Earlier this year, Forrester estimated the affiliate marketing industry would grow to $4.5 billion by 2016. The key drivers for this growth are expected to be the affiliate channel’s ability to produce new-to-file customers, generate incremental customer acquisition, and attract consumers who spend more than the average online shopper.
While all indicators point to marketers investing more in the affiliate channel in 2013, where and how those budgets are allocated will vary. Here’s how I believe we’ll see those investments divided — among the following five key areas.
1. Global Expansion
As marketers continue to scope out new opportunities overseas, the affiliate channel will be embraced as one of the most effective ways to enter new markets. The primary reasons for this being that its pay-for-performance model represents low risk and low overhead while also providing access to local marketing experts without having to bring on full-time staff.
Specifically, if you’re looking for high-growth areas where affiliates can drive new opportunities, you may want to consider Australia. As a result of its new National Broadband Network (NBN), online retail spending there is on an upward trajectory according to the National Australia Bank Online Retail Sales Index.
Additionally, according to a study by McKinsey & Company, over the next 13 years, 440 emerging market cities are expected to contribute around half of global economic growth from 2010-2025. These cities include Mexico City, Lima, Santiago, Sao Paulo, Moscow and Bangalore.
The full report is worth a closer look if you’re determining which high-growth areas are most closely aligned with your offerings so that you can refine your e-commerce strategy.
2. Fortifying A Foundation For Partnerships That Will Drive Mobile
Mobile growth is likely on everybody’s list of top trends for 2013 and beyond. Yet, looking at the mobile market from a retailer’s perspective, it’s clear that while mobile commerce adoption has been slow and steady over the past five years, this area will see significant growth in the near future.
In fact, retail is projected to be the fastest-growing category in mobile commerce, reaping approximately $25 billion by 2017 according to the annual “State of Retailing Online” study conducted by Forrester Research and Shop.org.
For advertisers to make the most of the burgeoning m-commerce opportunities through the affiliate channel, there are two key areas that can’t be overlooked.
First is the need to ensure that the end-to-end consumer experience on a mobile device is fast, fun, and easy. That includes the publisher site as well as the advertiser site. If there are any hiccups in the process from the moment a customer visits the site through the shopping process and especially at checkout, advertisers run the risk of alienating shoppers.
The second critical success factor is the assurance that publishers are properly credited for mobile transactions. When you consider the anticipated growth of the mobile market, now is the time for advertisers to form strong ties to the publisher community.
Key to sustaining these relationships is partnering with an affiliate network that conducts regular and rigorous testing on mobile devices to ensure publishers are duly recognized for their efforts.
3. Omni-Channel Retailing
Retailers will strive to provide a seamless consumer shopping experience across every platform while presenting the right offer at the right time on the right device.
Advertisers looking to improve their omni-channel retailing strategy should view the affiliate channel as a critical piece in a multi-faceted marketing plan for the following three reasons.
- It’s aligned with the way that consumers shop and behave
- It’s a proven acquisition channel for new customers and provides a low risk opportunity to try new ideas
- Deal-driven consumers turn to affiliate sites first and frequently, because they believe offers from affiliate sites are better than those presented on a retailer’s website
4. Tighter Integration Of Marketing Channels
It only makes sense that along with the rise in omni-channel retailing, we’ll also see tighter integration of marketing channels. Performance marketing, for example, will be more closely aligned with retargeting and display.
While marketing disciplines require a depth of expertise, bringing together the teams responsible for driving individual channel return can help to proactively identify opportunities to drive more sales, ensure consistent campaign messaging, and strengthen the collective knowledge of the entire team.
Also, when these elements are brought together and marketing silos are eliminated, advertisers will see stronger campaign results. In addition, big data solutions that include affiliate program data will enable more targeted, timely ads and offers to be delivered at the right audience at the right time on the right device.
5. Refinement Of Social Media And Affiliate Marketing Practices
The role of affiliates in social media continues to be a point of discussion among marketers.
On the one hand, you have naysayers that have tuned out affiliates in social media based on some less-than-glowing behavior from a small percentage of the community.
Yet, on a more positive note, according to the 2012 AffStat report, 60 percent of affiliates use social media to drive traffic, second only to search engine optimization.
Affiliates hoping to achieve success in social media channels should focus on being aligned with their advertiser partners and their social marketing objectives — in effect, being an extension of the partners’ social marketing strategy.
For example, if you’re promoting a particular electronics product, you may want to share industry knowledge and tips as well as initiate conversations and chime in on relevant discussions, so you’ll be seen as a knowledgeable industry resource. Just make sure to follow FTC guidelines and disclose clearly on your site that you are being paid a commission.
Since sharing and engagement are the foundations of social media, it only makes sense that affiliates apply these principles when they join social networks on behalf of retailers.
While we’re not likely to see major disruptions in performance marketing in the coming year, we will see its role elevate as CMOs continue to invest in the marketing vehicles that deliver the highest ROI..