Nicola Wellington, UK Marketing Manager
Nicola Wellington, UK Marketing Manager
Brand marketers continue to navigate a complex landscape, balancing ambitious marketing goals for 2023 with unprecedentedly challenging economic conditions. With consumer confidence at an all-time low and inflation at an all-time high, the affiliate channel remains a strong pillar of transparency in the face of marketing adversity.
The UK industry-wide survey conducted by leading networks and platforms (Awin, CJ, impact, attraction, Tradedoubler, Acceleration Partners, Optimize, Rakuten) assessed responses from over 100 leading advertisers and agencies. We uncovered how affiliate channels are used and evaluated. As we enter 2023.
1. return on investment, return on investment, return on investment
It may come as no surprise that return on investment is the number one consideration for brands and agencies in their affiliate marketing efforts, followed by sales volume and profitability. While challenging macro factors continue to impact businesses of all sizes, affiliate channels have historically been rated as resilient amid economic pressures. Built on a cost-per-acquisition model, it enables brands to creatively test new digital strategies thanks to a wide selection of partners and the unparalleled control the model provides. For almost two-thirds of respondents, affiliate income accounts for more than 10% of the advertiser's total income. With the increasing choice of publishers and technology partners an advertiser can work with, affiliates remain a safe haven for advertising dollars as they are locked in with a clear ROI.
2. Affiliate ad spending will increase in 2023
When asked if advertisers and agencies plan to invest more in advertising dollars with affiliates in 2023, nearly half (46%) said they would. In fact, this is 15 times more than the companies planning to cut spending. Additionally, 39% said they would invest around the same level. No government agency respondents had plans to reduce spending. When asked how much they currently invest in the channel, almost a third say they spend at least £600,000 a year, and 7% say they invest more than £10 million. A deep dive into the data reveals that larger affiliate programs are more likely to increase their budgets. This is likely due to program maturity, strategic focus, and greater confidence in the channel as a safe investment compared to other marketing avenues.
3. CPA transparency gives you marketing confidence
Our findings reveal that the majority of advertisers remain overwhelmingly pay-for-performance. 95% of clients use the traditional CPA payment model, followed by tenants and bonuses at 56%. With flexible commission models and clear attribution data, the transparency and insight generated by affiliate channels allows brands to make the most of their impact on margins and profitability, as spending conditions typically come under greater scrutiny when economic conditions worsen. You can implement and refine your strategy without giving away.
Four. Marketers embrace partner diversity
Almost half (47%) of respondents feel there are more partnership opportunities within the channel today compared to a year ago. There is a growing desire for affiliate partners who can achieve more than just driving profitable sales volumes, and brands are targeting more like editors and influencers as his key targets in 2023. We identify top-funnel awareness boosters. Additionally, the emergence of affiliate brand partnerships and technology solutions providers is helping advertisers implement broader digital strategies and reduce their reliance on one or two core partners and traditional lower-funnel customer bases. We are paving the way for
Five. Support in times of crisis
The most important sentiment across the survey data was a positive opinion of the channel and its ability to support business needs during the current crisis. More than two-thirds of respondents say affiliate and partner marketing will become more important to achieving their marketing goals in 2023. The affiliate industry experienced significant growth and development after the 2008 recession as online purchasing behavior evolved. We expect to see similar growth in the industry in the coming months as declining consumer confidence and the continued cost of living crisis cause economic turmoil in 2023.
Uncertainty will undoubtedly continue throughout 2023, but advertisers and agencies can protect themselves from this disruption by leveraging choice, creativity, and control over partner marketing channels. Advertisers can continue to succeed and grow by leveraging new partner types and low-risk payment models to drive increased revenue and ROI.
