E-commerce trends, a burgeoning creator economy, and marketing technology are energizing affiliate promotion, enhancing the effectiveness of an already powerful digital marketing channel.
Affiliate marketing is not new. It’s been around since the early days of the commercial internet, as has search engine optimization, digital advertising, and email marketing.
However, this does not mean that affiliate marketing remains the same. It has changed and is changing dramatically.
In the United States alone, affiliate marketing spending has grown by 10% annually for nearly a decade. According to Statista, affiliate marketing will reach $8.2 billion in 2022, a 20% increase over 2020.
There are many factors driving this growth.
The term “social commerce” is ambiguous in 2021.
For our purposes, social commerce is a subset of e-commerce. It involves sharing and promoting products on different platforms. This post uses text, images, and video, including live streams.
Sometimes the connection is between a company and a shopper, the QVC or Amazon method. But more often than not, it is an influencer who recommends a product in a post, recording, or live video.
Chinese e-commerce companies lead the world in social commerce. Integrating sales, content and online sharing is now the norm in China. This trend is spreading globally.
“WeChat alone drove $250 billion in e-commerce in 2020. It’s huge. And for social commerce, a lot of people expect the market to grow at a 38% compound annual rate for a decade… which means it’s a channel that we need to embrace,” Joris said. Croese, CEO of Hatch, a provider of omnichannel commerce tools.
Social commerce often relies on paid affiliate influencers. Thus, as social commerce grows, so does affiliate marketing. On the contrary, e-commerce companies interested in social commerce should start with affiliates.
Affiliate marketing used to have a bad reputation. More than a few affiliates have stuffed keywords into ugly and unwanted landing pages.
These pages may misrepresent a product or promote a disreputable item. Monitoring these affiliates has been a burden on affiliate marketing managers. To consumers, buying from them may seem like a backdoor drug deal.
Unscrupulous affiliates are similar in concept to the black hat and gray hat search engine optimization practitioners who seemed to be everywhere a decade ago. I’ve written several articles disparaging SEO tactics at the time. Many have sought to deceive both search engines and humans.
Search engine optimization has always been important. But a lot of early practitioners focused on Google games instead of producing quality content. That has changed. SEO now benefits both the website and the searcher.
Affiliate marketing has also changed.
Many of today’s affiliates are creators – artists, musicians, coaches, chefs, critics. They produce original content. They build lasting relationships with an audience of fans. They only promote products they believe in.
If a fitness trainer with 50,000 subscribers says she “likes” a particular type of plant-based protein powder, you can bet she likes the product.
Her audience is too important for her to take the risk. You will not promote a product that you do not use. Thus, the upgrade, while paying, is real.
The creative economy is growing rapidly. Many up-and-coming content creators are looking for affiliate relationships.
Don’t be surprised if affiliate marketing takes off in the next few years, commensurate with the growth in the creator economy.
Marketing software — sometimes called a marketing technique or martech — improves affiliate marketing.
In the past, e-commerce affiliate sales were one and done. The affiliate link resulted in 1 purchase. But modern affiliates, especially creators, want deep relationships with fans. Martech makes this possible.
There are three parties to a referral transaction: the seller, the affiliate partner, and the buyer.
Martech Tools now allows the affiliate to send post-purchase messages to the buyer via the seller. These messages can help the affiliate re-engage the buyer, deepen the bond between the seller and the affiliate partner, and lead to resale to the buyer.
Martech Tools also provides better feedback. The affiliate only knew once when a sale was made and nothing else. Now, the affiliate dashboard can show the customer lifetime value, related purchases, and more. This business intelligence makes the affiliate more efficient and, in turn, generates more sales for sellers.