The Awin Report is a goldmine for those in the affiliate industry. Packed full of insight into the rapidly changing market, the report provides a detailed overview from 12 regions across the world.
We recently discussed some of our key takeaways from the report, but what better way to understand the conclusions drawn than by speaking to an insider?
Kevin Edwards, Global Client Strategy Director at Awin, spoke to PerformanceIN about this year’s report, as well as the trends that have remained prevalent since the reports inception five years ago.
Firstly, could you summarise how you see the current state of affiliate marketing as we enter 2021?
I’m quite conflicted about where affiliate marketing is at the moment. There’s plenty of momentum in certain areas of the industry but it’s difficult to know how some of it will play out longer term. There’s a very tangible, accelerated pace of change after what I’d call a fallow period of around five or six years ago. Looking more widely, the threats have never been clearer, especially for those who operate programmatically because outside of the auspices of the tech giants, digital marketing feels squeezed and threatened.
The channel actually has a really robust story to tell, it can definitely carve out its own niche, if it nails its messaging and positioning. It’s a safe harbour for brands with data-light, privacy first credentials. Affiliates also have a unique connection with their audiences that other channels don’t, with an ability to communicate the value of an ad funded internet, something that is really underplayed and undervalued.
One of the most impressive themes we cover in the report is the increasing diversity of the publisher base and how brands are finally thinking far more creatively about what an affiliate is and what they can do. Affiliate marketing isn’t viewed as just an acquisition channel anymore, it can also perform branding and retention roles for brands which we’re finding is starting to resonate. Tech partners are also changing the landscape, I like to think the channel can now support brands with challenges they have with conversion, usability, upselling and cross-selling, all bundled within an open performance ecosystem.
It’s also proving transformational for media houses in a way that we always hoped it would but it’s taken until quite recently to really bear fruit. One of the most impressive stats I’ve seen is how Future’s publications drove almost 14 million affiliate e-commerce transactions in 2020, up from two million in 2017. At the same time their reliance on Amazon has dropped significantly. That’s huge and should make us all sit up and take notice.
One area I’m personally concerned about is the lack of industry collaboration. I think we did an impressive job a decade ago at demonstrating how transparent and mature the channel is but that’s fallen away significantly. We need a strong collective voice as the climate is so volatile.
In the 2017 report, the impact smartphones have had upon customer journeys and affiliate tracking was discussed. How have things progressed with tracking since then?
The tracking narrative for the affiliate channel is quite muddy, but then I think it is for everyone. With my Awin hat on, we’ve invested in a dedicated team that is building tech that both mitigates the impact of tracking changes while developing new, privacy conscious solutions. But there is still work to do to communicate this clearly and effectively, not to mention showcasing the positive consequences we’re seeing from proprietary tech like Bounceless tracking which is helping to speed up page loads and, as a consequence, click to sale conversion rates.
Tracking is a war being fought on more than one front though; brands and publishers are becoming increasingly aware of the need to obtain cookie consent from consumers. There’s been very little debate about this, possibly because the pandemic has put a lot of projects on ice, but we should anticipate growing curiosity in the next 12 months. I’m fearful that with programmatic dominating the debate, affiliate marketing gets scooped up and dumped into the same categorisation as far more invasive forms of advertising.
I’ve been chatting to a couple of competitor businesses about a potential industry initiative which is in the planning stage at the moment, so let’s see what comes from that, but we need clarity soon for the wider affiliate community.
Aside from that and thinking about positive tracking developments that are within our control, we’ve seen impressive progress on in-app tracking of purchases which grew 17 fold from Black Friday 2019 to 2020. Also as we’ve essentially become a cashless society, there seems a reinvigorated interest in the online to offline pieces. We cover both these topics in the Awin Report with interviews and case studies.
What is one trend that has remained prevalent throughout all of the reports?
This year we played on the theme of resilience as one of the affiliate channel’s strengths, but that could really be used interchangeably for any of the editions. Affiliate programmes have a chameleon-like ability to morph into new entities, possibly because they’re ‘always on’ so they bend and shift according to the changing digital landscape.
We’ve always used the report as a platform for businesses to share their best practice, successes, and techniques. In the first edition we featured a series of companies that were at the forefront of innovation, helping to shape the next generation of affiliate marketing and we revisited that idea in 2021. I’m not someone who bashes incentive publishers as the industry has built much of its success on their performance, but it’s really important that brands know their options are so much more diverse that discounting, coupons and rewards. Indeed we’re increasingly seeing the channel as something that enables brands to outsource their innovation to tech partners who can help them address bottlenecks or challenges they have across the purchase path. This is an area that is set to grow and grow.
If you had to choose one key takeaway from the 2021 report, what would it be?
I want people to be excited by the scope of the affiliate industry. If you spend a lunch hour reading through the content you’ll find evidence of how dozens of companies – we had more than 100 contributors – are turning to a diverse range of partners to drive new customers and support wider branding and performance campaigns. They’re able to do it because the channel offers an open and potentially unlimited source of ways to connect them with their next customer. That’s really powerful, not to mention incredibly accessible.
Whether you’re a fresh-faced start-up or a seasoned retailer, the channel provides you with endless possibilities to build direct relationships with consumers. Also if you want to understand how affiliates can deliver rapid, effective change, listen to our interview with tastecard who faced a seemingly insurmountable challenge in 2020 that the affiliate channel helped tackle.
This year, the format was an entirely different format. How did that come about?
The pandemic made that decision for us. Without any physical events to attend, a printed version of the report seemed redundant. So the online Awin Report was born. It presented a whole new set of avenues to explore, not least the ability to feature more varied media formats including video intros from our respective regional heads and audio interviews with a variety of our partners. Also all the content is easily signposted and bookmarked now, so it’s far easier to direct people to the relevant sections they’re looking for.
Kat, our in-house designer, worked on the project for three months and I was really impressed with how she brought a set of ideas swirling around in our heads to life.
This year’s theme was the adaptability and resilience of the affiliate channel. If the pandemic hadn’t happened and the industry hadn’t had to adapt to the issues surrounding it, what do you think another key theme of this year would have been?
I think we’d probably be discussing the same things but with our sights set lower. There’s that often quoted US ecommerce stat that shows the pandemic delivered ten years of online retail growth in ten weeks. Generally I believe we’d be on the same path but ambling along with less of a sense of purpose.
I’d like to think Awin Access would still have been a triumph. Our small business and start-up product was launched in the UK before lockdowns had even been considered in Europe so it was already a fully-fledged priority for 2020. That said we found a surge of interest from SMEs looking to expedite their digital marketing plans as lockdowns took hold which also brought forward our launches in other markets across Europe.
I also think we would have been pushing the outsourcing innovation message to brands. If you’re an advertiser and faced with building proprietary ecommerce functionality, but you also have the option to partner with a network that can effectively contract those functions out to businesses on a performance basis, why not take this short cut? There’s no doubt this is where we are seeing a big portion of industry innovation at present.
Finally tracking would still be the interminable albatross around all our necks and we’d still be discussing the same issues and tactics in the same meetings, the only difference they would probably be face to face and in person.
Influencer marketing has progressed a lot since the first report. Where do you think it now sits within the affiliate marketing industry?
I’m always a little nonplussed by the impact influencer marketing has had in the affiliate industry but that could change substantially this year with certain developments.
I think there was a feeling a few years ago that much of the activity would naturally gravitate to the affiliate channel and I probably wrote at the time about how influencer marketing is affiliate marketing by another name. But I think it still sits quite separately if you’re talking about what you might label ‘classic’ influencer marketing.
Perhaps there has been a blurring of the lines about what an influencer is, and probably some affiliates have rebranded themselves as such. I also feel that smaller influencers are probably more likely to be found via the affiliate channel, certainly they seem to be a better fit for SMEs. We’ve noticed that many small businesses selling niche or individual products resonate with ‘micro’ influencers who have very engaged audiences.
I’m keenly watching what Tik Tok does, especially their tie up with Shopify, one of the most interesting businesses in the online space at the moment. That could shift this whole discussion in an entirely new direction towards social commerce.
Last year was Awin’s 20th Anniversary – entering into the next decade, and embarking on the creation of Awin’s open partner ecosystem, what are your predictions for the trends we will see in next year’s report?
I’m always reluctant to make bold predictions from year to year because 12 months flies by. Also the affiliate channel has many constituent parts, some of which will carry on as before, while others may see more obvious shifts. That said, if I think about where I want Awin to be, I think we’re scratching the surface with Awin Access. According to the IAB as much as 45% of digital ad spend in the UK is spent by SMEs. This is a constituency that is woefully underserved by the affiliate channel, but it requires more than just pushing affiliate programmes to more advertisers.
On the flipside, from a brand point of view, we want to offer fully flexible and adaptable solutions that offer a compelling alternative to the closed ecosystems of Facebook, Apple and Google. No brand wants to hand 100% of their marketing budgets to these monolithic organisations who then control all the levers. It’s beholden on the industry to provide robust alternatives.
I’d like to think, therefore, that we will find at least a handful of new and compelling tech partners that we can integrate within our Mastertag so they can be switched on easily by the brands we partner with. We recently launched a gold standard for advertisers in the UK and have ambitious plans to rollout this globally. We need publishers to support the drive for better standards and fairer rewards and I hope other networks produce robust frameworks for protecting affiliate revenues.
Finally I want to place the customer front and centre of all we do and communicate, breaking down barriers and making it easier to do business. There are some big plans this year to help deliver that vision which could really step-change how we talk to our partners.
We would like to thank Kevin for taking part in this Q&A. It’s certainly thought-provoking to hear about the aspects of the industry that need work, for instance the lack of industry collaboration. Seeing how this changes over the next year or so will be very interesting indeed.
The report shows an incredible amount of positivity in terms of the channel’s progression, and we’re excitedly anticipating the developments that will come in 2021.