UK consumers shelled out £16.5bn in 2014 due to affiliate marketing and lead generation campaigns, up 14 per cent on the previous year, according to a study.
Consequently, the growth rate is nearly twice that of advertiser spend on performance tactics, which rose 8 per cent between 2013 and 2014 to £1.1bn, according to the third annual Online Performance Marketing (OPM) Internet Advertising Bureau UK (IAB) study conducted by Pricewaterhouse Cooper (PwC). This equates to a return of £15 for every £1 invested by advertisers - 6 per cent higher than in 2013.
Most brands focused their spend on affiliate marketing, which had 88 per cent of the OPM pot last year compared to 12 per cent for lead generation. It benefited from the 125 million purchases consumers made in 2014 through affiliate websites, equating to £15.4bn.
Meanwhile, £1.1bn in sales came from the 30 million contact forms submitted. To that end, 10 per cent of e-commerce retail sales and around 1 per cent of GDP came from e-commerce retail sales.
Dan Bunyan, senior manager at PwC, said: “OPM has grown to a near-£17bn industry due to the fact that all parties continue to benefit. Advertisers get new customers extremely cost-effectively, consumers save money and get access to free online content, whilst the publisher in the middle gets revenue through referral fees.”
Finance, retail, alongside travel and leisure were responsible for three quarters of the total spend on performance marketing. Finance was the biggest spender with 34 per cent share of the OPM pie, followed by retail (21 per cent) and then travel and leisure (19 per cent).
Mobile and tablet devices had a noticeable impact on OPM, rising 72 per cent last year, the study found. The sharp upturn tipped the total share of OPM spend generated from these devices from 11 per cent to 17 per cent in the period.
Tim Elkington, chief strategy officer at the IAB, said the trend highlighted the potential e-commerce opportunities via mobile devices. “Advertisers are heavily increasing OPM spend on mobile because it’s playing a bigger role in shopping,” he continued. “Half of adult smartphone owners buy something with their mobile every month, a quarter do so weekly.”
The results spotlight peoples’ propensity to turn to sites like affiliates for bargains despite privacy concerns .
Indeed, a companion YouGov survey found that almost four in five (79 per cent) online Britons have visited a website employing one of the main OPM techniques in the last six months. Cashback sites are the most frequently used with around two thirds (67 per cent) of people who’ve used them to do so at least once a month.
Two in five people (21 per cent) are most likely to turn to holiday or travel sites online to save money or look for more information, followed by energy tariffs (16 per cent) and car insurance (15 per cent), the report revealed.
Elkington said: “Britons generate 10 million clicks every day in pursuit of getting a better deal or finding the right product – it’s an utterly ingrained part of today’s savvy consumerism. To put it in context, at £17bn it’s already as big as the beauty industry.
“The majority of people online say they’re aware how these sites make money, and whilst the privacy debate continues, the reality is that nearly half are willing to share personal information to get these things.”
UK advertisers saw £14 billion in sales generated from affiliate marketing and lead generation in 2013, having dedicated £1 billion in ad spend to those channels, according to the previous IAB/PwC report.