Is Affiliate Marketing Getting Enough Respect?

DTC brands are reportedly ramping up investments in affiliate marketing as the cost of social media advertising has soared due to competition and iOS privacy restrictions.

“We’ve heard this from almost every brand I work with, it is [currently] just unbelievably expensive to acquire customers with paid marketing,” Melissa Duren Conner, partner at Jennifer Bett Communications, a PR agency with a DTC focus, told Ad Age. Affiliate marketing, in contrast, enables DTC brands to acquire customers at “a much lower cost.”

The most common affiliate marketing practice is influencers or bloggers earning a commission on a per-sale basis for promotional posts, via links to retailers like Amazon or through affiliate marketing platforms like LTK or MagicLinks. At Amazon, commissions range from 1% to 10%, depending on the product category.

“There’s a very low barrier to entry to using affiliate programs,” influencer Kara Harms told Insider. “That’s why it’s such a powerful tool for all content creators, but especially new ones, to monetize their content quickly and effectively.”

Affiliate marketing traditionally had a questionable reputation due to its transactional and largely last-click nature, but it’s seeing higher demand from marketers due to the channel’s cost-effectiveness. In 2022, 16% of all online sales were attributed to affiliate marketing, and well-crafted affiliate programs are now capable of boosting a brand’s revenue by 30%.

Pushes for more standardization and measurement to support ROI are expected to further support affiliate marketing’s growth. An increasing number of brands are also measuring influencers’ value through affiliate marketing’s sales-based payment structure versus the common flat fee in response to economic uncertainty.

Digiday’s 2023 “The State of Affiliate and Partner Marketing” study done in partnership with Awin further found brands increasingly looking to use affiliate marketing to connect with customers across the entire shopping journey — from pre- to post-purchase.

Adam Ross, Awin’s CEO, said in the study, “Affiliate partners are moving beyond the funnel — no longer simply providing inbound leads and traffic to an advertiser’s own site but actually helping to optimize traffic once it lands there.”