A £12billion industry: What affiliate marketing looks like in 2017

Q&A: Robert Davinson, Content Analyst at Awin

For over 20 years the affiliate industry has quietly evolved and grown into an essential component of the modern marketer’s digital arsenal. Following the launch of The Awin Report, co-author and Content Analyst at Awin Robert Davinson shares his insight into the current state of affiliate marketing across the globe.

  1. In a nutshell, what does the current affiliate marketing landscape look like in 2017?

    In The Awin Report, we estimated the global value of the affiliate industry to now be around some £12bn, which I think tells its own story of success. Whilst there have been some inevitable bumps in the road this year with added scrutiny from regulators (more on that shortly), this is simply the natural route for any industry as it grows and attracts wider attention. As affiliate marketing attains a higher profile, so it draws in bigger and bigger names in the form of brands, publishers and tech partners who see the channel as one they can also utilise.

  2. In the report, you state that “affiliate marketing is fragmented”. What are the notable differences across the globe?

    That's right, I think that affiliate marketing is profoundly connected to the particular circumstances of the local markets from which it evolves. Unlike other more standardised forms of advertising (like search or display, for example) which impose their framework upon a local market, affiliate marketing tends to derive its characteristics from the local constituent elements.

    If we look, for example, at somewhere like Scandinavia where influencer affiliates have had real success we can see that this is quite clearly linked to a number of factors such as high smartphone penetration rates in the wider population (influencer affiliates tend to over-index for traffic on smartphones) and the relatively high levels of disposable income there.

    By contrast, when we looked at our network in the Benelux region and the types of affiliates that were most successful there, it was interesting to see how comparison sites had thrived in particular. However, bearing in mind the high quality product feeds available there, the choice of third-party tech partners enabling comparison widgets and white labels to be more easily implemented by publishers, and a general consumer habit for always comparing prices before committing to purchase, it becomes clearer as to why this might be the case.

  3. Recent developments in data privacy and ad regulation are presenting new challenges for marketers. How has this impacted affiliate marketing?

    The affiliate industry is beginning to see a lot more scrutiny from both brands and regulators around best practice, which has led to notable investigations and issuances from the likes of the CMA here in the UK and the FTC in the US, for example. However, the fact that the industry has self-regulated for the largest part of its existence has held it in good stead for such interrogations and ensured that it hasn't suffered the kind of high profile criticism that the likes of Google or Facebook have over the last twelve months.

  4. Would you say the ‘rise of influencers’ has helped to uncover and demonstrate the power of affiliate marketing?

    This may sound a little confusing, but I’d say that that statement is as true as it is false.

    It's true because I think that the light the influencer trend has shone upon the previously unacknowledged upper-funnel value affiliates have driven for free for years is now beginning to get its due recognition and changing the nature of expectations between brands and their affiliates.

    At the same time, that spotlight has also emphasised one of the fundamental weaknesses of the model, the last-click attribution system we tend to use as an industry, which ignores that value. Influencers entering the channel have generally found it difficult to generate a viable income from their efforts and the industry must adapt its remunerative offering if it is not to drive them away for good.

  5. How do you foresee the channel evolving in 2018?

    The biggest spectre on the affiliate industry’s horizon in 2018 will be the implementation of the EU’s GDPR on May 25th. I fully expect a flurry of industry activity and debate over the potential ramifications of this for affiliate sites over the next six months as the live date closes in. It remains to be seen how the EU will interpret regulatory infractions and respond to those businesses it sees as not complying with the new rules, but nobody will want to be made an example of to others.

    Although we do characterise the affiliate industry as one that is ‘fragmented’ in The Awin Report, we also acknowledge the affiliate channel is an increasingly global one, and I envisage that 2018 will see this continue to occur as markets learn more from each other’s successes.

Search The Drum Jobs

Explore the best jobs in Marketing and Media industries
View all open jobs