By Nicola Wellington, UK Marketing Director

Brand marketers continue to navigate a complex landscape, balancing ambitious 2023 Marketing goals with unprecedented and challenging economic conditions. With consumer confidence at its lowest and inflation at its highest, the Affiliate channel has retained its status as a solid pillar of transparency in the face of marketing adversity.

A UK industry-wide survey conducted by leading networks and platforms: Awin, CJ, Impact, Attraction, Tradedoubler, Acceleration Partners, Optimize and Rakuten assessed responses from over 100 of the leading advertisers and agencies to reveal how use and value the affiliate channel. as we enter 2023.

one. ROI, ROI, ROI

It may come as little or no surprise that ROI is the most valued aspect of affiliate marketing activity by brands and agencies, closely followed by sales volume and profitability. While challenging macro factors continue to plague businesses of all sizes, the affiliate channel has historically been credited for its strength amid economic pressures. Based on a cost-per-acquisition model, it allows brands to test new digital tactics in creative ways thanks to the wide variety of partners and the unparalleled control that the model offers. For nearly two-thirds of those surveyed, affiliate revenue represents more than 10% of total advertiser revenue. With an increasing variety of publishers and technology partners available for advertisers to work with, affiliate continues to be a safe haven for ad spend due to its anchoring to clear ROI.

2. Affiliate ad spend will grow in 2023

When asked if advertisers and agencies plan to spend more of their ad spend on affiliates by 2023, nearly half (46%) said they would. In fact, this is fifteen times more than those who plan to reduce spending. Another 39% said they would invest at around the same level. No agency surveyed planned to reduce spending. When asked how much they currently invest in the channel, almost a third said they spend at least £600k per year, with 7% investing more than £10m. Digging deeper into the data revealed that larger affiliate programs had a higher propensity to increase budget, possibly due to program maturity, strategic focus, and a strong belief in the channel as a safe investment versus other avenues. marketing.

3. CPA transparency provides marketing confidence

The survey results revealed that most advertisers still overwhelmingly operate on a pay-for-performance basis. 95% of clients use the traditional CPA payment model, followed by leases and bonuses at 56%. As down economic conditions commonly increase scrutiny over spending, the transparency and insights generated from the affiliate channel will allow brands to implement and refine strategy without impacting margins or profitability, due to flexible commission models. and clear attribution data.

Four. Marketers are embracing partner diversity

Nearly half of those surveyed (47%) felt there were more partnership opportunities in the channel today compared to a year ago. There is a growing appetite for affiliate partners who can achieve more than just generate profitable sales volume, brands have identified more upper-funnel awareness builders like publishers and influencers as key targets in 2023. Additionally, the rise of affiliate partnerships affiliated brands and technology solutions providers is paving the way for advertisers to implement a broader digital strategy and reduce reliance on one or two core partner types or traditional down-channel customer engagement.

5. Support in times of crisis

The prevailing sentiment throughout the survey data was one of positivity around the channel and its ability to support business needs in the current crisis. More than two-thirds of those surveyed said that affiliate and partner marketing will be more important to them in 2023 to achieve their marketing goals. The affiliate industry witnessed tremendous growth and development in the aftermath of the 2008 recession as online purchasing behaviors evolved. With declining consumer confidence and an ongoing cost of living crisis causing economic chaos in 2023, we are likely to see similar growth in the industry in the coming months.

While uncertainty will undoubtedly continue throughout 2023, advertisers and agencies can take advantage of partner marketing channel choice, creativity, and control to insulate themselves from this chaos. By leveraging new emerging partner types and low-risk payment models to drive incremental revenue and ROI, advertisers can continue to succeed and grow.