Affiliate Marketing spend jumps 8.4%

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Affiliate marketing sees 8.4% spike in spend across 2019 as brands ramp up investement in the channel.

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The UK affiliate industry grew by 8.4% last year according to the latest IAB/PwC Adspend numbers.

Combining revenue from nine affiliate marketing businesses, the study shows advertisers are investing more than £500m in their affiliate programmes.

2019’s annual increase marks an acceleration on the previous year’s numbers that showed a growth rate of just over 6%. Alongside the affiliate numbers, the IAB released Adspend figures that showed the entire digital industries growing by 15.4% but if the major players such as Google and Facebook are removed, the rest of market saw a more modest 2% uptick.

Affiliate IAB Study 2019

The £39m increase in commissions and fees represents on average an additional £106k spent on the affiliate channel for every day last year,

The data does not measure the revenue of businesses, including major direct programmes such as Amazon and eBay, who did not submit numbers, which means it is a partial reflection of the industry compared to years preceding 2018 when this data was modelled alongside actuals.

The results come amid turmoil in the advertising industry that could wipe more than £4bn from the total this year, according to the latest Advertising Association/WARC Expenditure Report. The report also estimates that Search and Social media could see falls of 12% and 6% respectively in 2020; the first recorded declines in these sectors. 

Affiliate marketing resilience

Affiliate businesses have reported buoyant trading in certain retail sectors such as groceries, homeware and health and beauty in the face of the coronavirus. While some advertisers have paused their campaigns and others reduced commissions, and the travel sector yet to see any comeback, 2020 could see affiliate budgets prove resilient as brands focus on the strong return on investment and guaranteed sales the channel offers.

The Amazon effect

The industry is also responding to the fallout from Amazon’s decision to slash commission rates by more than 50% in many product categories. Awin witnessed a 150% increase in the number of US affiliate applications following last month’s news.

The impact is already being felt according to data from SimilarWeb, which showed seven of the top ten referring affiliates to Amazon cutting traffic levels by an average of 51%, with total referrals down 27%.

While this is yet to fully play out in the UK, if Amazon rolls out its commission changes across its UK programme, publishers will be scrambling to replace spare inventory.

The IAB/PwC Affiliate Marketing Study collates data from nine affiliate marketing businesses, combining commissions and fees.

Companies submitting data were Adtraction, Awin, CJ Affiliate, Impact, Optimise, Partnerize, Rakuten, Refersion & Tradedoubler.

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