Last Thursday I attended Affiliate Huddle, London’s free conference which encourages the sharing of knowledge and debate around affiliate marketing. It’s organised by the same people who arrange Brighton SEO, so it drew quite a big and enthusiastic crowd.
They opened the seminar by sharing the results from the Interactive Advertising Bureau (IAB) UK and PwC affiliate marketing studies. These are important studies to help understand sector performance, the models used and mobile growth; they focused solely on affiliate networks, software as a service (SaaS) platforms and major in-house affiliate programs. PwC interviewed or surveyed the following 12 participants: Awin, Affilinet, Affiliate by Conversant, Tradedoubler, Rakuten, Optimise, Webgains, My Offers, Impact, Performance Horizon, Cake and Quidco.
Results from the IAB/PwC study
Results indicated a positive growth for the industry. Key highlights from the study show:
- Affiliate marketing spend grew 15.1% from £482 million to £554 million in 2017.
- In 2017, affiliate marketing generated nearly £8.9 billion for the advertisers. This is a 9.2% increase from the £8.1 billion generated in 2016.
- Affiliate spend on smartphones grew 49% year-on-year.
- Retail holds the largest share of affiliate revenue with 43%, while telecommunications and media hold a share of 24%.
- Affiliate marketing is averaging a 16 to 1 ROAS for advertisers.
How to grow a mature affiliate program
Mouna Laaragat and Harry Avent from Tradedoubler gave some best practices tips on how to grow a mature affiliate program. So what is a mature affiliate program and how do you address the challenges?
If you haven’t reviewed your affiliate program strategy for some time and it’s become stagnant, perhaps you have more inactive publishers than active ones, or even issues with tracking or growth stability, these can all be factors in an underachieving affiliate marketing campaign. To achieve lucrative growth you’ll need to understand the stages an affiliate program goes through and ensure active affiliates become key sales drivers rather than lapsed partners. It is also important to look at the market, your competitors and the industry.
Their advice is to consider emerging partners and opportunities, embrace innovations and new publishers and also look at cross-device data to better understand how your budget is performing across different devices and channels. This will give you a clearer picture of the user’s journey and you should gain better insight into the partners and channels that are driving you the most value. Gift cards can be used as incentives to assist with acquisition, retention and the loyalty of partners. All of these opportunities can help to grow your affiliate program and strengthen your brand or product.
Is your pay-out model best optimised for growth?
It may also be a good idea to review your pay-out models and choose different pay-outs for each publisher, depending on how profitable they are. The standard flat % CPA may need to be adapted for each partner, according to your KPIs and results for optimum ROI.
Building a strong relationship with your affiliates is key. Schedule face to face meetings, encourage collaboration and share your successes but also your challenges and needs. Having a strong relationship with your affiliates can prove to be more profitable for both parties.
Leverage your data to boost sales
Take the time to analyse and learn from your data, making sure you that you understand it fully so that you can optimise and improve your campaigns moving-forward. Is it working? Is it successful? If not, why not? Base your actions on what you learn.
The Affiliate Marketing industry is continually growing and a successful affiliate program can boost your revenue and sales, driving your business forward.
If you are looking to improve your affiliate program or build up a network of affiliates, we’ve shared some advice in our recent guide to Affiliate Marketing. It’s free to download.