How the Affiliate Marketing Industry Changed in 2020
2020 was a changing year for all, and of course the digital landscape and consumer shopping trends followed suit. Despite the changes in consumer shopping habits due to the impacts from the global pandemic, 15% of digital marketing revenue can still be attributed to the affiliate management channel at almost any digital marketing agency in the United States. With businesses at risk and some taking more conservative advertising approaches in 2020, the affiliate channel is relatively low-risk and high reward being performance-based, acting as a key channel brands turn to when looking to achieve a return on advertising dollars.
It Started with Amazon
A key thing to note looking back at 2020 was Amazon’s big move — slashing their Amazon Associates commission payouts back in April 2020. “The reductions are significant across product categories. For example, the fee rate for furniture fell to 3% from 8% and the percentage for grocery declined to 1% from 5%,” reports Bloomberg. Amazon’s reduced commissions certainly had an impact on larger mass media partners such as Buzzfeed, Hearst Media Corporation, and Meredith who often use Amazon affiliate links in their shoppable round-up content, targeted to encourage consumers to shop their product recommendations. While the Amazon commission cuts posed a setback for larger digital publishers, partners like Buzzfeed who rely heavily on affiliate partnerships turned to create their own solutions. They even launched their own marketplace where consumers can shop directly on the site, without ever leaving, and other media outlets are starting to follow the affiliate marketing trend a la Well+Good and Forbes.
Moving into the Holiday
We also saw the changing COVID-19 consumer shopping habits impact the way top tier media publishers are approaching the brands they feature, with key learnings from Holiday Gift Guide coverage in Q4 of 2020. Publishers, editors, freelancers, and affiliate managers galore expressed the importance of brands having an affiliate marketing program and offering a competitive commission rate to even be considered within published content. While the world of traditional PR isn’t dead, the lines are certainly blurred as brands with competitive affiliate offers are likely more certain to have top spots in round-up coverage or any spot at all. Prioritizing brands and products that have accessible affiliate links was one way media outlets could help to recover their media revenue as a result of the COVID-19-related consumer spending shifts in 2020 as they receive a commission on any sales they refer via an affiliate link.
Promotional Shifts
Finally, the affiliate channel was also key in supporting the changing promotions, sales, and offers eCommerce brands launched this year. Adobe Analytics reports that Black Friday consumer spending increased by 22% year- over-year to $9 billion dollars while Cyber Monday spend increased by 15% year-over-year, with consumer spending topping $10.8 billion. This is majorly in part due to less consumers shopping in person and instead shopping online. However, it’s also important to highlight the change in promotions offered across online brands this year.
More brands decided to compete with Amazon’s Prime Day that happened in October 2020 and ran their own sales and exclusive deals to compete with the marketplace. Additionally, several eCommerce brands chose to launch their Black Friday/Cyber Monday deals much earlier in November rather than sticking to the traditional post-Thanksgiving BFCM weekend sales.
Of note, the affiliate channel was especially important during this Q4 high traffic shopping season. Publisher communication and ensuring your brands’ offers were live across virtually every lower-funnel affiliate partner and were picked up and highlighted in Holiday Gift Guides and round-up content were key to presenting consumers with the most up-to-date and lucrative sales and deals. Affiliate managers were working strategically with media publishers to ensure all of the shifting deal information was correct and posted in a timely manner to maximize visibility across potential new customers during this period.
Affiliate Marketing 2020 in a Nutshell
All in all, the affiliate platform was extremely important to brands in the 2020 madness. As a performance-based channel where you are only paying once an actual order is driven, the risks are low and the returns are high. We expect to continue to see growth within the affiliate platform, and expansion into more unique partnerships such as continued integration between affiliate and PR, affiliate and influencer marketing, and even brand to brand partnerships leveraging successful affiliate-based relationships in 2021.
