The lack of control is causing marketers to diversify their spending away from big technology. Fortunately, there are similarities between the current challenges and the strengths of affiliate marketing.
Awin's recent research with Forrester revealed a number of important findings regarding the current views of senior marketers. Along with insights about goals, individual channel effectiveness, and budget allocation, he had one insight in particular that stood out to him.
Despite their gravity-defying rise to dominance, big tech companies appear to face some very real challenges, analysts say. The survey found that 44% of marketers in Europe and the US cite diversifying their ad spend away from big tech platforms as their top goal this year. Of this group, 77% allocated a budget and put their plan into action to make this happen.
This is a complete reversal from the situation that emerged after the pandemic. Just three years ago, WARC reported that Alphabet, Meta, and Amazon accounted for nearly half (46%) of all ad spending, up from 34% in 2019. This doesn't take into account the budget dedicated to emerging tech giants like TikTok. US advertising revenue is expected to reach $8.7bn (£6.9bn) in 2024.
Three years later, fears of an even bigger monopoly appear to have subsided. Rather than moving forward, marketers seem to be pushing back on their investments.
Why are big technology companies underperforming?
There may be many plausible theories guiding this sudden change in momentum. Last year, WARC predicted the outlook for “Big Tech” platforms due to changing market dynamics and industry concerns about their dominance. The 2023 Marketer's Toolkit reveals that investment in Facebook has fallen for the first time in six years, signaling a reassessment of the relationship.
Long-standing issues with transparency in the big tech industry have led to numerous claims, including Facebook overestimating viewership numbers and claiming that up to 75% of YouTube in-stream ads served over the past three years were never viewed. It has generated headlines.
To get to the bottom of things, Awin and Forrester asked marketers to name their biggest challenges when working with big tech. These were accompanied by statements that added further context to the issue at hand. See if you can find any new themes.
- Strategic guidance (68%): General advice or automated recommendations don't address specific business needs.
- Inadequate reporting (68%): Reports provided do not provide detailed insights or are too general to make informed decisions.
- Ability to predict results (67%): When launching a campaign on a major technology platform, it is difficult to accurately predict the results.
- Unresponsive customer support (64%): When you ask for help with a campaign issue, you often get delayed or generic responses.
- Inflexible pricing model (64%): Limited ability to negotiate or adjust advertising costs based on campaign needs.
Limited guidance, inadequate reporting, inability to accurately predict, unresponsive support, and inflexible pricing. The common thread in all five of these problems is a lack of control.
After all, today's marketers don't feel like they're in charge of their own destiny when it comes to advertising on huge global platforms.
Relatively high consensus on these various challenges is unlikely to provide quick solutions for big technology companies. However, going through the same list of affiliate marketing's natural qualities as he can check them out one by one should be music to his marketer's ears.
More flexible channels
If there's one word to describe the appeal of affiliate marketing in the modern era, it's control. Marketers can dictate exactly who to work with and how to promote them. Let your partners support your clearly defined goals and pay only for results. Whether you're driving sales (CPA), leads (CPL), impressions (CPM), clicks (CPC), or a combination of outcomes, there's a commercial model to support your goals.
Do marketers realize how well affiliate marketing can meet current demands? Respondents to an Awin and Forrester survey were asked to name the unique strengths of the affiliate channel. It seems that many people had the following characteristics in mind:
- 28% said affiliate channels offer clear added value
- 27% cite simplicity of management as one of their key attributes
- 26% said it was a transparent channel with a clear link to sales.
- 25% are happy to have control over the specific outcomes they want
Looking at the complete list, the top 10 perceived strengths of affiliate marketing range from reliable revenue sources and transparent channels to being highly flexible and extremely easy to manage. The difference is only 4%. I see this as something that means different things to different businesses because affiliates can cater to individual needs.
The solid foundation of affiliate marketing is made even more appealing by a dizzying selection of partners that allow you to reach audiences everywhere. Awin and Forrester research substantiate this opinion, with 28% of marketers citing the availability of new and innovative partners as a strength of affiliate marketing compared to other channels.
The Awin platform alone has over 1 million affiliates, including content creators, influencers, price comparison sites, news partners, loyalty platforms, and more. These partners create channels that can be shaped to suit a marketer's requirements while maintaining a reliably healthy ROI of £14 per £1 invested.
Based on U.S. ad spend, roughly two-thirds of digital ad spend goes to major technology platforms. Marketers now need to consider how to invest their final funds in a way that truly aligns with their goals and requirements. For me, the affiliate channel has an incredibly exciting proposition.
Want to learn more about Awin's recent work with Forrester?
Get a free copy of Awin and Forrester's report to learn how senior marketers are leveraging affiliate channels to achieve their goals.
