In preparation for the new year, PerformanceIN continues its annual tradition of connecting with performance marketing experts to get their single biggest prediction for the industry in 2017.
In this piece, Clare O’Brien, IAB UK’s head of industry programmes, explains why she believes 2017 might be the year affiliate marketing goes mainstream.
This could sound like one of those ‘year of mobile’ pieces… and why not? The affiliate model is a sleeping giant in the wings of the stage that is the digital advertising economy. But the £17.7bn it generates in sales (IAB/PwC OPM Study 2015) is only set to grow and is getting harder to ignore by most of the brands, retailers and service suppliers becoming increasingly dependent on its revenues.
The sheer diversity and adaptability of the model is clearly becoming more attractive, as is the understanding of its low risk economics at a time of immense change in the media, advertising and retail industries. However, the affiliate industry needs to shift its attention to senior relationship-building to ensure presence at the top table.
When the 2016 OPM numbers are released next April, we’re anticipating a continued growth in both spend and sales value. It’s possible, based on a growth rate of 8%, we’ll see at least a £18.5bn sales value with spend investment pushing through £1.4bn. A pretty healthy situation and one driving some key imperatives. Here are four reasons why 2017 may be the year we see the affiliate model going mainstream.
Online to offline (O2O)
Key for retailers in every sector is the drive to connect the digital with the physical, online behaviours with offline and vice versa. This hasn’t escaped the attention of the affiliate industry – voucher codes, loyalty, cashback and payment channels are already providing retailers and brands with built-in tracking processes delivering sales and marketing ROI. This is affiliate’s biggest opportunity to sit at the top table to help business develop smart solutions that de-silo organisational thinking to work out how multi-channel marketing really works.
Publisher revenue development: Big news on the news brand front is that most traditional publishers are developing their affiliate offer. With print revenues falling and straight digital revenues needing a boost across the board, news brands are realising the low risk affiliate model enables them to build new kinds of relationships with advertisers to provide loyal audiences with the kind of offers that deepen that loyalty. These audiences are huge – 50m+ monthly on PC, smartphone and tablet, April to April 2015-16.
Yes – it is beginning to happen… performance affiliate numbers are producing significant returns – too big to ignore. But the big story the affiliate industry needs to develop more strongly is the brand return. With an average conversion of 5% there are more than 4 billion actual brand engagements (clicks) that aren’t currently part of the strategic marketing plan. In January, we’ll be going big on this at the IAB’s Performance Affiliate Conference, designed to make the industry more visible to senior marketers and publishers.
Quite simply just that. The numbers speak on behalf of the industry, and that’s without across-the-board senior focus. An 8% growth in spend and 5% growth in sales value according to OPM 2015. Integrated within the overall business strategy, this growth can only accelerate.
2017 can be the year the affiliate model goes mainstream, picking up its long-awaited on-stage role in the marketing ensemble production. It’s your role to take. Now is not the time for stage fright.