THE AFFILIATE MARKETING REPORT: How mainstream publishers are turning performance-based marketing into a 'fine art'

BI Intelligence

Many people associate affiliate marketing with the selling of diet pills, teeth whiteners, and other controversial products. Although this darker side to performance-based marketing still exists, affiliate programs have moved to the mainstream, with major retailers and publishers now using them to drive sales of all sorts of products, from electronics to apparel.

In a new report from BI Intelligence, we examine the changing face of affiliate marketing and take a close look at the key players. We also outline growth opportunities for affiliate marketing and how we see this industry developing.

Here are some of the key takeaways:

• Mainstream media publishers are helping legitimize affiliate marketing. In an effort to balance editorial integrity and revenue needs, publishers are taking a more native approach to affiliate marketing by embedding product links within organic content.
• Overall, publishers still generate the bulk of their revenue from advertising, but affiliate marketing is growing faster, per our sources. Approximately 15% of the digital media industry's revenue now comes from affiliate marketing.

The investment that media companies are putting behind e-commerce drivers is good news for retailers, because publishers play an important role in the purchase funnel.

• Affiliate marketing now drives as many e-commerce orders in the US as email. Both channels currently account for 16% of US e-commerce orders, according to marketing firm Custora. This makes affiliate marketing one of the four largest sources of e-commerce orders, outperforming social commerce and display advertising.
• Even consumers who already have demonstrated purchase intent commonly visit multiple nonretail websites before completing a purchase on an e-commerce website or in a store. Nearly three-quarters (74%) of US shoppers say they visit two to three nonretail websites before completing a purchase, and 16% say they visit more than four websites, according to Rakuten and Forrester data.

In full, the report:

• Defines modern-day affiliate marketing.
• Maps out the entire affiliate marketing ecosystem.
• Lists the types of metrics a retailer rewards affiliates for.
• Examines the impact of affiliate marketing on e-commerce growth.
• Projects growth opportunities in performance-based marketing.

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