Affiliate Marketing Predictions for 2013

Raven

It seems like only yesterday I’ve put together the post on 2012 predictions; but 2013 is already here, and it’s time for a new one.

I have spoken with a number of key players in our industry, asking them to make their prognostications for 2013, and today I am happy to bring you their expectations of the year ahead.

The photo on the right has been shot by me on January 1, 2013 in Alexandria National Harbor — festive yet calm — and, thereby, in many ways similar to the below predictions of exciting yet just a few years back dormant areas in which we should expect interesting developments. So here they are (in no particular order):

Affiliate Marketing Predictions for 2013

1) Performance marketing will continue to take market share from display advertising.

2) Cross-platform shopping will continue to grow as an important factor for affiliate marketers.  According to Google, 90% of consumers begin a purchase process on one device but complete it on another.  And that device is most frequently a smart phone.  Increasingly, consumers are shopping online but buying offline — by picking up their phone to complete a purchase.

3) The explosive growth of mobile search will drive billions more phone calls to advertisers in 2013 than it did in 2012.  Affiliate marketers can now participate in that growth.

Jason Spievak of RingRevenue (follow them on Twitter)

4) I would like to think 2013 is the year that the affiliate nexus tax issue is straightened out by the passage of a federal law. While some consumers would be displeased, it would be a win for the states and the affiliate marketers who could come back and work in states where laws have passes previously.

Shawn Collins of Affiliate Summit (follow him on Twitter)

5) Affiliates violating paid search agreements will increasingly focus their efforts on finding unmonitored opportunities to exploit.

6) Retailers will increasingly demand that their coupon affiliates remove out of channel coupons that have leaked onto affiliate websites.

David Naffziger of BrandVerity (follow them on Twitter)

7) Mobile marketing will continue to rise early in the year as more consumers embrace the idea of shopping via the new smartphones and tablets they received as holiday gifts. However, there will be a handful of overzealous marketers trying make a quick buck in the lucrative mobile commerce space that will make major missteps that will anger consumers, privacy advocates and spur debate among regulators. This will set back efforts of good marketers and slow consumer confidence in mobile toward the middle of the year.

8) Affiliate marketing will see a renewed focus on real education for all its constituents. These education efforts will take many forms and result in the sharing of more knowledge, best practices and guidelines, better run programs, better performing affiliates, and less fraud.

Lisa Picarille of Affiliate Thing (follow her on Twitter)

9) Consumer-focus / Omni-channel Marketing: Omni-channel marketing will break down channel silos at retailers.  Advertisers will better understand how affiliate partners contribute across the customer journey.  Affiliates will be recognized for their role beyond simply closing.

10) Value-based Pricing: Advertisers will get more creative in tuning their media pricing to the quality of their traffic.  Conventional “% of sale” media pricing will give way to more creative hybrid pricing models incorporating consumer lifetime value and KPIs into media spend.

11) “Smart” Tools: Proliferation of monetization tools for smaller publishers will emerge across networks.  Better tools will incorporate sophisticated targeting algorithms and “network wisdom”.  More rocket science than ever before.

Brian Marcus of eBay Partner Network (follow them on Twitter)

12) 2013 will be the year of attribution modeling with more merchants employing tags and other tools to appropriately remunerate affiliate performance.

Geno Prussakov of Affiliate Management Days (follow me on Twitter)

13) Mobile Commerce: There will be increased focus on affiliate marketing partnerships that drive transactions from mobile devices. More Advertisers will be looking for Publishers that can drive mobile traffic and at the same time more Publishers will be looking for Advertisers that deliver a great mobile experience while tracking publisher referrals.

14) Global Commerce: National e-commerce boundaries will continue to fall as more brands and advertisers ship to more locations around the world and as consumers become more comfortable buying from overseas brands online. Affiliate marketing will increasingly become a key tactic for advertisers looking to enter new markets. Publishers with local expertise will increasingly be an invaluable resource to brands and advertisers looking to establish their presence.

15) Big Data: The term “Big Data” will be hard to escape in 2013 as more advertisers and publishers grapple with the incredible task of mining what seems to be an infinite amount of data across channels that can be used to enhance the consumer experience in ways that will increase conversion.  The use of “Big Data” solutions is a key part of that puzzle as marketers look to mine answers and insights from every channel including affiliate marketing.

16) Omni-Channel Retailing: Delivering the right ad for the right product at the right time on the right device is the ultimate answer for any online marketer looking to increase conversion. Affiliate marketing will increasingly be part of the Omni-Channel  discussion as advertisers and publishers work together to create innovative solutions that leverage insights gleaned from increased coordination across marketing channels.  Transparency will be key as advertisers look to identify and leverage trends in their affiliate channel that be used as part of an overall Omni-Channel marketing strategy.

Scott Allan of Rakuten LinkShare (follow them on Twitter)

17) There will be another major Google update on par with Panda. In keeping with black and white animal themes, it will be called Zebra.

18) Recently Bing asked “have you been Scroogled?” in response to Google Shopping scrapping organic results and only showing product listing ads with rankings based on bid price. As savvy consumers become aware of this bias and Google’s growing “creepiness,” they will escape to less-threatening, smaller alternatives like Amazon search, Bing, and mobile apps.

19) Since both serve up millions of product search results and compete for shoppers deep within the buying funnel, Amazon and Google will start acting as rivals. Both will move aggressively into “turf” presently served by the other.

20) Coupon tracking technologies will become increasingly relied upon as traditional click and cookie-based affiliate network systems prove insufficient for proper attribution through multiple social media platforms, marketing channels, electronic devices, and mobile apps.

21) Sadly, governments worldwide will accelerate their attempts to control the people’s Internet. Prepare for executive orders and new federal regulations in the United States that will regulate free speech in the name of consumer protection, fairness, and national security.

Mike Allen of Shopping-Bargains.com (follow them on Twitter)

22) The Federal Trade Commission (FTC) will undergo a significant change in leadership, but its laser-like focus on privacy and big data issues will continue.

23) The Do Not Track negotiations will completely break down, prompting regulators and lawmakers to actively intervene.

Gary Kibel of Davis & Gilbert LLP (follow him on Twitter)

24) A significant increase in affiliates who will only work with merchants who have mobile-optimized site. “Mobile” has been the buzzword for the last couple years, but 2012 really showed us just how much people do use mobile devices to shop and how much that trend is bound to increase. 2013 will be the year many, many affiliates will start to focus on participating in affiliate programs that have mobile optimized sites.

25) A move towards item-level advertising. Banner ads and text ads don’t cut it, and haven’t for years. Now, even the most casual of affiliates recognizes this and there’s a shift to using item-based, product specific marketing tools to correspond with item-specific content. I anticipate a pretty high increase in adoption of more of these dynamic tools like our Product Ad Widget.

26) Widespread recovery from Google algorithm updates. 2012 was the year of wrath from Penguins and Pandas. This may be more personal speculation than anything, but I think the majority of sites that weren’t up to par with Google’s standards have been hit with penalties and “weeded out”. There are more and more stories of affiliate sites with no reason to get hit recently recovering and regaining some of the lost traffic they had before the rolling updates. I see a moderate recovery for many affiliates affected by Panda and Penguin in 2012.

Chad Waite of AvantLink (follow them on Twitter)

27) Merchandise and Social Interplay: Product engagement is at its peak online be it on coupon sites or loyalty pubs.  We will see consumers using their power as influencers to drive products and purchases through Facebook likes, pins, votes etc.

28) Mobile and Tablet Commerce: While mobile is driving higher traffic and tablets are driving higher conversions and big ticket purchases.

Deepa Sureka of Rakuten LinkShare (follow them on Twitter)

29) Affiliate Traffic to Double on Mobile Devices: Mobile offers have always worked well for affiliate marketers as they usually come with a low barrier to entry and high user engagement. Mobile apps, the improved mobile web, and mobile games now provide an excellent launchpad for affiliates to drive traffic and reap the benefits of steady conversions. It is the lowest barrier to entry with a diverse and plentiful ecosystem for buying media.

30) Affiliate Automation on the Rise: Content of every shape and form is growing at an alarming rate across the web, and that content needs to be monetized. As more advertisers demand performance based campagnes it leaves opportunity for those developing more automated ways of serving relevant and targeted offers.

31) Video Ads explode: Affiliates have the opportunity to display video ad formats on mobile and tablet which already experience high engagement rates and pay well for that engagement.

32) New Ad Formats for Tablet: Marketers stretch their imaginations to develop new advertising experiences for tablet devices as payouts for sales and engagement on tablets continue to rise. Travel and Retail lead the way.

Peter Hamilton of HasOffers (follow them on Twitter)

33) 2013 will be the year of mobile, big data and multi-attribution. It seems like for the last 3 years people have been predicting increased usage of affiliate advertising on mobile, better use of data and the ability to properly measure who deserves credit for a sale. But only in the last few months of 2012 did we see a tipping point, not only in mobile and tablet usage (from Skimlinks 2012 e-commerce report: 23% of clicks to websites during this past holiday season came from mobile) but in the increased willingness of merchants to move out of their comfort zone and move the industry forward. These 3 trends fuel each other, as increasing reports that showcase the value of the affiliate channel both in driving sales and in creating purchase demand early in the funnel, allow marketers to rely more heavily on it. It takes work but stitching the data on mobile with conversion data, and creating cross-channel marketing campaigns (84% of people start shopping on one device and finish on another!) will be very successful.

34) 2013 will see the “mainstreaming” of affiliate marketing in terms of the numbers of websites publicly using it, the expansion of affiliate marketing around the globe, and the creativity with which website owners use affiliate. The last 2 years have been big, nay, HUGE for the affiliate industry from a perception standpoint. The general online user now appropriately value affiliate marketing above all other forms thanks to the fact that is CPA based and less intrusive on users. Site owners have responded appropriately and affiliate monetization is ubiquitous now. From renowned publications like Gawker and Telegraph Media that use Skimlinks to automatically affiliate links, to web goliaths like Facebook (which is setting itself up to be one of the biggest affiliates in the world with Facebook gifts), companies are proud to use the affiliate channel to monetize and are increasingly creative in how they do so. Expect to see even more companies turn to affiliate in 2013, and new companies start from incubators like TechStars and Y-Combinator with affiliate as the backbone of the monetization strategy from day one.

Aaron Weissman of Skimlinks (follow them on Twitter)

35) As consumers become more inter-connected astute affiliates will develop multi-platform, value add business models on web, mobile web and app that do not ‘chase the cookie.’

36) Affiliates who focus on shifting consumer behaviour to drive incremental sales via strategic partnerships will thrive both online and via mobile apps.

37) Affiliates are far too nimble and quick for affiliate networks to catch up on their innovation — however I expect them to close the gap and invest more in their platforms and service during 2013.

38) Affiliate networks in the US will start to play their part more seriously in protecting their merchants and ethical affiliates from unethical activity.

39) The industry will wake up to the huge opportunity and threat that the Mobile Wallet brings (depending on who you are!)

Matthew Wood of Performance Marketing Insights & a4uexpo (also on Twitter)

40) Attribution: Advertisers will want to better understand how all of their media interacts and the roles it plays from driving awareness through conversion.  Key findings will be understanding the value of specific affiliate business models like loyalty, coupon and deals, and content.

41) Direct Relationships: In order to move the needle in 2013, advertisers will want to work more closely with their top partners to drive incremental year over year results.

42) Integrated Solutions: I think companies will look to move away from relying on multiple technology vendors due to the increased overhead of managing all of these tools and the fragmented data that is difficult to analyze and reconcile.  At Impact Radius, we are continuing to develop tools that provide an integrated suite of marketing solutions to solve these problems.

43) Mobile: Mobile is overtaking online traffic and is the fastest growing emerging channel.  Advertisers need to leverage this opportunity with a dedicated m-commerce strategy that encompasses search, email, and affiliate.

Todd Crawford of Impact Radius (follow him on Twitter)

44) Less of a prediction, more of a hope — the US finally recognizes it needs to get its house in order and collaborates to create a self-regulatory framework to stamp out the fraud and unethical activity that artificially bloats, and ultimately damages, the channel. The industry needs to recognize that what happens in the US damages the reputation of affiliate marketing globally and the UK’s impressive efforts to professionalize the channel are being undermined by the US’s attitude of burying its head in the sand.

45) The UK will continue to show the world how affiliate marketing should be done with ethical and thoughtful accommodation of new innovations and continued best practice dissemination. The launch of the world’s first independently audited ‘state of the market’ research piece at the end of January will show how powerful the channel has become and further consolidate the UK as the world’s most sophisticated affiliate market.

46) Affiliates will continue the commoditization of their data, shifting from vanilla business models to ever more complex commercial deals. The major affiliates will continue on their paths to establish equal footing with the advertisers they promote.

47) Forward thinking advertisers will run mobile affiliate campaigns concurrently with their existing, traditional desktop campaigns. Affiliate Window experienced a 47% increase in mobile handset sales as a percentage of total network transactions in Q4 2012 and this summer should see us hitting double figure sales; a tipping point that no advertiser can ignore.

48) Good networks will recognize the need to beef up their internal expertise in order to offer more consultative services. Networks offering more basic services will struggle in the face of more demanding clients seeking business intelligence insight.

Kevin Edwards of Affiliate Window (follow them on Twitter)

Got something to add? The “Comments” section under this post is all yours; and I would love to hear from you.

About Geno Prussakov

CEO & Founder of AM Navigator – an award-winning OPM agency. Founder & Chair of Affiliate Management Days conference. Author of bestselling "A Practical Guide to Affiliate Marketing" (2007) and "Affiliate Program Management: An Hour a Day" (2011), speaker, consultant, and affiliate marketing evangelist.

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10 Responses to “Affiliate Marketing Predictions for 2013”

  1. Gary Wilson (@earthgecko) says:

    The dark side of the affiliate model will continue to proliferate in all sectors.

  2. Kush A. says:

    Awesome predictions from the experts, thank you Geno.

    Here are a couple of mine:

    - More affiliate partners will look into diversifying their marketing efforts and rely (slightly) less on Google search traffic alone.

    - Video and e-mail marketing (unique content) will gain in popularity.

  3. Jules says:

    “Cross-platform shopping will continue to grow as an important factor for affiliate marketers. According to Google, 90% of consumers begin a purchase process on one device but complete it on another. ”

    This isn’t good for the publisher! Multi device cookies please! Or Cookie – purchaser ID linking?!

  4. Leeroy says:

    49 – Site owners will buck the expected trend and revert back to showing display ads that pay instantly over fancy but laregly unreliable quality based metric driven programs, like EPN.

    Reason: Most will take 15 cents per click all day long instead of occasionally getting 25 cents but also receiving as little as ZERO for an entire days clicks far too often(hint: even once is far too often). Publishers will realize that they retain far more control by using the bidding systems behind PPC ads over the arbitrary nature of “quality click pricing” systems.

    Once burned, forever shy.

    • Thank you for your comment, Leeroy.

      Yes, banners (especially when in rotation, or in widely-targeting locations) are known for, generally, being a poor means of monetizing through affiliate programs (not only in CPC scenarios of QCP type, but also in CPS and CPL cases). The CTR is generally significantly lower than those of text or product links. Have you experimented much with other models and promotional methods?

  5. Jules says:

    I am mid stream, CPN and CPA text links do well but so do banner ads.

  6. Tom says:

    Thank you for this blog. It really put 2013 in perspective for affiliate marketing.

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