Australia

Zane McIntyre

CEO, Commission Factory

Although investment continues to vary across advertiser categories, we have seen interest in affiliate and partnerships grow in two main areas. For some large advertisers, after the initial panic in early 2020 that saw many withdrawing significant marketing dollars, their return in ad spend has been focused on immediate growth, leading to increased investment in the affiliate and partnership space. Another positive shift has been seen with local direct-to-consumer brands, which are now looking to expand their reach beyond the realms of social and search marketing.”

Gai Le Roy
CEO, IAB Australia

25.5m

Population

AUD ($)

Currency

87%

Internet penetration rate

7%

Ecommerce penetration rate
(% of total retail)

74%

Mobile penetration rate

$10.7b

Total ad spend (USD)

$6.6b

Digital ad spend (USD)

$264m

Affiliate ad spend estimate (USD)

8%

Projected ad spend growth 2021

2,059
Advertisers
8,302
Publishers
Share of sales by device
Share of sales by publisher type
23%
Content
21%
Sub Networks
18%
Loyalty & Cashback
17%
Coupon Code
14%
Social
3%
Comparison
3%
Display
1%
Search

This year, we’ve certainly learned that things don’t always go to plan. But that's not necessarily a bad thing. Innovation coupled with speed of change and adaptability has been the greatest differentiator and this is now key to our channel’s culture and approach. We should also highlight that collaboration has been crucial to us circumventing some of the bigger challenges in 2020, and like-minded affiliates have been focused more than ever on supporting each other with genuinely positive intentions. As the old saying goes – when one door closes, another opens.

Michael Elias
Managing Director & Founder, Upparel

Examining Australia

For the most part, 2020 looks to have worked in favor of Australia’s burgeoning ecommerce industry as retailers piggybacked on 10 years of digital transformation inside the first quarter. 

Australia & New Zealand reported a combined online sales growth of 52% year-on-year in Q1, followed by a 140% rise in Q2. Average order values showed a modest increase between the two periods, but annual rises in order growth (125%) and traffic (52%) across the second quarter showed just how quickly the virus was impacting consumer behavior.

A survey in July revealed that 24% of Australians had increased their digital shopping of non-grocery items amid local and national lockdowns, and it was only a matter of time before their behavior started influencing volumes across the affiliate channel.

Awin data shows many advertiser groups benefitting from their customers’ switch to online buying, with Food & Beverage, Consumer Electronics, Furniture & Home Furnishings, and Health & Fitness leading the way. A reassessment of these sectors’ performance in November showed no signs of volumes dropping back down to previous levels, with only Travel, Apparel and Auto reporting declines on pre-COVID expectations.

A survey in July revealed 24% of Australians had increased their digital shopping of non-grocery items amid lockdowns, and it was only a matter of time before their behavior started influencing volumes across affiliate.

Sales events continued to trend heavily upwards and not only due to cost-cutting influenced by Australia’s first recession in almost three decades. Based on record-breaking numbers across Singles' Day, Click Frenzy and AfterPay day - the latter’s revenue growing by well over double year-on-year - consumers appear to be answering the call of retailers during peak trading periods. Few could have predicted these levels some five years ago when Cyber Week barely even registered on most Australian advertisers’ programs.

Growth for the nation’s affiliate industry matured at a higher level in 2020 thanks to heightened interest around sales events and advertisers recognizing a once-in-a-lifetime opportunity to grab new customers and move spend away from traditional media.

Despite affiliate marketing’s rising profile in Australia, the lack of client-side expertise compared to other channels remains a key issue. Once viewed as a ‘hard sell’ due to often having fees higher than traditional affiliate networks, there has been a notable increase in brands willing to invest in specialized agencies for their knowledge and experience. It’s the type of trend that creates positive stories for the likes of Silverbean, a reasonably new entrant to Australia’s affiliate space, which capitalized on its early momentum by onboarding five major clients inside a couple of months. 

Growth for the nation’s affiliate industry matured at a higher level in 2020 thanks to heightened interest around sales events and advertisers recognizing a once-in-a-lifetime opportunity to grab new customers.  

In terms of trends, 2020 saw enterprise brands realizing the opportunities presented by custom tracking variables to the point where it is now common to hear these groups discussing ways of measuring customer lifetime value and repeat purchasing behavior through the affiliate channel. Such insights will prove invaluable in the long term by allowing the brands to identify which publishers are driving the most incremental value, but could also pay immediate dividends as part of their new customer acquisition efforts.

Attribution technology is another growing focus for trailblazers that want to ascertain the contributions of different publishers, making technologies like SingleView all the more viable for enriching their knowledge of partner relationships, strengths and weaknesses.

One final local trend worth monitoring is the utilization of server-to-server tracking (and other integration methods) as a means of circumventing ITP. With the cookie war raging on, and considering the backdrop of a challenging year, it’s pleasing to see industry stakeholders beginning to recognize a shared interest in safeguarding their clients and programs from further disruption.

Awin data shows many advertiser groups benefitting from their customers’ switch to online buying, with Food & Beverage, Consumer Electronics, Furniture & Home Furnishings, and Health & Fitness leading the way. A reassessment of these sectors’ performance in November showed no signs of volumes dropping back down to previous levels, with only Travel, Apparel and Auto reporting declines on pre-COVID expectations.

A survey in July revealed 24% of Australians had increased their digital shopping of non-grocery items amid lockdowns, and it was only a matter of time before their behavior started influencing volumes across affiliate.

Sales events continued to trend heavily upwards and not only due to cost-cutting influenced by Australia’s first recession in almost three decades. Based on record-breaking numbers across Singles' Day, Click Frenzy and AfterPay day - the latter’s revenue growing by well over double year-on-year - consumers appear to be answering the call of retailers during peak trading periods. Few could have predicted these levels some five years ago when Cyber Week barely even registered on most Australian advertisers’ programs.

Growth for the nation’s affiliate industry matured at a higher level in 2020 thanks to heightened interest around sales events and advertisers recognizing a once-in-a-lifetime opportunity to grab new customers and move spend away from traditional media.

Despite affiliate marketing’s rising profile in Australia, the lack of client-side expertise compared to other channels remains a key issue. Once viewed as a ‘hard sell’ due to often having fees higher than traditional affiliate networks, there has been a notable increase in brands willing to invest in specialized agencies for their knowledge and experience. It’s the type of trend that creates positive stories for the likes of Silverbean, a reasonably new entrant to Australia’s affiliate space, which capitalized on its early momentum by onboarding five major clients inside a couple of months. 

Growth for the nation’s affiliate industry matured at a higher level in 2020 thanks to heightened interest around sales events and advertisers recognizing a once-in-a-lifetime opportunity to grab new customers.  

In terms of trends, 2020 saw enterprise brands realizing the opportunities presented by custom tracking variables to the point where it is now common to hear these groups discussing ways of measuring customer lifetime value and repeat purchasing behavior through the affiliate channel. Such insights will prove invaluable in the long term by allowing the brands to identify which publishers are driving the most incremental value, but could also pay immediate dividends as part of their new customer acquisition efforts.

Attribution technology is another growing focus for trailblazers that want to ascertain the contributions of different publishers, making technologies like SingleView all the more viable for enriching their knowledge of partner relationships, strengths and weaknesses.

One final local trend worth monitoring is the utilization of server-to-server tracking (and other integration methods) as a means of circumventing ITP. With the cookie war raging on, and considering the backdrop of a challenging year, it’s pleasing to see industry stakeholders beginning to recognize a shared interest in safeguarding their clients and programs from further disruption.

Awin Talks
Meet the market
Emma Bhatti (left), Head of Advertiser Management for Commission Factory, and Sophie Metcalfe (right), Business Development Director for Awin APAC, join Rob Davinson to discuss the state of affiliate marketing in Australia. Recorded in June 2020.

The Australian affiliate and partnership market is going through a period of incredible growth. In 2019, there was a 40% increase in top-tier retailers using the channel and COVID-19 has only accelerated this demand. More advertisers are switching to a performance-based approach than ever before and with that comes an increase in demand for education.
 
As a result of our commitment to learning and development, we’ve been working closely with the Commission Factory team to raise awareness of key issues through educational content and other initiatives. One of the more notable examples from last year saw us joining forces with Commission Factory, Awin and other representatives to create APM Connect: The first ever collective of partnership and affiliate experts in Australia.

Annabel Gray
Associate Director, Silverbean
+22%
AOV
+3,668%
revenue
+62%
conversion rate
Figure 1

Fine wine market gains a taste for cashback's adaptability

+22%
AOV
+3,668%
revenue
+62%
conversion rate
Figure 1

Langton’s implemented a unique cashback campaign, a first of its kind in the market. 

Commission Factory exceeded its targets for volume without the use of coupons or devaluing Langton's brokerage service.

Cashback publishers demonstrated high levels of responsiveness to Langton's ever-changing requirements.

Last year saw everyone heading online as a result of COVID‑19 and the resulting lockdowns. This in turn has led to unprecedented time on screens and devices. The upshot? If we thought trying to grab a user's attention was a challenge before the pandemic, it now couldn’t be harder.

We predict a massive year for influencer marketing as brands look to capture their audience’s ever-shrinking attention spans. In a time of great economic uncertainty and general anxiety, people will increasingly turn to the figures they trust and respect for guidance.

Pascale Helyar-Moray
Founder & CEO, Super Rewards
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