When implementing a digital marketing strategy, there are a lot of options to sift through. Just a few channels to consider are email, pay-per-click (PPC), display advertising, social media marketing, content marketing, and search engine optimization (SEO). Affiliate marketing is also in the mix, although some people seem to just now be catching on to the idea of utilizing it as a strategy.
As an affiliate marketing agency, you might think we at Advertise Purple are a bit biased, but I’d like to share with you a study based on key data put together by Commission Junction that found the following overall:
“We found that overall, when a shopper interacts with the affiliate channel, they are more likely to purchase, spend more with each purchase, and make more subsequent purchases. Furthermore, we also found that shopper interaction with the affiliate channel positively affected results for both new-to-file and return customers.”
The study put together two groups. One was a control group and one was a test group. The control group did not interact with the affiliate channel, while the test group did. The results were as follows.
They were extremely positive towards the test group. The study found a 46% higher shopper to customer conversion rate, 29% higher spend per customer, and 88% higher revenue per shopper.
The study found affiliate compounds the value of returning customers by influencing them to purchase more, spend more, and convert at a higher rate, leading to greater revenue per shopper and lifetime value.
But besides creating repeat customers, affiliate also has proven its ability to attract new customers for a brand. The study found a stronger ability to convert new customers for a brand than those potential customers who never interacted with the affiliate channel.
To be fair, CJ also found that while these new customers convert at a higher rate through the affiliate channel, they spend less on each purchase and complete similar numbers of orders than non-affiliate customers. This kind of makes sense, since the two sub-groups of people were kept the same.
However, these customers are then likely to continue to shop through the affiliate channel and therefore benefit from the higher revenue per shopper numbers we saw in existing customers. Ultimately, they will drive more revenue over time.
So, a little bit more details on the parameters of the study:
The brands used in this study were highly recognizable household brands, with a combined total revenue of approximately $31B. The data source for the study were retail client CRM customer files, transaction data, site visit data, and affiliate click data. The study happened around September 2018, the total population size was 20.2M (1.1M affiliate shoppers, 19.1M non-affiliate shoppers). We saw 5.5M retail transactions making up the total transaction volume.
Brand awareness, seasonality, and time to conversion were both kept the same for control.
As far as a conclusion, this is what CJ had to say about the results of their study and what to take away from it:
“The results that we uncovered through this study demonstrate the unique ability that affiliate has as a digital marketing channel to address a wide variety of customer need states through publishers. These publishers offer trusted third-party perspectives to meet customer needs such as: getting introduced to new brands, researching and comparing products, saving money, earning cashback, and much more. It follows then that a brand’s spend would return more in terms of key KPIs such as orders, AOV, conversion, and revenue.”
We hope you’ll consider adding an affiliate channel to your digital marketing strategy after witnessing the needle-moving effect it has and the power of incrementality. Good luck out there!