Affiliate Survey 2012

IAB Affiliate Advertiser SurveyIn association with A4UOctober 2012

Objective: To size the growth of advertising spend on affiliate marketing channel, map trends, and identify sector hotspots and opportunities

Sample: Based on 115 advertiser & merchant companies.

Methodology: Online survey, hosted on Survey Gismo

Survey: 5-10 minute survey live during September – October 2012

Methodology

Quick summary

• 100% of advertisers survey expect their online revenues to grow in 2013, with 44% estimating revenue increases of between 11-25%

• Affiliate marketing spend share is increasing and the survey show a 45% uplift in the number of advertisers spending more than 31% of their online marketing budgets in the affiliate channel

• More than a quarter of the advertisers surveyed (28%) are running seasoned affiliate programmes that are 6 or more years old

• The channel continues to grow rapidly: advertisers with new affiliate programmes set up during the last year, accounted for 23% of respondents.

• Over half of the respondents have annual online revenues of over £10 million• Over half of the advertisers said that their monthly affiliate commission payments rose in

the last year• 72% expect affiliate commission payments to rise in the next 12 months• 61% are planning to increase their affiliate marketing spend during the next 12 months• 49% of principle revenues are from cashback and vouchercode affiliates

Source: IAB A4U Affiliate Marketing Survey, October 2012

Market sectors surveyed

Source: IAB A4U Affiliate Marketing Survey, October 2012

Other includes: Business and Industrial, Utilities, Health, Pets,

Qn: What market sector do you operate in?Qn: What market sector do you operate in?

Fashion / clothing

Home & garden

Cosmetics/toiletriesFood

Retail: Other*

* Retail: Other includes: health, jewellery, software, multi-category, music cds

Affiliate channel is engaging more brands with high online revenues: 52% report £10m+ annual t/o

Source: IAB A4U Affiliate Marketing Survey, October 2012

Qn: What is your company’s online turnover per annum?Qn: What is your company’s online turnover per annum?

Over half of the advertisers surveyed reported £10million + annual online sales revenues, a strong indicator that the affiliate channel is attracting high spending brands

Affiliate channel’s growth in 2013 fuelled by increased marketing investment in affiliate programmes: 72% say commission payments will continue to increase

Source: IAB A4U Affiliate Marketing Survey, October 2012

Qn: Do you forecast a rise or fall in affiliate commission payments during the next 12 months?Qn: Do you forecast a rise or fall in affiliate commission payments during the next 12 months?

• Significantly almost three quarters of respondents expect monthly commission payments to rise during 2013

• 81% of those expecting increased payments (see note), say they’re increasing investment in their affiliate programmes pointing to greater reliability of and confidence in the channel.

• Only 12% expect commission payments to decrease and 54% of those cite economic conditions for their prediction.

Expect increased payments (72%) Expect decreased payments (12%)

Expect payments to stay the same (17%)

NOTE: base size of reasons for rise, fall and no change inconsistent and so regard charts as narrative indicators only.

• (Commission payments over £31K show a 21% uplift from 2011 to 2012)• Advertisers paying out more than £100K per month in payments increased by 16%

Advertisers making monthly commission payments of over £31K significantly increased

Source: IAB A4U Affiliate Marketing Survey, October 2012

34% 41%

Qn: What is your average monthly affiliate commission payment?Qn: What is your average monthly affiliate commission payment?

Affiliate’s increased share of marketing investment is clear indication of the channel’s strengthening role within the marketing mix

Source: IAB A4U Affiliate Marketing Survey, October 2012

Qn: What % of your overall online marketing spend is attributed to affiliate marketing?Qn: What % of your overall online marketing spend is attributed to affiliate marketing?

NOTE: Online marketing spend defined as media spend within paid search, online display, email marketing, lead generation, social media channels and content marketing.

Programmes investing more than 31% of their marketing budget in the affiliate channel rose by:

Programmes investing less than 10% of their marketing budget in the affiliate channel decreased by:

18% 45%Advertisers investing more than 31% of their marketing budget in the affiliate channel rose from 11% (2011) to 16% (2012)

Advertisers investing less than 10% of their marketing budget in the affiliate channel fell from 51% (2011) to 42% (2012)

Greater need for marketing ROI continues: increased marketing investment in affiliate channel predicted

Source: IAB A4U Affiliate Marketing Survey, October 2012

Qn: Are you planning to increase your affiliate spend during the next 12 months? Qn: Are you planning to increase your affiliate spend during the next 12 months?

Almost 2/3 of all advertisers surveyed said they would be increasing their investment in the affiliate channel in 2013.

As the affiliate sector matures, it’s attracting a significant volume of new advertisers, indicating recognition of the channel’s effectiveness

Source: IAB A4U Affiliate Marketing Survey, October 2012

Qn: How long have you been running your affiliate programme? (to the nearest full year) Qn: How long have you been running your affiliate programme? (to the nearest full year)

58% respondents are running seasoned affiliate programmes, more than 3 years old. 28% report their programmes are 6 years and older

23% of respondents report their affiliate programmes were established within the last 12 months indicating that the channel has significant attractions to marketers

Growing consumer ‘deal searching’ trend through cashback and voucher code sites produce principle revenue streams for 49% of advertisers surveyed

Source: IAB A4U Affiliate Marketing Survey, October 2012

Qn: Which affiliate type provides your principle revenue? Qn: Which affiliate type provides your principle revenue?

Advertisers benefiting from growing consumer trend to ‘deal-search’ online.

Branded affiliate sites producing reliable advertiser revenues

Source: IAB A4U Affiliate Marketing Survey, October 2012

Qn: Which affiliate type provides your principle revenue? Qn: Which affiliate type provides your principle revenue?

Qn: What type of affiliate / publishers do you work with? Qn: What type of affiliate / publishers do you work with?

Publishers worked with

Principle revenue sources

Collaborative style emerging as advertisers blend affiliate programme planning between in-house teams, agencies and networks

Source: IAB A4U Affiliate Marketing Survey, October 2012

Qn: Thinking about how you plan and manage your affiliate programme, is the main strategy generated:Qn: Thinking about how you plan and manage your affiliate programme, is the main strategy generated:

Note: In 2011 there was no “A combination of two or more” option

Majority still using 1 affiliate network, but declining, while users of 2/3 networks growing significantly

Source: IAB A4U Affiliate Marketing Survey, October 2012

Qn: How many affiliate networks do you work with? Qn: How many affiliate networks do you work with?

For more information

For more information contact:

Clare O’Brien, Industry Programmes Consultantclare@iabuk.net

020 7050 6963