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Feb 1 · 8 min read

Affiliate Marketing Trends in 2019

Commission Factory reflects on 2018 and shares with you our insights on trends to come in the  year ahead of us.

affiliate-marketing-2019

The After-Effects of Privacy Regulations

GDPR legislation and Apple's update of its Intelligence Tracking disrupted the way digital marketers use consumer data which sent shockwaves into how advertisers and affiliates alike promote. 2018 was the year for figuring out how to successfully adapt and overcome these barriers to promotion, and 2019 will be the year for refining these adaptations. We spoke with the Global Client Strategy Director at Awin, Kevin Edwards, to pick his brain on what will come from this in the new year:

“2019 will see networks having to invest in the basics to future-proof their affiliate campaigns. Apple’s latest Safari update showed what disruption can be caused by one company making a change in how and what they track and who is to say others won’t follow suit. That we have no control over these macro factors shows how vulnerable the digital ecosystem is to the vagaries of the tech giants. On the subject of situations beyond our control, there are increasing challenges to cross-border trade through taxes and trade wars that could be deleterious to the continued growth in overseas affiliate sales. Finally, affiliate marketing has to create a compelling story, offering reassurance to brands questioning how and where their digital dollars are being spent. With the increasing disillusionment with programmatic for a whole host of reasons including privacy, transparency, and fraud, the affiliate channel has the chance to shape an alternative, positive vision for ongoing investment.”

The Continued Rise of Cashback

Australian consumers have been slow to adopt cashback sites into their spending practices as many have perceived the model as "too good to be true". This perception within consumers has instilled some hesitations within Australian brands to incorporate cashback affiliates into their affiliate strategy.

Last year, we saw cashback affiliates allocate resources towards educating the Australian market on the cashback model. The production of these educational assets has, in turn, helped to alleviate Aussies' concerns regarding cashback, and their member bases have grown tremendously.

“Customers are more and more looking for bargains and great user experience. This will help increase the growth in channels such as Cashback,” says Catch’s Group Affiliate and SEM Marketing Manager, Matthew Lloyd. “With these channels using more traditional above the line advertising, this will mean that retailers will need to consider more how to use them, to match user expectations.”

This shift in consumer preferences in conjunction with more consumers trusting in the model will drive steady increases in cashback member bases and revenue streams generated from cashback affiliates in 2019.

Increased Participation in International Sales Events

Previously, Black Friday for Australians was noticed more for its entertainment value versus being a significant shopping event. Now, this international sales event has become a part of our annual calendar with about 21 percent of Australians participating and spending approximately $320 million over the weekend online and in store. In 2018, our network witnessed massive performance increases across our advertiser and affiliate portfolio including lifts in transaction volume, AOV, sales revenue, and commission.

Australian advertisers and affiliates are recognising the impact that this sales event can have on their annual revenue streams, and we expect the number of advertisers and affiliates participating in international sales events such as these to continue to grow dramatically in 2019.

Strategy Innovation

More and more agencies are incorporating affiliate marketing into their service offering as it is becoming more apparent that this channel brings incremental value for an advertiser at a high ROAS and low spend. As the presence of this service offering at agencies continues to grow, we anticipate there will be an emergence of hybrid promotional methods into the market.

“Growth in different forms of acquisitions will be at the forefront this year. With more retailers in the market, both domestic and from overseas. Being able to attract new customers to your brand, with innovative strategies throughout the year, will be the big play. This will need to be across multiple channels including video and voice. Customer expectations and usage in these channels will only increase in this year.”

We will start to see more strategies that utilise collaborations of the affiliate channel and other paid media channels which will open doors for advertisers to increase awareness, and improve conversion rates through both channels.

The Southeast Asia Opportunity

While there is a strong urgency amongst the rest of the world to break into the Australian market, the major players in the Australian market have had their eyes set on breaking into Southeast Asia.

According to WEF, SEA will rank as the world's 5th largest economy in 2020. This region currently encompasses ten countries with a population of over 635 million and a collective GDP of $2.5 trillion (source: IMF). In 2018, the digital world witnessed as SEA emerged as a booming demographic due to shifts in online consumer behaviour. As we move further into 2019, we will see an influx of affiliates tailoring their sites and promotions to match the rising demand in advertisers to drive brand awareness in the SEA market.

In summation, we will continue to see a refinement of process as a result of the privacy regulations that were enforced in 2018. Affiliate marketing service offerings within agencies will continue to increase in the Australian market which will produce more opportunities for cross channel collaboration. We will see an increase in cashback presence in the Australian market through changes in consumer attitudes, and we will see a rise in affiliate revenue as advertisers adopt a cashback strategy and incorporate promotion during international sales events as part of their digital strategies. This along with efforts to break into the SEA market will drive innovation forward in the new year.

Wise Words from the Experts

We have included some of the below quotes and predictions in the body of the article but we felt their contributions were of great enough effect and value to keep them in their entirety here:

Geno Prussakov"2018 was marked by an increasing number of mergers and acquisitions within the performance marketing industry, and I expect this tendency to continue in the new year. Additionally, I believe that 2019 will be the year of further divergence and clearer differentiation between affiliate marketing relationships and influencer marketing arrangements, which often differ and shouldn’t always be approached identically, even though they can be combined at times. Finally, I expect a closer advertiser focus on affiliate value, incrementality, and new customer acquisition."

Geno Prussakov, CEO, AM Navigator OPM Agency

0-3“2019 will see networks having to invest in the basics to future-proof their affiliate campaigns. Apple’s latest Safari update showed what disruption can be caused by one company making a change in how and what they track and who is to say others won’t follow suit. That we have no control over these macro factors shows how vulnerable the digital ecosystem is to the vagaries of the tech giants. On the subject of situations beyond our control, there are increasing challenges to cross-border trade through taxes and trade wars that could be deleterious to the continued growth in overseas affiliate sales. Finally affiliate marketing has to create a compelling story, offering reassurance to brands questioning how and where their digital dollars are being spent. With the increasing disillusionment with programmatic for a whole host of reasons including privacy, transparency and fraud, the affiliate channel has the chance to shape an alternative, positive vision for ongoing investment.”

Kevin Edwards, Global Client Strategy Director at Awin Global

0-2-1Growth in different forms of acquisitions will be at the forefront this year. With more retailers in the market, both domestic and from overseas. Being able to attract new customers to your brand, with innovative strategies throughout the year, will be the big play. This will need to be across multiple channels including video and voice. Customer expectations and usage in these channels will only increase this year.
Customers are more and more looking for bargains and great user experience. This will help increase the growth in channels like Coupon and Cashback websites. With these channels using more traditional above the line advertising, this will mean that retailers will need to consider more how to use them, to match user expectations.
Change in online ordering. Gone are the days of just ordering off a website. Mobile ordering is now truly here to stay, with both mobile web and app channels. But the biggest opportunity is video not just for brand awareness but for selling as well. It can not be that far away, where users will able to order via their television sets. You will be able to order via your television whilst watching your favourite YouTube channel. Voice will not be too far behind, it is a case of just being able work out the attribution value of voice this year. Plus, the rapid development in Online Image Search, particularly in fashion, will add to the user experience and potentially reduce return of goods. So, 2019 is likely to be the year of new technologies and multiple devices, you can order via.

Matthew Lloyd, Group Affiliate and SEM Marketing Manager at Catch Group

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