The IAB 2014 Online Performance Marketing report makes for excellent reading. If you haven’t already, I would encourage you to take a look at the overview. As an industry we have known for some time that the performance channel brings real value to advertisers both in terms of their investment but also how it bolsters brand credentials. To see this confirmed in the study is fantastic.
For me the key highlights are the growth of the industry, the ROI it’s generating for advertisers and the conversion rate, all of which are simply unprecedented. Suffice to say there are loads of other excellent stats contained within the study, but rather than simply talking about how great the industry is, the key thing for me is that now we have all this great data, what does it allow us to do and how can we use it in the future?
From my perspective the key objective of the study was to highlight to advertisers the opportunities in affiliate marketing and therefore why they should look to invest more of their marketing budget in the affiliate channel. On this basis there is little point in simply sharing the information amongst our industry and with our clients, who know this already. We’d be preaching to the converted and not making any headway in educating the wider marketing community about the real, tangible value that affiliates bring to a brand.
Getting marketing directors and CMOs to sit up and take notice
The biggest challenge for advertisers is knowing where they should spend their marketing budget in order to get the best return. Days when cash could be splashed about and results related to ‘feel good factor’ and ‘awareness’ are long gone (almost). Brands, regardless of their size, are leaner and their investment is made strategic, driven by a need to see tangible results and the ability to prove bottom line growth.
Whilst other channels such as display and search have always been able to make a very good – and successful – case for why budgets should be invested in them, the affiliate channel has always seemed to struggle. It could be argued that as these disciplines are less complex than the affiliate channel, it’s an easier decision to make. But personally I have never felt that as an industry we do enough to make the thought of reassigning marketing spend to the affiliate channel an easy one. This report is, in my opinion, our opportunity, to make a compelling and attractive case for why the affiliate channel deserves more of the marketing budget pie. Whilst the maths behind the report might be complicated, the results stats are simple and impactful.
Having spent four years client side, I can absolutely tell you that if someone had offered me a channel which delivered £14:1 ROI, with a five% conversion rate and brand reach across over 12,000 qualified affiliated sites that not only helped consumers to discover new brands (hopefully mine), but then converted them into repeat customers, I would have literally bitten their hand off. And so would any one of my colleagues in the marketing department.
Of course I’m not advocating that marketing budgets be focused just on the affiliate channel. That would obviously be unwise and not reflective of how consumers research and purchase their goods. A good marketing plan covers the entire spectrum of on and offline channels. But the fact remains that the affiliate channel enables advertisers to reach a wide range of touch points across the consumer journey – not just at the last click, but also throughout their path to purchase – and it deserves more recognition for this.
Industry growth
The report already shows good growth potential for the affiliate channel, particularly from cashback, price comparison and content affiliates. But to my mind this isn’t enough. To drive long-term growth we need advertisers to invest more in the channel and that means every stakeholder in the affiliate industry – from networks to publishers – using the IAB report to educate brands about what the channel has to offer and the results it can offer.
2014 is going to be an exciting year for the affiliate channel. Quite possibly it could be the year that we finally get on the radar of the budget holders. And what’s in it for them? Good quality, incremental sales with unrivalled ROI. Everyone’s a winner.
For more on the report check out the articles below:
Online Performance Marketing Generates £14 Billion in Sales
OPM Study Analysis – a £14bn Breakdown of Sales & Expenditure in the UK