It’s arguable that affiliate marketing is not as widely studied or examined as many other forms of marketing, such as paid social, display, organic search, PR/influencer marketing, retail advertising, or even word of mouth advertising.
But what if I told you that a group of marketers who were surveyed recently know exactly what affiliate can do for companies of all shapes and sizes, and that they prefer it as a marketing tactic over all of those others?
Pepperjam, an affiliate network, commissioned consulting firm Forrester to do a study on affiliate marketing and its viability as a marketing channel. In October 2019, they revealed the study and the key findings were as follows:
- “Affiliate marketing is highly effective for customer acquisition: Affiliate was a key driver of new customers and revenue for study respondents.”
- “Affiliate is less likely than other channels to worry marketers over ad fraud, channel ROI, and rising media costs. However, marketers can struggle to understand and communicate affiliate’s value.”
- “Pricing flexibility is a key driver of affiliate adoption: No pricing model (SaaS license or variable on performance) dominates, and marketers value flexibility in pricing their affiliate programs.”
Affiliate marketing topped two separate survey lists. One that asked marketers to “Please rank each of the following digital marketing channels in terms of how important they are for your organization’s customer acquisition efforts”. Another asking “Please rank each of the following marketing channels in terms of how much revenue they drive for your organization.”
20% surveyed said affiliate marketing for the first prompt and 19% for the second.
As mentioned above, pricing flexibility lowers the barriers to entry into the affiliate game. It allows for a pretty substantial amount of freedom to merchants with tight budgets that want to market using affiliates.
When marketers were asked “Which of the following best describes how your affiliate program is funded?” the responses of “Affiliate budget is fixed at the start of a budgeting cycle” and “Affiliate budget is variable based on revenue performance”, they were almost split (51% to 49%).
Also, when asked “How important is budget flexibility (i.e., having access to different payment models) for you in your affiliate program?” 59% said very important or important and 28% said somewhat important. A relatively small sub-group said it was not at all important (13%).
This bodes well for more companies adopting affiliate strategies as a part of their marketing programs. Of course, if you plan on doing so, we do highly recommend thinking long-term, not expecting that you won’t need to use other forms of marketing, and realizing you’ll have to optimize your strategies over time.
Affiliate marketing doesn’t lend itself to “moonshot” overnight success. It takes time to find the right affiliates, work with the networks, and gain comfort in the space. But as you can see from this study, those who gave it a chance ended up being happy and seeing significant ROI. We hope that happens for you too.