Affiliate Marketing Explained

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Worth $12 billion and generating 16 per cent of all online sales globally, affiliate marketing emerges as an unsaturated eCommerce channel used by just 11 per cent of brands and merchants – reveals the Feed Marketing Report 2022. 
Compared to 92 per cent using Search channels (with Google, Bing, and other engines) and 54 percent using Social (Facebook, Instagram, Pinterest, etc.).
Affiliates have a large gap to cover. 

Affiliate channels chasing top players

“There’s a good reason why 92 per cent of merchants use Google and other search engines for advertising their products. Search-based channels, like Google Shopping, offer global reach and find consumers at the end of the buyer funnel which translates into instant sales on a large scale,” Jacques van der Wilt, General Manager Feed Marketing at said.
“The Affiliates are however gaining increasing attention from the advertisers reducing their distance to the big competitors,” he added. 
The main reason affiliate channels are rarely chosen by brands and merchants is not their lack of effectiveness, wrong audience, or undefined stage in the purchase funnel but their complexity and segmentation. 
There are more than 11,400 affiliate programs in the US alone, and tens of affiliate networks that make the connection between advertisers and publishers possible. 
Large brands and merchants use tech solutions to meet the requirements of a number of various affiliate channels. 
The affiliates require a unique product feed, individual advertising strategy, content, and structure. They also vary to a large extent as per the audiences they represent. Complex? Undoubtedly. 
Yet for certain brands, they drive up to 25 per cent of total sales and therefore can’t be ignored. 
There are two main solutions to the affiliates’ complexity. One is networks and platforms (ShareASale, Awin, Criteo, CJ Affiliate, Rakuten Marketing, etc.) and the other is feed management solutions (DataFeedWatch, ChannelAdvisor, ChannelPilot, etc.). Both use technology to help retailers integrate with their desired affiliates. 

Most popular affiliate channels in DataFeedWatch research

The data from over 15,000 online stores, in the US, Europe, and the rest of the world, show that three platforms are used much more frequently than others: Criteo, AWIN, and ShareASale. Fashion retailers utilize affiliate channels more often than other categories of products such as Electronics, Furniture, or Health & Beauty, but affiliates still found a way into the top 10 most chosen channels in these sectors.

Apparel & Accessories: Criteo in 4th, AWIN in 8th position

Electronics: Criteo in 7th position

Furniture: Criteo in 6th, Tradedoubler in 8th position

Health & Beauty: ShareASale in 6th position

Niche channels become an important part of the multichannel mix 

Retail research by DataFeedWatch reveals the global popularity rank of eCommerce ad platforms and finds that niche channels play an important role for advertisers. Coming in 2nd place, ‘Custom’ represents channels that go beyond the 2000+ DataFeedWatch standard ad platforms and can be manually adjusted. 
DataFeedWatch speculates that the popularity of Custom Channels indicates advertisers routinely seek growth opportunities beyond the standard set of sales channels. 
Through custom feeds, they expand to new & niche channels, feed-driven product recommendation engines, feed-based personalized email marketing platforms, or connect to distribution partners.
The top channels overview reflects the market need for all advertising types: Shopping, Search, Social Media, Marketplaces, Display & Affiliate. Employing this kind of all-encompassing strategy allows merchants to fulfill the demands of growth in a competitive environment, by building multiple revenue streams and solidifying their online presence.
The report also reveals that the biggest brands and merchants, with over 200,000 product listings, advertise on average on 16 different channels. Whereas smaller merchants, offering up to 500 items, typically distribute their products to only 2 ad channels. 
“Affiliate channels are an ideal expansion opportunity for smaller stores with modest budgets. The option of paying for actual sales gives advertisers full control of the cost and also the payments come afterward which helps with small companies’ revenue flow,”Jacques van der Wilt, General Manager Feed Marketing at said.

Affiliate networks on a growing trend

Will more retail advertisers reach for affiliate platforms to strengthen their multi-channel presence, and tap into new niche audiences? If Google Trends data is any indication – it seems interest in affiliate networks has grown over the past year.

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