The Future Of Affiliate Marketing

by Kevin Edwards, Strategy Director Awin

Affiliate marketing continues to grow apace largely as a result of its ability to continually reinvent itself following both consumer demand and Internet trends. The affiliate evolution from content to paid search leading to cashback, reward and latterly voucher codes could see the industry generate sales in excess of £5bn this year.

This progression inevitably leads to affiliate marketers trying to second guess what the industry’s new growth areas will be.

Top of anyone’s list will probably be mobile. Given more people currently access social networks via mobile devices than desktops the prevalence of web access via mobile devices is sharpening affiliate minds on monetisation opportunities.

Some are already filtering through, largely in the realm of voucher codes, expanding their remit to mobile and in doing so offering tantalising insights into the power of geo targeted ads, activated based on a consumer’s proximity to a store or restaurant. The fact these codes can then be tracked offline and ROI delivered based on an initial redemption cost taps perfectly into the performance based credentials of the affiliate channel.

The explosion of application based technology and the relatively low barrier to entry coupled with a greater understanding of how to track end to end could see additional non-voucher opportunities open up.

Expect to see a variety of existing and new affiliates enter the fray in the race to secure additional commission.

Beyond mobile the growth of behavioural retargeting has gained significant coverage with the success of companies like Criteo. Evolving CPM marketing based on browser behaviour has offered some of the advertisers using it excellent returns to date and affiliate networks could be the next port of call for similar companies looking to gain a foothold in the market. Given networks are a ‘one stop shop’ for third parties looking to access hundreds of advertisers it makes sense to see if deals can be done at a network level but there are considerations for all parties.

Affiliate marketing has always delivered on a CPA therefore the branding element of CPM is diminished and any move away from CPA questions the affiliate nature of the promotion.

The activity also assumes CPM can be delivered to a CPA that costs in for affiliates engaged in it. If it doesn’t will the advertiser be expected to hike their commissions? There is also the post impression cookie issue that this activity requires yet traditionally most affiliate networks have never offered, given affiliate marketing is premised on delivering sales and the harder action of click cookies.

There are additional considerations that networks, as arbiters will be required to make a call on. For example, should post impression and post view be ushered in, why should it only be in place for certain affiliates using banners and what should the cookie overwriting policy be?

These are discussions still to be fleshed out, underlining how the affiliate industry is multi-faceted and what may be required for one affiliate could run counter to the needs or opinions of another.

Finally, we should look at the opportunity offered by open source and technology applications.

Tesco recently announced plans to open up access to their site for developers and offer commissions for those developers who create value-add applications that could in turn potentially be pushed out to affiliates. Beyond this technology companies looking to gain access to a large base of publishers and affiliates may integrate their tools with a network’s to offer revenue share opportunities; networks potentially offering an ‘application store’ approach.

Wherever the next big development emerges, what is clear is affiliate marketing’s ability to react to new technologies as well as spot consumer trends will ensure it remains at the cutting edge of digital marketing.