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Affiliate marketing report

DISCLOSURE:
Pure Payout operates an affiliate network within the online dating sector however this has not biased the results, they are ‘as is’. We operate in this sector as we know it’s highly profitable but has some reputation issues.

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:

  • Organic search
  • Paid search advertising
  • Other paid advertising (print, online etc)
  • Word of mouth
  • Affiliate marketing

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:

  • An entrepreneur wanting to monetise a website
  • An existing affiliate
  • A company with an affiliate program
  • A company looking to start an affiliate program

The following infographic will get you up to speed quickly with the majority of our findings, we will then discuss these in more detail.

Affiliate Marketing Report

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Have consumers heard of affiliate marketing and affiliate programs?

The short answer is no. The majority of the general public did not know what it is. This shows there’s huge potential to grow the affiliate industry.

  • 60% had not heard of it
  • 29% knew about it but don’t use it
  • 11% were active users of affiliate programs

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’.


Which sector makes the most money for affiliates?

We asked users of affiliate programs to share which sector made them the most money. I have personally been a super affiliate for many years over a range of sectors. Some have been life changing, others are so poor that they’re a total waste of time. Here is the list that affiliates will love to read and companies may not.

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.


Which sector is most trusted by the affiliates?

We asked existing affiliates if they trusted the programs they were involved with. These results are per sector. They are ordered by percentage of users who think their programs are honest about sales and 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.


Which sectors have the best reporting tools?

We asked existing affiliates if they thought the reporting tools for their sector were good enough.

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.


Which sectors have the best media and banners?

We asked existing affiliates if they thought the media and banners for their sector were good enough.

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.


Which sectors have the best payout options?

Payout options can be a deal breaker for affiliates in developing regions. If a company’s affiliate network has a lot of users without bank accounts then good alternatives will be essential.

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%


Do affiliates prefer to work directly with the company or use a broker (network)?

Companies running affiliate programs may run them directly or via a broker or a combination of both. The broker’s advantage is affiliates can find multiple offers quickly, however the broker is taking a commission which either comes from the company or the affiliate or a combination. We asked existing affiliates which they preferred within their sector, the results are percentage who preferred to work direct (without a broker).

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.


Which marketing channel is best for which sector?

What are affiliates using to drive traffic to their affiliate banners and links? The results are split by sector and channel.

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.


Summary

Here are the take-home points depending on your role within the affiliate marketing business.

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.

Affiliate brokers
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.

New affiliates
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.

Existing affiliates
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.

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