At an event at the NSW Teacher’s Federation Conference Centre last Tuesday night, a panel of IAB experts, including Are Media’s Jane Huxley and Lauren Leisk, unpacked the 2024 Affiliate & Partnership Industry Review research, discussing how major publishers are embracing affiliate opportunities.
The research was designed and conducted in April 2024 by the IAB Australia Affiliate Marketing Working Group to explore experiences and plans with affiliate and partnership marketing from both sides of the industry – agencies and advertisers, along with affiliate publishers and partners. Responses were gathered from 95 advertiser and agency industry participants and 52 publisher or partner industry participants who operate affiliate marketing programs in Australia.
66 per cent of advertisers and agencies surveyed have five years or less personal experience with affiliate and partnership marketing. Company experience is varied but around 58 per cent of respondents say their company has five years or less experience. The profile of advertisers and agency respondents’ experience with affiliate and partnership marketing remains very similar to the survey last year.
54 per cent of publisher respondents have five years or less personal experience with affiliate marketing, this was very similar to the previous survey last year. Publisher companies have more experience with 59 per cent having more than five years experience (this is up from 44 per cent in the previous survey).
This year’s survey sample of advertisers predominantly manages their affiliate programs in-house, whereas last year, half used an agency. Advertisers engaging in affiliate marketing come from a range of company sizes. However, 42 per cent come from large businesses (with more than 250 employees), similar to last year’s survey.
The number of advertising clients that publishers work with on affiliate partnerships varies, with 42 per cent having 500 or more advertisers. Small to large publishers are involved in affiliate marketing, with a 33 per cent of publishers having more than 250 employees.
Affiliate marketers and publishers operate across a range of industries. Retail is the dominant industry for advertisers/agencies and publishers. Retail has also been the dominant industry for affiliate and marketing partnerships across all previous waves of this survey (since 2021).
Over a third of advertisers are now spending $50,000+ gross on average each month on affiliate and partnership marketing. Spending in top categories of $50,000+ per month has increased slightly over the last four years.
CPA remains the predominant way to reward publishers within affiliate programs, and this payment method has increased since last year. It is also common to use a combination of payment models. Among publishers, the usage of Tenancy Fees (fees for placements, e.g., eDM inclusions) has increased significantly compared to last year, along with the usage of cost per thousand impressions.
37 per cent of advertisers surveyed, affiliate and partnership marketing contributes over 10 per cent of the online revenue of their business or clients’ businesses on average.
For over half of publishers surveyed, affiliate and partnership marketing contributes 25 per cent or more of the online revenue of their company. In this year’s survey, there is a higher proportion of publishers where affiliate represents 25 per cent-49 per cent of revenue compared to the previous year, but overall, the proportion where it contributes 25 per cent or more remains similar to the previous year.
53 per cent of advertisers and agencies have increased their overall spending on affiliate and partnership marketing over the last year. In the survey last year, 55 per cent of advertisers and agencies intended to increase spending. 63 per cent of advertisers and agencies intend to increase affiliate and partnership marketing spending over the next year.
Nearly two-thirds of publishers have increased revenue from the affiliate and partnership marketing channel over the last year. 58 per cent of publishers also indicated they had increased the cost of placements and
inventory available to affiliate advertisers in the last 12 months. 78 per cent of publishers increased the number of advertisers they work with on affiliate and partnership marketing over the last year.
Publishers with affiliate channels have a range of business objectives, with the predominant objective to increase revenue, followed by a growing number of advertiser partnerships. Increasing revenue has grown as the main objective since the last survey when growing partnerships was more important. Objectives for publishers in 2024 remain very similar to what they have been over the last year.
On a scale of 1 to 10, with 10 being most important, commission rates and tracking and compliance practices were, on average, rated as the most important features by publishers when working with advertisers on affiliate programs.
Rewards, Content and Social are the most popular affiliate partner types for planned investment by advertisers over the next year.
Considering the current economic climate, 67 per cent of respondents across advertisers, agencies and publishers think that the affiliate and partnership marketing channel is more important in helping them achieve their business goals.
On a scale of 1 to 10, with 10 being the most important, ROI and volume of sales were, on average, rated the more important success metrics when advertisers assess affiliate marketing.
89 per cent of advertisers using affiliate marketing are satisfied with the channel in delivering a return on investment over the last year. In comparison, amongst affiliate advertisers also using SEM, 80 per cent are satisfied with SEM in delivery return on investment over the last year.
36 per cent of advertisers primarily use a first-party cookie to track affiliate marketing. Use of third-party cookies continues to decline, down to 14 per cent this year. A significant proportion do not understand how they are tracking and whether it is dependent on third-party cookies.
In recent years, browsers and operating systems have been removing third-party cookies and identifiers to increase user privacy, which continues to reduce the data signals available for ad tracking. The Australian Government has also proposed amendments to strengthen privacy legislation. However, 26 per cent of respondents across advertisers, agencies, and publishers feel unprepared for these changes.
