US Affiliate Marketing Spending Reached $9.1 Billion in 2021
A new industry study produced by the Performance Marketing Association (PMA) shows affiliate marketing spending grew 47% versus calendar year 2018.
The affiliate trade organization reports that that affiliate marketing investment in 2021 drove $71B in e-commerce sales. PMA used underlying data provided by PricewaterhouseCoopers for its results.
The average Return on Ad Spend (ROAS) was 12:1, meaning that every dollar invested in the channel drove $12 in e-commerce revenue.
According to the PMA, a variety of forces have helped drive outstanding growth in the category:
● Increased recognition of affiliate traffic quality among senior marketing executives
● Expanding acceptance of pay-for-performance buying models among publishers
● Digital channel growth due to the effects of the COVID-19 pandemic on buyer behaviors
● Strong ROAS for affiliate marketing versus other digital marketing channels
● Increased channel adoption among new industries, including Auto, CPG, and B2B
● Growth in mobile marketing spending and improved mobile sales tracking in the channel
Cashback/Rewards/Loyalty and Coupon/Voucher/Rebate publishers accounted for just over half of category spending, up from previous years.
“Affiliate is at the forefront of improving effectiveness and outcomes for brand marketing,” said Christen Evans, PMA Board President. “This important study demonstrates the rapid growth of our industry and the many ways it is expanding to include more industries, publisher types, investors, and marketing objectives.”
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An Increased Focus on Influencers
Modern Retail points to DTC jewelry brand Dorsey as one that has begun focusing heavily on the use of influencers. They only started doing so a year ago, and the results thus far have been astonishing.
Dorsey founder and CEO Meg Strachan told the site that “from a creative perspective, people are not responding to the same kind of overproduced creative that converted customers five years ago.”
“We’re seeing our affiliate advertising partners drive up to 35% of total sales,” she added. “That doesn’t replace paid media spend, but it’s clear that over the next few years affiliate advertisers are going to replace a substantial amount of revenue historically driven by Facebook and Instagram ads.”
Today, affiliate-related sales accounts for nearly 25% of Dorsey’s annual revenue.
Affiliate marketing and influencer marketing overlap in many ways, writes Jessica Rangel of TapAffiliate.
Both marketing strategies involve using brand advocates to promote your products and services. Given the similarities, influencers can easily be welcomed into your affiliate marketing program and begin promoting your brand.
Rangel notes that audiences follow what influencers do so much so that eight out of every ten followers of an influencer ultimately makes a purchase.
It's important to realize that influencers tend to request a different payment structure than what partners may typically be used to.
Rangel points to three models in particular: No upfront fee, and pay for results only making it a low-risk investment; Pay a small fee and give them your usual commission rate; and You pay a higher fee and give them a lower commission rate.
"Real, high-quality influencers don’t recommend products they don’t use or trust themselves, and their vast audiences are often aware of that," writes Kevin Payne of Link Influence. "So this makes influencers one of the best ambassadors you can have for your brand. As true fans of your brand, they’ll champion your products and recommend you more times than the average consumer or traditional publisher."
“I think the importance of microinfluencers will increase in 2022," Şencan Özen, Owner at ReklamStore tells WeCanTrack.com. "Influencers specializing in a particular field have a great ability to convince their audiences. That’s why I think that microinfluencers who produce quality content will attract more attention of the affiliate world in 2022 with their high conversion rates. New features and trends on social media like live shopping will also give more power to marketers in this area.”
Özen suggests there has never been a better time for new affiliates as well.
“With the rise of social media platforms and their new features, the entry barrier is even lower than previous times. There are several ways that marketers can attract audiences without even building a website.”
What is the CPL Commission Model and How Does it Work?
CPL (Cost-Per-Lead) is a model in which the advertiser pays a fixed price for each lead that is generated. Examples of this could be a user signing up to a mailing list or some other form of subscription. Cost Per Lead and Pay Per Lead (PPL) are sometimes used interchangeably and typically mean the same thing.
Cost/leads = CPL
$1000 spent on campaign / 100 leads = $10
For those affiliates in the gaming sector, Affilka by SOFTSWISS made big waves this past week announcing it will be implementing the CPL model to its platform.
Affilka’s commission constructor is a flexible instrument that also allows operators to choose particular countries for CPL deals and apply a different fee rate for different GEOs if needed.
“Implementing CPL deals is another logical step in the development of our product. They offer a wealth of opportunities both for affiliates and operators. They’re great for affiliates who are just starting out in the iGaming vertical or those who want to test out new brand offers and their conversion rates as well as new GEOs. Through CPL deals, iGaming operators can increase brand awareness and attract affiliates from other niches. CPL pays less than CPA, but converts better. To reap most benefits, you need to factor in traffic quality. Luckily, our commission constructor allows you to set various rules for a CPL reward to be triggered,” noted Anastasiya Borovaya, Head of Product at Affilka by SOFTSWISS.
If you have a steady stream of quality traffic, then CPL can give you a good boost to your income, suggests EPC Matters. These types of campaigns are only geared towards sites that drive substantial traffic.
Regardless of which affiliate payment stucture one opts for, the most important thing to consider in the end is the reliability of the affiliate program itself.
- B.E. Delmer, Gambling911.com
