Would you rather your ads resonate with 71% of your audience or 38%?
If you’re only running ads on the Google Display Network, social media sites and search engines, we’ll assume you’re going for the latter. The good news is that it’s not hard to achieve that 71% rate instead. In 2021, Nielsen found that consumers overwhelmingly trust advertising and product placements in influencer content. The difference between influencer ads and traditional online ads is big enough to make or break a business. There’s a reason affiliate marketing is the future of ecommerce.
Affiliate marketing has been a critical strategy in ecommerce for nearly a decade. In fact, Influencer Marketing Hub projects that affiliate marketing spend will reach $15.7 billion globally by 2024. That’s up from $8.6 billion in 2017. It’s an impressive projection — but not surprising.
Mastering affiliate marketing bolsters brands, merchants and affiliate marketers themselves into new tiers of success. However, the landscape is always evolving as brands try new strategies to compete in a crowded market. To succeed at affiliate marketing in 2024 and beyond, you’ll need to get smart about your spending, focus on building affiliate relationships and constantly diversify your partnerships. Here’s how these trends are playing out across the industry right now and where they’re headed in the future.
In affiliate marketing programs, someone (an affiliate) promotes a company’s product or service. The affiliate receives a commission if their efforts result in a consumer taking a particular action. Usually, this action is buying the promoted product or service, but some affiliates earn money when consumers follow a link to a product page or sign up for a free trial.
Budget management is on everyone’s mind in the current economy, and affiliate marketing today costs more than it used to. Affiliate marketing is turning into a must-have for ecommerce businesses, which means related services have rapidly become more expensive. Marketing directors who want to stay competitive in the affiliate arena need to be smart about where they invest.
Your affiliate marketing budget will give you much-needed visibility even when economic pressures decrease your advertising reach and volume. Google cost-per-click ad prices started rising in mid-2022, right as social media sites increased prices because consumer privacy protections made ad targeting harder. And legacy ad companies like Facebook (Meta) and Google may inch prices higher as newcomers like TikTok cut into their market share. Increased ad costs mean a lower profit margin for both you and your affiliates.
However, you can use your affiliate program to increase your advertising efficiency. First off, a Forrester survey of marketing execs who oversee these campaigns proves they’re worth the investment. Over 50% of respondents said affiliate marketing was a top-three driver of both customer acquisition and revenue. With such a good ROI, it’s no wonder businesses are increasing their influencer marketing spend every year.
Affiliates give you insights into audience behaviors among your niche. In tracking their successes, you’ll see which market segments are the most monetizable. Your affiliates can also help you test various ad platforms and types among different demographics. Use this data to improve your ROI on all your marketing campaigns, and that tight budget won’t seem so restrictive anymore.
The Federal Trade Commission, Food and Drug Administration and other government organizations have been cracking down on claims made in affiliate marketing campaigns, and you should expect this trend to continue into 2024 and beyond.
“Affiliates should take note that the FTC will hold you personally and financially accountable for false or unsubstantiated marketing claims,” said the FTC’s Bureau of Consumer Protection after ordering a group of affiliate marketers to pay more than $4 million to settle charges that they promoted a fraudulent business. And it is not just the government organizations that are cracking down. Big companies such as Google and Amazon, plus third-party payment processors, are keeping a closer eye on offers made from affiliates.
Stricter regulations around affiliate marketing could result in lower earnings-per-click for affiliates and reduced conversion ratios. There will be pressure to increase cost-per-acquisition payouts to ultimately increase earnings-per-click. As stated above, expect these changes to shrink profit margins for both merchants and affiliates. Moreover, brands and merchants (especially in high-risk categories) will need to continue to be diligent about following the latest advertising and payment regulations in their niche to avoid hefty fines.
2024 will be a breakout year for machine learning technologies. The trick to getting ahead is using these new tools in the right way.
Machine learning is great for automating busy work and repetitive tasks. Set it to analyze your marketing data, and you may uncover unexpected trends and patterns. You can trust these insights to guide you as you plan your affiliate and influencer marketing program for the next quarter.
You shouldn’t use these new tools to replace the human touch in marketing. At Affiliate Summit East 2023, Affilimate co-founder and COO Lynda Mann led a panel on the role of ChatGPT in marketing. The panel’s participants warned that pushing machine-generated content could harm your brand’s integrity. Affiliate marketers already know how to craft messaging that connects with audiences while maintaining your brand’s voice — so let them use that expertise for your benefit.
There’s no affiliate marketing without affiliates — so companies need to cultivate those relationships and support their marketing partners. Even with budgets stretched thin, you’ll need to keep this line item. Target your support to current affiliate trends to get the most out of each dollar you spend.
In 2024 and beyond, look for affiliates to become advertisers instead of simply driving traffic to your landing pages or sales funnels. Affiliates looking to make this transition will need the tools to:
Providing software to your affiliates isn’t just a relationship-building move. It can also help you collect data on each person’s sales so you can see the ROI of each partnership.
Relationship management is a lot easier when you can handle it all from one app or program. Affiliate marketing has gotten big enough that companies have access to platforms and agencies to help coordinate their marketing efforts. Partnering with agencies or networks that offer competitive rates will give you a new way to access affiliates.
Affiliates you find through third parties still deserve the respect of a direct relationship with your brand. Platforms like Everflow make it easy to communicate one-on-one with your affiliates and build those relationships. Plus, you can use the tool to share marketing assets, set up offers and organize affiliate payments.
Affiliate advertisers will want to know about their performance in the same way your marketing team tracks campaign ROI. To save time and stress, choose an ecommerce platform that can give select affiliates insight into their sales reports without disclosing metrics from other affiliates or business initiatives. This way, affiliates can view their own sales data while merchants focus on high-level marketing strategies.
The more selective the data you can share, the better for you and your partners. Everflow helps merchants create in-depth reports that break out data by things like partner type or ad placement. Share the trends you spot with your partners if you don’t share the reports themselves so they can build on your success.
Companies that rely on affiliates for marketing have to be prepared for the possibility that those people will make choices that reflect poorly on the brand. Most marketers can think of at least one high-profile influencer gaffe that sent a big brand into damage-control mode. Make sure you’re not relying on one or two big affiliates lest they misstep in a way that harms your sales.
Mobilizing an army of smaller affiliates who have closer ties to their audience can pay off for brands. On the risk management side, it gives you a big safety net in case you have to cut ties with an influencer who doesn’t reflect your brand values.
From a business perspective, small and micro-influencers may be a better deal. They tend to charge less per post but have higher engagement rates than large influencers. People who have brought together relatively small communities typically try to convince audience members they feel a personal relationship or bond with them. This leads to an increase in trust, which is a boon for sales.
Partnering with other companies that serve the same audience gives you both a unique chance to monetize. Typically, these relationships have both companies cross-promote each others’ products. It’s an opportunity to reach an audience that already trusts the messenger — much like influencer partnerships.
Brand-to-brand partnerships also give your ads unique placement. You may nab mentions in email newsletters, launch a social media contest that drives interaction to both brands or even launch a co-branded product. As long as both companies have similar audiences, these partnerships can bear a lot of fruit. We surveyed subscription consumers and learned that 50% consider buying a product when they receive a cross-promotional email from a brand partner.
As affiliate marketing continues to grow, you’ll need more data and stronger relationships to stay competitive. Trends suggest it’s time to invest in affiliate management platforms or ecommerce tools that are affiliate-ready.
sticky.io’s platform helps generate revenue for affiliate marketers, digital advertisers and brands. Whether you’re an advertiser or looking to become one, leverage sticky.io’s recurring billing platform that makes it easy to quickly launch offers, manage affiliate permissions, maximize revenue and scale an ecommerce business with personalized affiliate data.