Digital hangover: Changing landscape of affiliate marketing

With the rise in internet penetration to both geographies and demographics of different generations, affiliated marketing has emerged as one of the most lucrative marketing strategies. As the modern-day consumer moved on from the traditional media platforms like TVs and radios to smartphones and tablets, affiliate marketing grew exponentially in tandem. This transformed the whole supply chain landscape in the advertising domain, be it for the suppliers, advertisers and the buyers as well.

Due to an unprecedented disruption seen in 2020, owing to the COVID pandemic, affiliate marketing has grown exponentially with the ever-changing and evolving landscape as the majority of businesses jump on the digitisation bandwagon. The competition is fierce and only those who can leverage technology solutions with an innovative bent of mind can survive.

Browsers are constantly strengthening their policies against push notifications; link redirect methods and Gen Z are taking over much of the video ad format. Therefore, the need of the hour is to move towards an approach that is pragmatic and garners a ‘user-positive’ response.

Those who have a keen eye for new opportunities, untapped areas, and are constantly innovating will thrive in the industry with its rising potential and market share. In a post-COVID era, we need to get creative and agile as the majority of operations are shifting online, if they haven’t already.

With technology as the backbone of the Industrial Revolution 4.0, new horizons will emerge and the existing ones will broaden. Affiliate marketing is a space which remains one of the most efficient user acquisition channels for brands. However, according to survey data, it is the least looked upon domain of marketing. A lot of it is because of the lack of standardised software and fragmented technology across multiple affiliate networks.  

As more brands launch their affiliate campaigns, there is a high possibility of affiliate networks coming together and consolidating their way to better technology and profit margins. 

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The dawn of videos and micro-influencers

The whole world is online. Life has become fast-paced and people are constantly engaging in video content as their major source of entertainment. Affiliate advertising through Tik-Tok videos and Instagram reels has led to the rise of micro-influencers.

People love to share their favourite products or recent purchases on social media and this will only grow in the coming years. Brands are catching up with this trend and leveraging all user touchpoints and mentions. This not only creates healthy brand awareness but also drives voluminous consumer purchases. 

Moving towards white-hat affiliate advertising

The browsers are becoming stricter by the day when it comes to their data protection policies.

Corporate giants like Facebook are banning campaigns and black hat advertising, thereby rendering the survival of black hat affiliates increasingly expensive. In a wider sense, it is also a good thing. Quality will be preferred over quantity, which will drive the fraudsters away.

In this case, many affiliate marketers find it viable to move toward white hat advertising, involving eCommerce CPA and directly sourcing from the manufacturers.

Multi-channel attribution 

Contemporary brands are trying to communicate on various ad platforms and devices to reach out to their target audience. Affiliate marketing will see an evolution with omni-channel presence. Brands will adapt to newer technologies and leverage AI to track the real source of traffic/conversion vs the last-touch attribution model most prevalent currently.

Brands have started to realise how affiliate marketers are pushing sales by driving traffic to their web and app platforms. This will also make brands rethink their affiliate commission models and come up with innovative commissions based on the relevance of attribution. 

Amazon vs DTC Brands

2020 has opened up new avenues for affiliate marketers across the globe. With so many Direct-to-Consumer (DTC) brands rising to fame, affiliates have a choice of choosing from multiple campaigns as compared to a few like Amazon and Flipkart alone. This makes advertisers and brands value them more as they are constantly innovating for attention. 

The impact of COVID-19

Covid-19 has accelerated the growth of the already booming gig-economy. More and more people are becoming solopreneurs or trying to set up a passive income owing to uncertainty in the jobs. These new micro-entrepreneurs are integrating affiliate business models and helping brands get more eyeballs. 

Affiliate marketing clearly has an exciting period ahead of it. With technology getting smarter and media giants like Google and Facebook on a mission to clean out black-hat affiliates, this channel will prove even more profitable for brands. 

Brands will look into optimising their affiliate commission and attribution models to be able to leverage this qualitative audience growth.