IAB Australia have released their latest industry review of affiliate and partnership marketing, which is a collective sentiment of Australian advertisers and publishers. The review, which is the third annual publication of its kind, was produced in conjunction with the IAB’s Affiliate Marketing Working Group.
What is affiliate & partnership marketing?
Affiliate marketing is essentially a subcategory of partnership marketing, which involves a wider span of business collaboration. Affiliate marketing, however, involves a more direct value exchange between the brand and the affiliate. In most cases, the affiliate will receive a commission for marketing the brand’s product or offering, which is usually transacted on a cost per action (CPA) basis.
Where have I seen affiliate marketing before?
Affiliate marketing is becoming a prominent, valuable acquisition channel for advertisers. This, in turn, is driving a growing stream of revenue for publishers. One of the most valued types of affiliate are Reward partners, which refer to cashback & loyalty programs that can be leveraged as a form of partnered marketing. As affiliate marketing is more often than not traded on a CPA payment model, the return on investment is guaranteed. The brand is also often able to negotiate an offer or take advantage of affiliate promotion schemes.
What did IAB find?
The IAB review revealed that 69% of advertisers are reporting increases in budget for affiliate marketing over the past year, with 68% intending to re-invest this allocation in the next year. While affiliate operations exist across the majority of brand verticals, retail, fashion and e-commerce are seeing the greatest scale of affiliate trade, due to the fast-paced conversion rate of these products.
What is next for affiliate marketing?
Due to the direct correlation between conversion value and affiliate trading, it is unsurprising that sales and ROI (return on investment) KPIs and the key success metrics for advertisers in this space. Also unsurprisingly, the report notes the key focus of publishers is partnership growth, with 82% of publishers increasing their span of affiliate partners over the last two years. Possibly the key takeaway, however, is that the affiliate space continues to rely on third party cookie tracking to assess the attribution of affiliate campaigns. Nearly a third of affiliate advertisers have not begun making preparations for the loss of cookies, or simply do not understand the issue.
Still not clear on the purpose of affiliates? Your ADMATICian is happy to discuss the value proposition of partnership marketing.