May 20th 2022

Having made it halfway through 2022, businesses are starting to see a significant shift in the market and consumer trends. From the US Federal Reserve announcing its biggest interest rate increase in more than 20 years, to consumers spending less on big ticket items like furniture and electronics in the UK and globally, strategically pivoting 2022 plans has a new meaning. The changing market has made partnership marketing not only a safer option for budget planning, but key for brands looking to cost-effectively boost performance.

 

Acceleration Partners' clients Q1 2022 market performance

Brands are trying to find creative ways to drive profitable revenue and not only find new customers, but retain existing customers. At Acceleration Partners, our clients' affiliate programs saw consumers engaging with brands and clicking more on specific categories such as travel (which increased 52% YoY in clicks) and food and beverage (which also went up 113% in clicks YoY). 

While some brands might have seen slight revenue declines, many more are seeing new customer increases, with new customer revenue rate increasing 54.2% in April. What does this mean? Fortunately, for many of our brands, we are reaching new audiences, with sub-affiliate networks up over 100% YoY and mobile partners up over 400% YoY in revenue. 

By 2023, Insider Intelligence predicts mobile usage in the U.S. will account for 35% of total media time and TikTok users will spend more time with the social media platform this year than YouTube users will spend on YouTube. Our affiliate groups are shifting to where the consumers are, and with partnership marketing, the options are endless. Consumer prices increased by more than 8% in April in the U.S. and globally, which means consumers are looking for ways to save money and still buy from brands they trust. 

This is where partnership marketing comes in, and why brands should lean into one of the most profitable digital marketing channels with also one of the highest conversion rates. 

Here are three reasons brands should be leaning into partnership marketing now more than ever before:

 

1. Low global consumer sentiment affecting consumer behavior

According to the Morning Consult's U.S. Economic outlook report, global consumer sentiment fell 1.6% in April, which is now 12.6% lower, relative to pre-pandemic levels. This is related to inflation and the supply chain issues as consumers are still not 100% sure if they will get their products on time, and the fact they are paying more for products and goods now than they were a year ago. Consumers now are going through extra lengths to look for the best price for specific products. 

With partnership marketing, deal and coupon partners can drive traffic to your top products and promotions to ensure consumers not only see the promotion, but are effectively engaged. Consumers are leveraging deal and coupon partners more than ever before, and according to eMarketer, U.S. adult digital coupon users will grow to 67% by 2023.   

 

2. High marketing costs out of line with brand margin goals

As margins are getting tighter for many brands, especially retailers, marketing costs usually do not decrease to accommodate the change. With partnership marketing, you can pay on a cost-per-action (CPA) basis, which means you only pay if an action occurs (such as an order). 

Because of the pay-for-performance model, brands can align their commissions to their margin goals. Do you have categories or products with low margins? You can pay a lower commission to partners and pay more for your higher margin categories. This is also a great incentive to push or promote categories or products you want consumers to buy. According to eMarketer, more consumers are switching to private labels, especially in the U.S. Incentivize your partners to promote the products you want and reap the benefits.

In addition, affiliate marketing is the only marketing channel that gives the marketing dollars back to the retailer if a return is made (if the return is made in the specified window, for example, within 60 days). In 2021, Acceleration Partners processed millions in returns for our clients globally, resulting in approximately $24 million in commissions returned to our clients. Even with returns, our clients saw a 21% increase in revenue YoY. 

Where else besides affiliate marketing can you find a risk-free investment in the digital marketing space right now?

 

3. Consumers shifting the way they shop online and interact with brands

Some brands may not win the sale with the best price or best promotion. Instead, consumers are more engaged with influencers. In fact, 37% of consumers in the U.S. trust influencers over brands. This is a significant change, as consumers are now looking for influencers to recommend products and brands. 

Partnership marketing is the perfect opportunity to work with influencers. Many influencers are already working as affiliate partners, and with new tracking capabilities and sub-affiliate networks, influencers can earn commissions when a consumer clicks through their link and makes a purchase. It's also a great way to influence a sale and ensure you are reaching the right audience. 

If you are re-evaluating your marketing budget for 2022 and want to truly scale in a profitable way, partnership marketing is the answer. At Acceleration Partners, we manage over 150+ global brands in every vertical.

With Grovia and our strong relationships with more than 60k existing click-active partners, we can work with you to customize and create a program to hit your goals, regardless of what's going on in the market. Why not lean into a marketing channel with minimal risks, new audiences and a profitable return on your ad spend?

 

Ready to grow and scale your partnership marketing program? Let's connect!
Author: Kelly Ground