When a company sells a product or service online there are only a handful of marketing channels available to generate traffic that can be converted into sales and orders. The main channels are:
We surveyed 1,754 members of the public who used online social networks to determine the state of the industry with respect to affiliate marketing. This article, survey and results could be of use if you’re any of the following:
The following infographic will get you up to speed quickly with the majority of our findings, we will then discuss these in more detail.
Could this be that the term ‘Affiliate Marketing’ is meaningless to non experts? Perhaps more self explanatory phrases should be used, such as, ‘Earn money by telling your friends’ or ‘Webmasters make money’.
1. Dating 2. Finance 3. Retail 4. Gaming 5. Gambling 6. Freebies 7. Surveys 8. Discounts 9. Health 10. Travel
As a note to the entrepreneurs wanting to engage in an affiliate program I recommend you look past the headline figures provided by the programs. For example, a lead may be worth up to $10. Looks good, but ‘up to’ is the first warning. Then the terms may state, gender, age, sexuality and location restrictions. They may pay for an opted-in lead but have deliberately low email delivery rates so only committed leads ever reach the payment threshold. Programs want affiliate’s business and may work very hard to fiddle the results. Only after running a program can you get a true representation of earnings.
1. Gambling 78% 2. Health 67% 3. Surveys 63% 4. Retail 55% 5. Freebies 55% 6. Discounts 50% 7. Gaming 40% 8. Finance 38% 9. Dating 33% 10. Travel 25%
Dating, Travel and Finance are industries that have reputation issues.
1. ★★★★★ Discounts 2. ★★★☆☆ Retail 3. ★★★☆☆ Freebies 4. ★★★☆☆ Health 5. ★★★☆☆ Gaming 6. ★★★☆☆ Travel 7. ★★☆☆☆ Gambling 8. ★☆☆☆☆ Finance 9. ★☆☆☆☆ Surveys 10. ★☆☆☆☆ Dating
Overall, reporting for most niches is average to poor. Affiliates need to have a clear understanding of their earnings so they can be sure of a return on their marketing spend. For example, an affiliate using paid advertising needs to convert earnings into profit per click or per impression quickly by each channel they are utilising. There’s potential for deliberately poor reporting to keep an affiliate engaged when a program may not actually be working for them.
1. ★★★★★ Dating 2. ★★★★☆ Gambling 3. ★★★★☆ Freebies 4. ★★★★☆ Health 5. ★★★★☆ Gaming 6. ★★★☆☆ Finance 7. ★★★☆☆ Discounts 8. ★★★☆☆ Retail 9. ★★☆☆☆ Surveys 10. ★★☆☆☆ Travel
Overall the media provided is sufficient for most niches but there is room for improvement for surveys, discounts and travel sectors.
1. Discounts 89% 2. Retail 64% 3. Finance 64% 4. Gaming 60% 5. Dating 59% 6. Health 50% 7. Gambling 38% 8. Freebies 36% 9. Surveys 25% 10. Travel 12%
1. Dating 87% 2. Gaming 86% 3. Gambling 83% 4. Freebies 78% 5. Finance 75% 6. Surveys 72% 7. Travel 68% 8. Retail 67% 9. Discounts 50% 10. Health 50%
It’s very clear that affiliates prefer to work directly with the company and not via a broker. This could be that having a ‘middle man’ lowers the commission payments. An affiliate broker may take between 10% to 20% of any commission generated. Affiliates may start out with a broker, test lots of offers and then approach the company directly. However, some brokers may insist on a company being exclusive.
1. Dating - Social Media 2. Discounts - Paid Advertising 3. Finance - Paid Advertising 4. Freebies - Social Media 5. Gambling - Social Media 6. Gaming - Paid Advertising 7. Health - Social Media 8. Retail - Social Media 9. Surveys - Paid Advertising 10. Travel - Social Media
In most sectors the split between social media and paid advertising was very close. A combined insight gives more information to other methods. Looking at the marking mix overall, affiliates prefer the following channels:
1. Social Media 43% 2. Paid Advertising 32% 3. Organic Search 18% 4. PR and News 7%
Social media is the predominant marketing method deployed by affiliates. This is likely due to it’s low cost of entry. Paid advertising is also very popular but can require a considerable investment to test a range of sources to generate a return.
Affiliate network operators
Ensure you build trust with your affiliates and try to do this with clear and powerful reporting tools. With only 11% of the public using affiliate programs there is signifiant potential for growth.
The vast majority of existing affiliates do not wish to work with a broker, so it’s essential to offer something better than the direct alternative. Providing a more trust worthy platform with enhanced reporting tools could be the edge that you need.
If you have a website or existing business then try to find the most profitable match so you don’t have to build up your affiliate earnings from zero. Think about vendor trust and try a few providers to find their true earnings potential.
You may be able to increase your earnings with a switch in niches without adjusting your business model considerably. For example, discounts to retail or gambling to dating. If you’re in a niche that has a low trust reputation then take a closer look at your current providers and focus on the more reputable.