The importance of having an established e-commerce strategy is growing every day. Businesses are increasingly taking to the space to both spread awareness and drive revenue for their brand. Along with the growth of e-commerce, affiliate marketing has proven to be a pivotal and increasingly critical channel for brands to leverage – especially in volatile economies. According to a 2021 report from Performance Marketing Association (PMA), affiliate marketing investment reached $9.1 Billion in 2021 – a 47% increase over their 2018 report.
Affiliate marketing has been adopted as a way for businesses of all sizes to reach a larger target audience at minimal cost, with the average ROAS being 12:1 (per information from seven leading affiliate networks and platforms: Awin, CJ, LinkConnector, Partnerize, Ascend by Partnerize, Rakuten Advertising, and ShareASale).
What is affiliate marketing?
Affiliate marketing is a performance-based channel in which companies pay a commission to third-party publishers based on a specified type of metric or conversion (i.e., when they help generate sales, leads, clicks, etc. – you get the picture). Traditionally, this has been a transaction or purchase, but has expanded to upper funnel metrics as the industry evolves. Affiliate marketing is especially cost-effective since brands only pay for publisher’s commission when the conversion takes place.
Who’s involved in affiliate marketing?
There are two main parties essential to affiliate marketing – the advertiser, sometimes referred to as the brand, and the publisher, sometimes referred to as the partner.
- The advertiser is a company with an e-commerce business who wants to promote their brand and/or product to reach an audience beyond their usual, to increase traffic and orders, and to engage existing customers.
- The publisher can range from a content site, social platform, shopping platform, blog, website, or browser add-on that drives shoppers to a brand’s site. Publishers then earn a commission through their websites and social channels, tracked through a unique link.
What’s lies ahead for affiliate marketing?
Today, brands are incorporating affiliate marketing in new and unique ways to not only acquire new customers, but also increase customer loyalty. According to a study by Forrester Consulting and commissioned by Rakuten Advertising, 81% of advertisers and 84% of publishers have reported leveraging an affiliate program. That number is increasing year-over-year (YoY). According to Statista, the affiliate marketing industry will be worth $8.2 Billion in 2022 – a 10% increase when compared to 2021.
Benefits of an affiliate marketing strategy
- Reach a larger audience – Affiliate marketing helps raise brand awareness with little-to-no-risk.
- Optimize a higher ROI – Affiliates only get paid when a sales or conversion is made.
- Revolutionize the marketing world – Affiliate marketing is quickly being adopted into every business’s marketing strategy. This is becoming a key channel for all brands to tap into- don’t miss out. Affiliate marketing channel growth is undeniable. Brands are quickly turning to the channel to increase brand awareness and drive results. It’s not too late for your brand to start too.
Start growing your affiliate channel with Rakuten
- Work with Rakuten to help shape your strategy, starting with the basics. Define your audience, objectives, goals, and budget
- Make Cash Back an integral part of your marketing mix. Cash Back impacts shopper behavior from acquisition to conversion, building loyalty and long-term customer value.
- Build strategies that create Get a complete picture of your customer wants and needs to deliver on value.
- Cultivate loyalty with personalization. First-party customer data is critical in building personalization strategies that create a clean feedback loop between data and behaviors. Richer engagement holds more value for the customer and more opportunity for brands.
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