• by Laurie Sullivan , Staff Writer @lauriesullivan, December 8, 2022

Affiliate marketing continues to grow, but the channel will not “truly bloom” without measurement solutions.

Advertisers must think about how to measure their investments in affiliate to better integrate them into the rest of their ad spending approach. Partnerships can help.

“The most productive affiliate partnerships can be powerfully symbiotic and lucrative,” according to Insider Intelligence, which published a report on the topic in September. “An affiliate relationship between an outdoor goods manufacturer and a hunting and fishing magazine, for example, could be worth tens of thousands, if not millions, of dollars per year to both sides. Yet, figuring out which relationships are going to be productive still requires trial and error.”

U.S. affiliate marketing grew from $6.2 billion in 2018 to $9.1 billion in 2021, according to a report published in September from Insider Intelligence, citing data from The Performance Marketing Association (PMA) and PwC.

Still, the affiliate market is difficult to measure, according to the report. Without an easy way to integrate and compare spending in the affiliate channel with broader media plans, affiliate marketing will struggle to capture more of the budgets from advertisers, according to Insider Intelligence.

The report analyzes how the marketing strategy has become increasingly accepted as ecommerce expands. U.S. retail ecommerce sales are expected to exceed $1 billion this year -- up from nearly $600 million in 2020, according to Insider Intelligence.

Other closely related strategies like search advertising saw marketers spend 78.9% more last year, rising from $48.30 billion in 2018 to $86.43 billion in 2021.

Influencer marketing -- which tends to overlap with affiliate marketing -- more than doubled in spending during the same period, growing from $1.91 billion in 2018 to $3.90 billion in 2021.

Through the first half of 2022, the volume of U.S. traffic that affiliates were sending to advertisers’ sites was up 40% year-over-year on the Awin affiliate marketing platform, the report states.

Notably, 41% of U.S. affiliate marketing budgets in 2018 went to either cash-back, loyalty; 27% to rewards publishers; 14% to coupon, voucher; and 14% to rebate platforms, according to Insider Intelligence, citing PMA figures.

By 2021, those two publishing channels accounted for 51% of the dollars spent in the affiliate space, chiefly thanks to cash-back, loyalty, and rewards’ share growing to 35%, while coupon, voucher, and rebate rose to 16%.

Despite being low-cost and efficient, most of the largest practitioners will not or cannot provide impression-level data in campaigns. That makes measuring or comparing affiliate marketing with other channels difficult, if not impossible, according to executives interviewed by Insider Intelligence.

The report also suggests that marketers build a measurement network. Most of the top affiliate networks provide some access to data needed to demonstrate the value that affiliates provide.

It’s important to understand what those options are and think about how they can or cannot be integrated into a brand’s current ad measurement and attribution methods.