The New Year of 2017 is quickly approaching,
so much so that earlier this week I caught myself writing “2017” instead of “2016” at the end of this year’s date, and as it does, I’ve reached out to a hand-picked selection of affiliate marketing influencers seeking their input on what they think affiliate marketing may face, enjoy, or struggle with in the coming year. Considering everyone’s busyness this late in the year, I appreciate the time and thinking that the below-quoted ten experts devoted to the task.
With pleasure I bring you more than twenty 2017 predictions from some of the world’s most brilliant affiliate marketing experts (from all sides of the business: affiliates, advertisers, and solution providers) including their Twitter handles (or LinkedIn profiles), websites, and, of course, headshots. Enjoy and do chime in with your thoughts!
Affiliate marketing will become more mainstream, which is both a blessing and a curse. Consumers will be more aware of how it is used to monetize content, and they will accept it as legitimate. However, consumers will themselves become affiliates in greater numbers thanks to an increase in revenue sharing apps and tools.
2017 is going to see substantial growth in non-traditional content affiliate relationships as merchants place emphasis on growing beyond dependence on coupon and cashback/loyalty affiliates to drive incremental sales. Merchants who commit to identifying these partners and providing them with the tools they need will prosper in 2017 and beyond.
2016 saw a lot of innovation for the performance marketing industry. Three of the more notable changes were the increased adoption of cross channel insights, emphasis on cross-device tracking capabilities, and the importance of leveraging non-traditional partners.
As we head into 2017, I see the momentum continuing in these three areas as marketers better understand the value they contribute to the channel. I estimate that less than 20% of affiliate managers have access to cross channel data, so there’s still a lot of opportunities for increased adoption. Without cross channel insights, affiliate managers are essentially flying blind and only seeing 5%-15% of the picture. This makes it impossible to accurately determine the value of individual partnerships and optimize the channel.
There has also been a lot of talk about cross-device tracking but the capabilities between solution providers vary dramatically and, in many cases, marketers are not always getting accurate cross-device tracking which negatively impacts the ability to correctly attribute credit to affiliates. In other words, all cross-device channel tracking is not equal and marketers need to understand how they differ when choosing a solution.
Lastly, brands are expanding their definition of what an affiliate can be to include small and medium business development opportunities and influencers in the channel. This approach has brands reevaluating what a partnership can mean, which in turn is helping them diversify their affiliate mix and elevating the value of the channel.
We believe there are a few trends in affiliate marketing worth taking note of for 2017:
- Influencer marketing will thrive. eMarketer suggests this space is easily a multi-billion dollar industry right now and likely to grow. As advertisers make efforts to build these relationships, a critical component will be a network’s ability to create tools that make it easy for influencers to create beautiful product showcases for brands.
- Advertisers will continue to close the loop on tracking publishers that drive consumers in-store. Similarly, as brands prioritize the building of dedicated mobile apps, publishers can encourage app downloads and in-app purchases. Having tracking in place to capture these conversions will be critical when analyzing mobile app performance.
- From using attribution to recognize affiliate’s contribution at each stage of the funnel, to using affiliate data to improve your Display and Paid Search campaigns, data will continue to be a priority.
- And some things will remain constant — and that is, the strength of coupons, deals, cash back and loyalty. Consumers have been counting on discounts to save them money since Coca-Cola invented the first coupon in 1887. And for luxury brands — shoppers will look to loyalty and cash back sites to realize savings for these higher priced goods.
These are just a few of the exciting things we can expect to see in 2017 from affiliate marketing networks, and the advertisers and publishers they support.
In 2017, I predict the affiliate marketing industry will see a continuation of the mergers & acquisitions which we saw in 2016. Deals such as Groupon acquiring LivingSocial & The NY Times buying The Wirecutter will continue throughout 2017 as publishers look to replace traditional advertising revenue with performance-based affiliate sales.
The evolution of content marketing has applied pressure on CMOs to continuously curate content around their business goals. Affiliate marketers are experts in creating compelling content around a retailer’s brand. Those retailers that understand the wide reaching, cost-effective impact affiliate marketers can demonstrate with their content will capture even greater success from affiliate marketing.
Internet Sales Tax Reform will continue to be a big challenge. States continue to pass Nexus laws crippling the livelihood of affiliate marketers and interfering with revenue opportunities for advertisers. More industry leaders need to advocate in support of the Marketplace Fairness Act; a bill that will essentially eliminate the Affiliate Nexus Tax laws. Join or donate to the PMA to make a difference.
I started moving away from search pay per click for affiliate offers to Facebook around 2010 and had a lot of success with it yielding 200%+ returns and scaling up to low six figures in spend per day in various verticals. This has drastically diminished IMO from big brands and startups that are not ROI focused spending whatever it takes for user acquisition thus raising the cost for white hat affiliates to where it’s not profitable. Plus, as Facebook has said at conferences, they are not big on affiliate marketers and would rather deal directly with the brands. With that said I know a LOT of black hat guys that cloak facebook and make a ton of money but they constantly have to make new accounts and play that cat and mouse game which I just have no interest in at this point in my life. So that also doesn’t help affiliates in general.. Plus in the last year Facebook has drastically throttled organic posts to walls so having a bunch of fans and recommending a product does not produce nearly the results it gets (Facebook does not like people to leave Facebook unless you pay them for it via ads).
The good news is that I have struck gold in affiliate marketing with Native Advertising. They are much like the early days of Facebook where there is not any big brand or startup competition (that I have seen) plus it’s almost exclusively affiliates running the same type of creative ads that we did very well on Facebook with.
As a replacement for organic, free traffic, that yields affiliate commissions — I have turned to value added content affiliate marketing. I created blogninja.com which is a free training course on how to build a blog and in the last year earned over $800,000 in web hosting commissions. This all came from users referring users.
I also have done well with affiliate marketing via live video. Primarily on YouTube Live and Facebook. In addition the same thing with my blog. Give people value with a link to what you are talking about. Simple.
It looks like influencer marketing will be a big player this year. While discount/promo will continue to form the core revenue streams for merchant affiliate programs, stronger and more numerous relationships between content creators and merchants will help to build brands and diversify revenue streams. I expect to see new tools to empower and incentivize content creators.
I think we will also see some adjustments to how attribution is handled. Right now, we haven’t quite found the balancing point between simple blanket solutions like last click and very granular dynamic attribution scenarios in terms of when the extra attention to detail justifies the result.
I expect new solutions for improving efficiency and effectiveness in recruiting, activating and optimizing affiliates. Currently, this process is very manual. Refinements and innovations in technologies that help facilitate deals between advertisers and publishers will help broaden the field of industry players by connecting trending publishers to the right advertisers.
For 2017, we see three main trends gathering steam:
1. Monitoring and compliance automation will gain further traction. No one wants to use a manual, error-prone, time-intensive, and ineffective monitoring system if they can avoid it. Brands and affiliates alike will turn to automated technology solutions to help them run effective programs that protect their brands.
2. Brands will be penalized for not meeting regulatory requirements. Despite high-profile cases in 2016 against well-known brands like Lord & Taylor and Warner Brothers, noncompliance with the Federal Trade Commission (FTC)’s rules persists. Our recent survey of affiliate bloggers revealed rampant noncompliance with FTC rules.
3. Affiliate networks and brands will partner to strengthen their offerings. We predict an uptick in partnerships as brands and affiliates focus on their core business, while widening their offering to include services like paid search monitoring and more.
The affiliate marketing industry grew tremendously during 2016, and we expect 2017 will be no different. There were numerous milestones that helped affirm the affiliate marketing industry, including the NYT acquisition of Wirecutter and New York Magazine launching online product recommendation page, The Strategist. As the affiliate industry continues to grow there are two trends we can count on experiencing.
Increase in Long Tail Merchants
At VigLink, we have seen our tail merchants (those greater than 1000 in sales rank) double in revenue share and we expect the trend to continue. The absolute number also grew more than 175% from 40k to 70k. More merchants are beginning to realize that no matter how small they might be, an affiliate program can contribute incremental revenue to their business model. The high prices of adwords and the increased sophistication of attribution tracking tools lead advertisers out of display and search campaigns that can be ROI negative.
Globalization of Affiliate
We will also see more merchants expanding their networks on a global scale. We’ve already begun to see the effect of globalization on affiliate marketing. More than 20% of our traffic is “out of locale” meaning the content creation and the audience hail from different geographies. We see increasing publisher recognition that this traffic is wasted with traditional affiliate techniques. We also see US retailers trying to gain a share of the global market by launching international affiliate programs. Similarly, international retailers, like stylenanda.com are trying to gain a share of the strong US market. Around 50% off all clicks that run through the VigLink network originate from outside the US.
As stated by Business Insider’s Dylan Mortensen, “Consumers continue to increase their time spent consuming digital media, while advertisers continue to increase their ad budgets into digital channels. The influx is not expected to let up in the near future.” 2017 will be an extremely exciting time to be part of an industry that is growing at a rapid rate and changing the landscape of how online consumers shop.
Here’s to a happy and successful year ahead; and, as mentioned above, if you have anything to add to these, please do chime in with your thoughts via the “Comments” area below.