If you’re reading this, you probably have at least a working idea of how affiliate marketing works. You, the merchant, have this groundbreaking new tech widget that is ready to hit the market. And I, the publisher, have an established and well-trafficked tech blog where I test and review all the latest gadgets out there. Seems like we should get together, no?
And so we do. We get connected through an experienced affiliate program manager, I get that widget to test and review (with all of your facts and messaging), and I naturally feature a link to your website so readers can buy it. Our manager does all the legwork, and I publish the post. Your sales and web traffic climb, and I get paid every time that link gets a click. Seems like a win/win situation, and, typically, it is. Question is, who is happier with this arrangement: you, the merchant, or me, the publisher? Let’s take a look at some numbers and find out.
A survey recently published by VigLink asked 500 publishers and 100 merchants about their feelings on these relationships and their personal goals, which gives us the chance to get some answers. Let’s start with revenue. For the publishers, affiliate marketing has finally replaced display ads as revenue generators. This is big news, especially considering the higher conversion rates affiliate marketing brings. Additionally, over three-quarters of publishers, big and small, say that revenue from affiliate marketing stayed the same or increased from 2015 to 2016. These are good signs that well-established larger publishers will continue the good work, and smaller or newer bloggers will stick with the process with confidence. Publishers are feeling good about what they’re doing.
On the flip side, merchants are quite pleased with their affiliate marketing results from that same time period. An amazing 73% reported that the revenue generated from their affiliate marketing met or exceeded their expectations. Not their bottom line…their expectations, which can be quite lofty. Over three-quarters of merchants also showed confidence that their current affiliate marketing programs are increasing sales and web traffic simultaneously. Apparently, merchants are feeling quite happy with their results, as well.
So far, it seems like a pretty even race. Keep in mind, this is a good thing. Mutually beneficial situations like this makes affiliate marketing an especially appealing option. Knowing that, we should examine the future; plans to continue to invest time and money in these type of campaigns for both publishers and merchants will determine how this industry grows. So what does everyone see in the cards for the future?
Again, the prospects seem very bright. 86% of publishers expect their revenue to stay the same or increase in the next year. That would imply that these publishers will not only continue to use affiliate marketing to monetize their sites, but will reinvest some of that capital into technical and logistical improvements to make their sites more affiliate-friendly for merchants and readers alike. Investment in this infrastructure tends to spur growth and opportunity, especially in what is, in reality, still a fairly new industry. Consider this: only half of publishers with more than 100,000 unique monthly visitors have been taking advantage of affiliate marketing for five years or more, while 65% of smaller-scale publishers (less than 5,000 unique monthly visitors) have only been using it for two years or less. As with any industry, time and experience breed innovation and efficiency, especially with the help of a savvy affiliate marketing manager in your corner. With money staying steady and lots of room to grow, the publisher’s future looks bright indeed.
As in all marketing, the merchant takes its cues from the market. Accordingly, the merchants surveyed report similar optimism. Staying in step with the publishers, an amazing 91% of merchants plan to keep or increase their affiliate marketing budget in the future. This is big news, providing confidence and security for current publishers and hope and incentive for up-and-coming ones. Over half of the merchants also report 5%-20% of their total sales coming from content-driven affiliate sales; a number that, in this age of ad blockers and general indifference to banner ads, is significant and expected to increase. Keeping in mind that many of these merchants are as new at this as the publishers above, it stands to reason that marketing departments will continue to invest in and nurture publishers as performances and revenues increase. It’s just good business.
Are there problems and uncertainties that both publishers and merchants face in this rapidly growing field? Of course, and we’d be remiss if we didn’t discuss them. Some publishers report that there aren’t enough interesting or relevant products available to engage their readers, and this can be problematic for bloggers who rely on authenticity for their audience. However, as mentioned above, this exponentially growing field should naturally expand to include all sorts of diverse and niche-relevant products…so, if there’s nothing to write about right now, it’s a safe bet that there will be soon. The merchant’s main concern was the relative quality of the networks representing them. Bad writers, unreliable technical hiccups, or pushy sales techniques can all unfairly represent a brand. Thankfully, as the field evolves, there are many solutions appearing to aid the merchant in vetting networks, analyzing data and conversion rates, and quickly shutting down shady or unreliable sites.
So, after all these facts, who is more likely to be pleased with their affiliate marketing situation? Well, a case could be made for both, especially considering who’s reading this. We’ll give the slight edge to the merchant, who has increased sales, web traffic, and an almost guaranteed ROI on their investment. There will undoubtedly be more to discuss in the future as the industry grows and evolves. What are your thoughts on this survey and our conclusions? Team Merchant or Team Publisher? Let us know!