On Black Friday 2016, Affiliate Window, reported average sales recorded across its UK network of £688 per second. That’s 24,800 sales per hour and an average order value of £99.89 (10% up, YOY).
These are the kind of numbers that stop you in your tracks. But consider this: PwC estimate a 5% conversion from an affiliate click to a sale*. Well Affiliate Window managed a 6.6% rate. That’s brand engagement with 9 million potential customers. In one single day. From one single affiliate network. Engagements that very, very few brands will have anticipated and thus will not have factored into their strategic plans.
These are not peripheral numbers. Isn’t it time that all marketers (and merchandisers for that matter) pay a lot more attention to this silent giant of digital marketing. Similar results from networks such as Affilinet and Optimise Media, add significant millions of direct brand engagements on that single day, and of course thousands more sales per hour.
The affiliate marketing business model drives £17.7bn worth of UK sales according to PwC /IAB’s Value of Online Performance Marketing Study, 2015*. That’s 10% of retail eCommerce or put another way, 1% UK GDP. With an annual growth rate of 8% the effect of this digitally dependent model is set to continue generating higher advertiser sales and boosting publisher revenues.
In most organisations, Affiliate Marketing exists in the margins of marketing’s focus. By and large its management among the top 100 UK retailers and advertisers with active programmes is in the hands of more junior specialists sitting somewhere between marketing and merchandising. Their targets are not to optimise media spend, but to meet short-term (often weekly or even daily) sales targets. But as Affiliate Window’s outstanding Black Friday numbers show, the opportunity for brands to engage with customers is a wide open goal right now.
Many of the speakers at the IAB’s forthcoming Performance Affiliate Conference in January are picking up the theme: now is the time to take affiliate mainstream. This revenue powerhouse – simultaneously an advertising and sales channel – has no precedent in the conventional media world. And so distant from the strategic business plan it’s rarely found a seat at the top table when it comes to overall business strategy. The numbers are, frankly, too big not to fully manage.
The affiliate model, whether designed to drive verified leads (13% of the £1.3 bn invested in 2015) or actual sales (87% of spend) uses digital advertising techniques to generate sales and leads. While many of these will produce eCommerce sales, the growth of online to offline tracking techniques is also affecting in-store and telephone sales.
Performance Affiliate – this £17.7 bn industry – is barely a quarter of a century old. Unlike much marketing thinking around digital, which often attempts to emulate conventional media objectives, Performance Affiliate delivers sales and leads and media owners share in those returns rather than rely on cost-centred advertising budgets. This requires totally new thinking – like so many aspects of digital transformation – to fully realise the enormous potential that bringing it into mainstream strategic planning will deliver.
The IAB, together with its sponsors Affilinet, Affiliate Window, CAKE, Optimise Media and Performance Horizon, have gathered industry leaders to pose the big question: how can brands make this discipline work within, rather than on the edges of their business strategy.
At this conference, you will only hear from brands, publishers and business commentators. You’ll hear about the role of affiliate model instore and online, from INTU Digital, Britain’s biggest shopping centre owner (including Trafford Park and Bluewater). BT, the UK’s ’s third largest advertiser, will be talking about the importance of an integrated affiliate programme to its overall media strategy. Media owners Trinity Mirror and ESI are using affiliate models to forge new kinds of relationships with advertisers and their loyal audiences; affiliate pioneers, will be exploring what the future looks like; experts from retail, finance and travel will consider the model and the pressure on marketers to find audiences, and new roles in a digitally transforming world.
Full details of the event are here, and don’t forget… brands attend all IAB events for free.
* IAB / PwC Online Performance Marketing Study, 2012, 2013, 2014, 2015