CEO of Awin, a global affiliate marketing platform.
In 2000, my company started to deal with handicrafts. The field was small and young, but full of talent and passion. Although today's professions have little in common, the spirit of innovation and creativity is the same.
Affiliate marketing is now a multi-billion dollar powerhouse and a worthwhile bet for any e-commerce business seeking sustainable growth in the global industry. At its core, it's performance-based responsive advertising that empowers millions of consumers to make better purchasing decisions every day. Businesses can use this channel to build their advertising systems, creating a galaxy of revenue streams across all media touchpoints.
Through affiliate marketing, marketers can partner with a rising TikTok star or YouTube creator to promote a new campaign. Or they might work with a glossy magazine or product review site to promote the brand. Advertisers can connect with an industry-leading comparison app or fintech innovator to find customers or reach smarter consumers through cashback or coupon communities.
And all this is achieved with low risk and a very high return on investment.
Patterns and shapes
This difference in options is the result of several factors. Let's take a look at two of the most important of the last few years.
First, I think the pandemic has increased interest and investment in the channel. Affiliate equity means that when brands are struggling, they don't know where to invest their advertising spend, seeking refuge in pay-per-acquisition (CPA) campaigns. I have come to realize that the ability of publishers to provide retailers with consistent sales without compromising cost is a lifesaver for many during this crisis.
Second, in 2020 more publisher models are realizing the benefits of affiliate marketing and using it as an important source of income. I've noticed an increase in influencer activity as creators connect with brands. Major media companies that have moved away from traditional media placements are now incorporating affiliate marketing into their content marketing strategies to better monetize traffic.
I see a pipeline of fintech companies that have created new ways to deliver personalized offers based on users' purchasing behavior. And technology partners provide advertisers with transparent marketing tools on a risk-free CPA basis.
Partner
According to a recent report from the Performance Marketing Association, the affiliate industry will grow by 47% between 2018 and the end of 2021, indicating that it is the most popular channel for marketers.
With this new flood of partnerships, I think the industry has gotten better at measuring and rewarding its partners. Labeling moves from a rigid last-click framework to more complex multi-touch decisions. Fees should not be attached to the CPA. CPC, cost per click, rental and other rewards can be combined to better reflect the value of an individual affiliate.
As I make these adjustments, I notice a virtuous circle of growth in the industry that suggests great growth in the future.
To better understand growing channel opportunities, my company surveyed hundreds of thousands of our active partners to identify our most innovative partners. Through this process, I came across five themes that illustrate affiliate marketing trends.
• The issue of ethics: The importance of ethics in business is more important than ever. Sustainability, inclusion and accessibility are key concerns for both consumers and businesses. More and more companies are trying to solve these problems with their work and services.
• Membership means more than a promo code, I think the channel has always been a world full of testers and cases. It's part of its appeal. It's a place for startups to launch, test ideas and get real-time feedback. In addition to established methods like coupon codes and cashback, you can now find fintech applications, influencer marketing platforms, affiliate commerce solutions, local optimization solutions and more.
• Innovation without risk: Many companies today have high expectations to keep up with the rapid development of technology. This often requires significant investment and time to develop the technology in-house or to acquire and implement it in an existing stack. I think the new stream of opportunities that technology partners bring to partner brands is a great example of how to take advantage of cutting-edge marketing technologies using a business model that avoids trial risk.
• Locality does not mean disability: don't be fooled by size. There are many branches that might be considered small fish in a big pond, but in their subject they can be seen as regional powerhouses. In my opinion, high-quality, high-converting content is often the holy grail of rewards. And they represent the backbone of affiliate programs around the world.
• You don't have to be a big company to be big: Don't underestimate the basics of the affiliate channel for advertisers looking to grow. Success in one area of digital marketing through strategic investments or acquisitions has led to similar experiences in other areas. Many international publishers operate as multidisciplinary and cross-regional specialists, enabling brands to reach global audiences through multiple digital touchpoints.
New heights
There are no rules - your affiliates, campaigns and strategies can be unique to you and produce amazing results. This is because you are paying for results in affiliate marketing.
Today affiliate marketing has become decentralized and democratized and I believe any business can participate. As the ad says, it's not daddy's or mommy's car. Our affiliate marketers are a new breed of marketers who are taking their business further than they ever thought possible.
The Forbes Business Council is the premier organization for developing and connecting business owners and leaders. Am I right?