Online performance marketing spend reached £1.578 billion in the UK last year, according to the IAB and PwC’s Online Performance Marketing (OPM) study, released alongside their wider digital ad spend findings today (April 12).
The researchers class OPM as affiliate marketing, which constitutes 88%, and lead generation activity, which makes up 12%. Overall, the practices combined saw like-for-like growth of 12% throughout 2016, or a £170 million lift in year-on-year spend.
Generating £12.30 for every £1 spent, OPM activity has generated £19.4 billion in sales throughout 2016 – a 16% hike on 2015 – driven by 5.6 billion clicks throughout the period, or “176 a second”.
“Affiliate is rapidly proving itself to be the most effective type of marketing and the attraction is clear,” commented Skimlinks’ CEO and co-founder, Alicia Navarro.
“It outflanks ad blockers, is highly engaging content that draws users to a site, is only paid on a sale, and publishers will write authentic editorial content in advance of earnings, essentially making it ‘earned media’.”
As seen in the graph below, the finance sector is behind nearly a third (32%) of this spend, while travel & leisure follows with 17%, and the retail and gaming verticals each take a 14% share.
With the Digital Ad Spend study revealing mobile investment shot up 50% on 2015’s figures, unsurprisingly, OPM spend has been particularly pronounced on mobile, which alone saw a 23% like-for-like growth in spend from 2015.
Meanwhile, in the wider view of digital marketing, the IAB and PwC estimate that OPM makes up 8-10% of UK online ad spend, 8% of UK retail e-commerce and 1% of the UK’s entire GDP.