Share
By Alex Cramer
In September 2000, a pre-streaming era Netflix offered to sell out to Blockbuster Video for $50 million dollars. Blockbuster’s CEO laughed at the offer. Literally. He thought their business model was a joke and that the internet was overrated.
Today, Netflix is worth approximately $80 billion and Blockbuster is a b-school case study.
The point is that you never want to be the last one to know when something important is happening in your industry.
That’s why we thought it was important to share this study by market research firm Astute Analytica, which projects that the global market for affiliate marketing will grow to $36.9 billion by 2030, from just over $19 billion in 2021.
This is a massive number, but also consistent with the kind of growth we’ve seen in e-commerce overall in the last few years. A study by eMarketer shows that between 2014 and 2021, the global market for all retail e-commerce nearly quadrupled from $1.3 trillion to $4.9 trillion.
And while that’s an impressive figure, it’s still worth asking why exactly we expect affiliate marketing to nearly double in the next decade.
These are some of the most significant reasons why we expect to see major growth in the affiliate space.
Consumer Habits
The COVID-19 pandemic took an existing trend and turbocharged it. Before COVID, people liked buying stuff online, but once lockdowns and social distancing became the norm, they really didn’t have a choice.
Retail e-commerce in the United States increased by over three hundred billion dollars from the onset of the pandemic in 2019 to the beginning of 2022.
Today, with vaccines widespread, and pandemic restrictions gone, e-commerce is still experiencing rapid, double-digit growth that can now be considered the new normal, rather than merely a consequence of the pandemic.
Consumer habits can be very sticky. They’re hard to change, but once they do, it’s rare for them to go back. That’s why even as brick-and-mortar has staged a comeback in the last six months, online shopping has continued to surge
Publisher Habits
The pandemic also had a major impact on publishers. With stores shutting down and the economy looking like it was heading for a major downturn, most major brands canceled their online advertising.
This left publishers in a difficult position because they had content and an audience, but now they needed a new way to monetize it. Their solution: affiliate marketing.
In our conversation with Rakuten’s Cary Pierce, he told us that their network underwent a massive expansion in the first few months of COVID.
“Within the first two months that the pandemic took effect and everything shut down, we had a massive influx of publishers into the network. More so than we’ve ever had,” Cary told us. “And, right now, those same publishers have advertisers coming back to them, wanting to get their ads back on their site. And the publishers are saying ‘Sounds great. We’d love to write an article about your new shoe or your new camera or whatever it is. What’s your affiliate program?’”
Once publishers saw how effective their affiliate programs were, they decided to make them a core part of their revenue strategy.
“The publishers are not going to just take cash for simple exposure anymore,” Cary continued. “They want to know what your affiliate program is before they publish anything. So there’s been a wider acceptance, not just from agencies, but from publishers now understanding that in order for them to protect their investment going forward, they need the security of continual revenue.”
Bottom line: publishers realized that affiliate marketing was not only a good source of revenue but that it also protected them from paid advertising budgets that could rise and fall unpredictably, which is why more of them are using affiliate models than ever before.
Technology
Another significant driver of growth that we’ve seen with affiliate marketing specifically and e-commerce overall is an explosive development in e-commerce technology. Or, to put it in simpler terms, it’s never been easier to buy and sell things online.
Mobile phones are rapidly becoming the platform of choice for people to do their online shopping, which means that consumers can make purchases from anywhere and don’t need to be tied to their desks.
Likewise, social commerce means that consumers can buy products directly from the same social networks they discovered them on, without having to navigate away to a new page where they’ll have to input all of their credit card and shipping information.
There are also entirely new ways of selling to customers online, such as live-stream shopping, which is already a multi-billion dollar market in China and is rapidly expanding across the world, through platforms offering purpose-built technology such as YouTube, Amazon and Instagram.
While no one can know what the future holds, multi-billion dollar growth in the next 8-10 years, would be consistent with all of the developments that we’ve seen in affiliate marketing for the last few years.
