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Why no one Cares About Affiliate Marketing (And Why it is Your Fault)
Image Credit Ron Bennetts Creative Commons license

Why no one Cares About Affiliate Marketing (And Why it is Your Fault)

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So now I have your attention, hopefully that headline has at the very least irritated you, and at worst made you quite angry. Well whether we like it or not that is what some quarters of the digital world think about our bread and butter, and if you go by the latest IAB PwC AdSpend figures released yesterday then you can understand why they might feel that way.

For those who are unfamiliar with the AdSpend study, the IAB decided way back when digital was a fledgling industry, to start gauging the size of the market. Twice a year it releases a study that shows what advertisers are spending on their digital marketing across all disciplines (search, display, mobile etc). In order to do so it assesses advertising spend and for affiliate marketing that essentially means the fees paid to networks, agencies and third parties for their services but not the commissions payable to affiliates.

This second part is crucial because this is a huge additional cost to advertisers but is not reflected in the IAB figures. Therefore yesterday’s data that claimed ‘Display affiliate’ amounted to £50 million in the first six months of 2013, whilst accurate, doesn’t show the true size of our industry and pale into insignificance against the overall figure of £3bn.

Redress the Situation

Cue the Online Performance Marketing Study (OPM). Unless you’ve been living under a rock these past twelve months, you will be aware that the AMC wanted to redress this situation and show the wider world that the affiliate industry drove billions in revenue. It was tasked with assessing all spend: commissions, overrides, fees, tenancies and any other revenue that flowed through the channel, as well as the end revenue generated for retailers.

Employing the services of PwC again we were staggered when the final tally showed that the figure was close to £1 billion in all these associated costs, across both the lead generation and affiliate landscape. With an ROI of £11 to every £1 spent we finally had some killer numbers to frame the affiliate message and with huge trade press coverage there was genuine momentum behind our collective efforts to evangelise the channel to a wider audience.

The OPM was truly groundbreaking. Never before had the affiliate channel, in any global market, produced quantifiable data to show what it was capable of. The Study has to be repeated: it’s not a one off project. It needs to show the growth of the industry, the changing models and the various complexions.

Affiliate Marketing Hangs in the Balance

But that is in jeopardy. Research like this doesn’t come cheap. Last year’s survey cost nearly six figures to produce, with 25 companies contributing and the IAB stumping up the shortfall. This year that figure is slightly lower but there is a continuing shortfall. Some companies have simply refused to pay (the irony being that many of these have happily triumphed and quoted the numbers in their own marketing documents and sales pitches).

The stark truth is, if we cannot fund this project on an annual basis it won’t be part of our affiliate calendar. We won’t be able to talk about the value of different sectors or affiliates. The case studies and anecdotal data showcased in the research won’t be available and we’ll slip down the digital priority list again. Sponsorship is still needed and networks, agencies, larger advertisers and affiliates have a duty to ensure it’s forthcoming.

So to those companies who have contributed you should be proud that you are helping to drive extra marketing spend into the channel, but ultimately as a collective we face a future where we risk being nothing more than an almost invisible footnote in the digital marketing landscape.

If you would like to contribute to the Study, the cost is relatively small and every contributing company will receive acknowledgment in all the marketing collateral as well as a link on the IAB’s site to your organisation.

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Kevin Edwards

Kevin Edwards

Kevin Edwards has over 15 years experience working for affiliate networks.

Working as global client strategy director for Awin, Kevin is responsible for empowering the company’s employees and clients with the right data and insights to make the most informed decisions about their campaigns. He also takes an active role in creating best practice standards and self-regulation. Kevin was previously Chair of the Affiliate Marketing Council in the UK and continues to play an active role in the IAB’s Legislation and Standards’ Committee.

 

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