The State of Affiliate Marketing By Oliver Roup, CEO of VigLink

Affiliate marketing should be part of every online business’s suite of digital products, and for good reason. In fact, the affiliate marketing industry is estimated to grow to 6.8 billion dollars by 2020. VigLink conducted a survey of 500 publishers and 100 merchants that currently use an affiliate marketing program. The survey also explored the current industry sentiment, and expectations for the future. The results showcase the high performance of affiliate service, and how publishers and merchants plan to increase their usage and spending over the next few years.  Sounds lucrative, right?
It certainly can be, but affiliate marketing can also be intimidating. There’s a lot of misinformation out there, so let’s go back to the basics. In its simplest form, affiliate marketing takes the commercial links in your existing content and pays commissions to the participating publishers based upon customers completing a desired action (like a purchase from a merchant). It also happens to be a contending alternative for other forms of advertising such as display in the age of ad-blockers. As a matter of fact, the majority of publishers ranked affiliate marketing ahead of display advertising in revenue generation abilities.

There’s a common misconception that fashion and beauty sites are the only industries that can benefit from affiliate programs, but that’s just not the case. Any website can be monetized and any merchant can drive meaningful traffic to their site using an affiliate program. For example, home décor and remodeling sites offer plenty of opportunities to recommend interior design products and furniture, while travel sites can include booking links, flight information and hotel packages. The sky’s the limit in terms of what type of content performs well, and therefore publishers and merchants are both increasing their investment in affiliate programs going forward. According to the report, 86% of publishers expect their use of an affiliate marketing program to increase or stay the same in the future, and 91% of merchants plan to increase or keep their affiliate marketing budgets the same in the future.

There’s no reason why publishers and merchants can’t get started with affiliate programs right away. In fact, both should get in the habit of incorporating affiliate into their overall marketing strategy. For merchants, the cost of sale via affiliate channels is around 6% – a far lower-cost option than other marketing channels such as Google AdSense or display. It also tends to be much lower risk, as most merchants only pay for conversions. In the survey, an average of 67% of merchants said their affiliate marketing programs help influence their marketing strategies.

Overall, the survey disclosed some skepticism from both publishers and merchants, but also spoke to the clear benefits of using affiliate marketing that drive continued publisher engagement and merchant budget allocation.

While all the results point to a bright future for the affiliate marketing industry, sentiment towards current programs are still slightly mixed. This presents an opportunity for the industry to hone in on areas that could use improvement, such as ease of use, network quality and even simple things like managing expectations.

With the shifting online media and content landscape, including the proliferation of ad blockers and alternative media consumption platforms, we expect to see an increased focus on user experience and transparency in the coming year.