The Global Value of Affiliate Marketing – By Kevin Edwards

by Jenae Reid on October 25, 2017


Affiliate marketing is a big business. With Forrester estimating advertisers will be spending $7b on their U.S. affiliate campaigns by 2020, and $2.1b in the U.K., and as much again in the rest of Europe, we can comfortably say it’s a global phenomenon.

How do we quantify the opportunity and potential for brands looking to expand beyond their borders? How mature is the channel in countries outside of the U.S.?FeedFront issue 40 cover

While the origins of affiliate marketing may be disputed, we can safely say there’s no doubt it was forged in the U.S. Other countries caught on quickly and, alongside familiar American networks, many localized suppliers sprouted up, serving markets across Europe and further afield.

The U.K. Internet Advertising Bureau (IAB) has carried out an annual study of the industry, including lead generation and other broadly performance-based disciplines, for the past five years, and estimates affiliate marketing accounts for about 10% of all digital spend. It also measures return on investment, concluding more than £12 are generated in revenue for every £1 spent. With almost all the top 100 retailers in the U.K. running an affiliate program, it’s fair to say it’s an essential part of the marketing mix for many brands.

While comprehensive surveys don’t exist in other developed European territories, eMarketer states Germany, the second largest digital economy in Europe, spends around $1.34b on its affiliate marketing activities. Even more impressive, one in six sales are influenced by an activity broadly defined as affiliate in nature.

Local IAB studies in The Netherlands and France show the proportion of digital money dedicated to affiliate weighs in at around seven to 10%, so we can safely assume for mature markets it is generally on regional marketing to-do lists.

China is difficult to quantify. Such is the significant difference in its retail landscape, it is almost impossible to evaluate. Adopting a marketplace approach, as epitomised by Alibaba, it’s uncommon for smaller retailers to run standalone businesses. Instead they rely on Alibaba-owned Tmalls to push their products, dominating a 57% share of the market. Contrast with Amazon’s market share at just 0.8% of all sales in the region.

For brands looking to expand the concept of affiliate marketing is familiar and Anglophone territories are an obvious first step. Many use the U.K. as a stepping stone, but never be fooled, Europe has a homogenous approach to ecommerce. With wildly-varying affiliate mixes, delivery options, payment methods, stages of development, smartphone adoption and ecommerce sophistication, tackling this market of 500m consumers should be done with all the appropriate health warnings.

Nevertheless, the opportunity is tantalizing. By analyzing all the actual and modelled data from local sources, we can broadly assume the global affiliate market is conservatively worth in the region of $12b. What ambitious retailers and affiliates wouldn’t like a slice of that?


Kevin Edwards is the Group Client Strategy Director of Awin.

This article appeared in issue 40 of FeedFront Magazine, which was published in October 2017.


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