Affiliate Channel Growth: in trying times
We’ve heard it in recent weeks: we are living in unprecedented times. And, with Amazon slashing commissions to its affiliate partners (what they call “associates”) and some big-box stores reducing and/or eliminating commissions altogether, it’s easy to believe that affiliate marketing is dead. PMA members, however, are seeing growth in their affiliate programs like never before.
Affiliates are looking to diversify
Affiliates are looking to diversify their revenue and fill necessary gaps while driving their customers to brands who take an active role in helping them protect their businesses and livelihood.
“The time refocusing is causing me to take a closer look at what content I have, which advertisers are working and then dig into why they are working and which advertisers might fit other content I’m working on,” Jen Goode, content creator at 100Directions.com.
As affiliates like Jen are getting their commissions cut or being removed from programs like Amazon and other large brick-and-mortar retailers, they stand ready to be swept up by brands taking an active approach to managing their affiliate programs.
Anne Burchmore Mies from iAffiliateManagement, whose clients include home & garden, food & beverage, and health & beauty retailers, “[We] have seen an uptick from premier content partners wanting to promote our clients taking advantage of the higher traffic they are seeing.”
And she’s not alone. Greg Hoffman, CEO and Founder of Apogee Agency, is seeing clients with significant increases. “Our food and drink programs saw significant increases in orders since the beginning of March. For clients such as Snake River Farms, year over year growth in orders is near 500%. The number of affiliates active with clicks and sales has increased up to 80% and we’ve seen 300% more affiliate applications compared to a normal time period.”
“One big trend we are seeing in the affiliate space right now is traditional and online media partners who wouldn’t have even thought about working on a performance model 2 years ago are now flocking to the affiliate channel as they see other advertising revenues dry up. Display and traditional ad budgets are shrinking and in order to make up that lost revenue these media publishers are looking for new ways to monetize their traffic including through the affiliate channel,” Joe Sousa, Fanatics.
Jamie Birch, Chief Incremental Officer of JEBCommerce, whose clients include retailers with and without physical locations, “Currently, we are seeing about a 56% increase in new affiliate applications with a much higher quality. Because of this and shifting consumer behavior, our clients are seeing upwards of 300% and sometimes with individual partners increases of up to 4000%.”
Data Supports Affiliate Channel Growth
And while it’s tempting to be caught up in the warm fuzzies and positive sentiment, it’s always important to look at the numbers.
With over 1,000 advertisers using the platform, Maura Smith, CMO at Pepperjam, offers this insight:
“Marketers need a tried and true channel they can rely on, especially in a time of relative uncertainty, and affiliate marketing delivers against that need. In fact, Pepperjam’s Affiliate Marketing Sales Index provides an interesting view into why more marketers are leaning into affiliate marketing — it boils down to its ability to drive results when they’re needed most. Specifically, Pepperjam observed greater than 70% revenue growth YoY, the last 4 weeks, peaking at 79% for the week ending 5/9. Additionally, the channel drove significant new customer rates, over 50% for the last five weeks.”
All indicators point to the need of affiliate now more than ever before. Brands should diversify their revenue streams and the affiliate channel’s pay for performance (and not for access) model allows advertisers to mitigate advertising risk.