Country spotlight is an ongoing series on the UK blog, where our team of local and global experts showcase what there is to know about key regions across EMEA.
This month, our Associate Director, Géraldine Paul, shines the light on Germany.
THE GERMAN AFFILIATE MARKET
Before we talk about the key differences between the German and UK affiliate markets, it’s important to look at the digital market in Germany. There are some unique differences that some say make Germany ‘the most strategic country’ in Europe.
Germany has the fifth-largest consumer market in the world by household final consumption expenditure (1,952,625 million of US$). The top 10 largest consumer markets are: United States, European Union, China, Japan, Germany, United Kingdom, India, France, Brazil and Italy.
There’s no doubt e-commerce has significantly expanded over the past decade. In fact, revenue generated by online shopping is expected to reach €509.9 billion in Europe this year. While the UK and United States still top the online commerce leader board, Germany is increasingly staking its claim as a leader in online spend and by 2020 e-commerce is tipped to be worth some €73.3 billion.
In addition, Germany has a high digital penetration rate with about 93% of the over 80 million German inhabitants having internet access; with a 73% desktop and 27% mobile share. It’s important to note that television still remains the most important medium in consuming media across Germany at 68%, followed by desktop (9%) and newspapers (6.25%).
Now let’s look at affiliate marketing specifically.
Affiliate Marketing has been established for over 20 years in Germany and the German e-commerce industry is likely to expand by around 9% in 2019. Unlike the UK very few German merchants run their affiliate programmes in-house. As a result of this the German market focuses strongly on Affiliate Networks as a platform provider. The largest Affiliate Network is Awin, after their merger with affilinet at end of 2017. Other popular networks include, Financeads, Tradedoubler, Comission Junction, Webgains and Rakuten Marketing.
Due to historical political systems Germany has always had strict laws when it comes to personal data and privacy. One of the biggest challenges for both, advertisers and publishers is the GDPR and the e-privacy directive, which could have a huge impact on affiliate marketing as well as other digital channels. Companies should ensure they are reviewing their processes and contracts to ensure they are complaint with the GDPR and the e-privacy directive. 
KEY DIFFERENCES BETWEEN THE GERMAN AND UK AFFILIATE MARKETS
Language is one of the biggest differentiators between the two markets. For example, in contrast to the German market in the U.K., the term “performance marketing” is increasingly used instead of “affiliate marketing”.
The UK market is more mature in terms smartphone penetration, combined with widespread 4G/5G coverage. However, in Germany mobile devices are playing an increasingly important role with 40% of Germans making purchases via a mobile device.
Due to increasing mobile traffic, cross-device tracking is becoming important in Germany. However, 86% of advertisers in Germany lack this. Only 14% already have a tracking in use and 31% plan to implement it this year. As mobile penetration increases, and smart phone use matures across Germany we would expect more advertisers to adopt cross device tracking.
Type of market and affiliates
Another key difference between the two markets is the publisher models that are most common. In 2018, the top three publisher types by spend in Germany were Coupon, Loyalty and Cashback and Price Comparison sites compared to the UK where the top three were, Loyalty and Cashback, Voucher and Content. Partnerships with Price Comparison sites represent 21% in Germany but only 9% in the UK and Loyalty sites represent 35% of the UK affiliate market, but only 22% of the German market. These differences reflect a variety in market application of affiliate programmes, and reinforce the importance of tailoring your activity with affiliates based on market nuances. 
WHY GERMANY IS OF SUCH HIGH STRATEGIC IMPORTANCE
Germany is one of the most dynamic digital markets in Europe. For brands it presents many opportunities thanks to its size, innovation and scalability. Any brand looking to expand into Germany from the UK should take note of the differences between markets and ensure they tailor their affiliate programme accordingly.
If you would like to find out about launching or growing your global affiliate programme. Get in touch with our team of affiliate marketing experts today.