Every year the affiliate marketing industry is met with challenges and opportunities as the landscape adapts to regulation, trends, new technology, and disrupters. Below our EMEA Client Services team give their take on what’s to come in 2020 in the affiliate channel.
1. The rise of the socially responsible consumer
In 2018 the longevity of our planet rose in importance. Sparked by the courageous and passionate actions of a Swedish schoolgirl, and now globally recognised environmental activist Greta Thunberg, the movement has grown in momentum with The Global Climate Strike in September 2019 taking place across 4,500 locations in 150 countries.
I feel this will become an important focus for consumers, and thus advertisers, as they think more responsibly about their shopping patterns. This Black Friday, for example, publisher Bravo Savings Network is really leading the charge with its refreshing Green Friday campaign. For each purchase made during the consumer madness of Black Friday and Christmas, Bravo have pledged to donate a tree via their collaborative partnership with Eden Reforestation Projects.
With expert climate scientists urging that 2020 is our last chance to ‘turn the tide’ on climate change, I think this is something that will be at the forefront of many consumers, advertisers and affiliates minds.
– Joanna Kenny, Account Manager
2. The impact of the recession on budget and moving to performance partnerships
The slowdown in economic growth in advanced and developing countries, along with political instability in some regions, are interpreted by analysts as a possibility of a global recession in 2020. Hearing about these economic periods of concern affects people’s eagerness to spend, which in turn impacts how companies (and ultimately brands) will spend their marketing budget.
This could be an opportunity to develop and increase the value of partner marketing within the marketing mix, as this model allows advertisers to create relationships and bring together activities across a range of digital channels with partners.
People are consuming an enormous range of media formats across different devices and partner marketing gives advertisers the ability to reach them through their preferred channels, delivering measurable engagement and acquisition, all the while controlling costs.
Brands have to consider the value of sales across all channels and the role of attribution, transparency and best practices in the ecosystem. The keys to managing any risks are technology, including tracking, analytics and reporting, performance monitoring, effective partner management and communication.
– Alvaro Sanchez, Associate Account Director
3. AI and its impact on retail
AI has been a hot topic for a while and it’s easy to see why. According to Business Insider, AI will boost profitability in retail and wholesale by nearly 60% by 2035. From an affiliate perspective I view this happening in several ways.
The first is personalisation. AI can learn about the user, their preferences, and their behaviour to the point that it can know what the user needs and when they need it. For example AI can issue the user a coupon for a given product which can trigger them to buy an additional item, generating more revenue for the advertiser.
The second is the impact of search. 80% of shoppers use site search and 72% of users will abandon a site that produces poor results. Natural language processing (NLP) is a type of AI that can be used to improve search results for the customer with minimal effort by predicting their upcoming words.
Lastly is the potential that chatbots have to make customer service more efficient and satisfying. According to Business Insider, 80% of consumers try to resolve an issue online before contacting customer service. Chatbots can be used to assist customer queries or accompany them on their journey from start to finish.
– Diego Montoya, Associate
4. More advertisers will measure incrementality in the affiliate channel
With numerous advertisers questioning the incremental value of affiliate marketing over the past decade, “incrementality” is at the forefront of industry conversations. With little data for measurement though, these discussions have primarily been based on assumptions. This year, companies across the industry have begun to publish reports on incrementality, sparking continued discussion on the topic.
With the exponential growth of data science, I expect that many more advertisers will adopt “incrementality” as a key performance metric for their affiliate activity in 2020. Whether through in-house resources or the use of third-party attribution platforms like Singleview, Altitude by Impact, and Odyssey, I anticipate that the majority of advertisers will be measuring channel incrementality in the coming years, as well, if not better than it is already being done for other digital channels like display or search. This focus on incrementality rather than ROI will transform the way we do affiliate marketing as an industry.
– Zeina Rizk, Account Manager
5. The Global affiliate market will only continue to grow
Throughout 2019 we saw a rise in our clients asking for ways they can use affiliate to grow their campaigns effectively on a global level. There are still many regions where affiliate marketing is in its infancy; while our APAC team has seen a lot of growth in markets across the region this year, there’s still a huge potential for significant growth in the region as best practice is established across the most successful current areas (influencer and mobile space).
At the same time, challenger brands using affiliate marketing as an entry route into different regions seems to be a more common theme. Many brands are looking outside of their key region and see the benefit of using the performance channel to test these areas in a low risk way through affiliate partnerships. We’ve recently launched four of these styles of advertisers focusing on using affiliate marketing to expand their global footprint.
– Stephanie Swan, Operations Director