THE PROFITABLE FUTURE OF AFFILIATE MARKETING

THE PROFITABLE FUTURE OF AFFILIATE MARKETING

A popular study conducted by For- rester Research and commissioned by Rakuten LinkShare in 2012 projected the affiliate marketing industry would grow to $3.4 billion by the end of 2015, and to $4.5 billion by the end of 2016.
This growth will be propelled, at least in part, by several key factors:

Demand

The increasing desire for merchants / advertisers to enter new markets is driving partnerships with affiliate channels. Affiliate marketing allows brands big and small to test new markets without having to make large capital invest- ments up front. Affiliate marketing is an effective way to sell products on a pay-per-performance basis.

Mainstream acceptance

More and more people and companies are beginning to understand the value of affiliate marketing. In addition to some rather high profile consolidations (namely, Google acquiring Dou- bleClick and Rakuten acquiring LinkShare), affiliates have been able to successfully sell billions of dollars in products for everyone from big box re- tailers to solopreneurs working out of a corner of their bedroom.
Affiliates are working near miracles for storefronts, micro busi- nesses and mom-and-pop shops, not to mention behemoths like Amazon and eBay.

Big spenders

Luxury brands are adopting affiliate channels to increase their reach to their more affluent shoppers who are currently spending more time and money online than ever before. According to a survey published by American Express Publishing and Harrison Group, nearly half of Americans with incomes more than $100,000 said they found out about new luxury products while shopping online. At the same time, nearly half of affluents earning $150,000 or more per year reported conducting research online for luxury products before going on to make a purchase.

Nontraditional partnerships

More than just online merchants peddling products, affiliate marketers are finding themselves in cahoots with nonprofit organizations, schools and tiny storefronts looking to expand their digital footprint. As well, these entities are signing on as affiliates themselves.

Booming global e-commerce

The gigantic boom in global e- commerce is expected to blow past $1.5 trillion by the end of 2015. As domestic companies make their move to enter foreign markets and vice versa, the need increases for affiliates and partners who are knowledgeable in those new markets. According to Internet Retailer, 54% of U.S. online shoppers surveyed say they bought from retailers who were not in the United States. Interna- tional online shopping is expected to more than quadruple between 2014 and 2020, jumping from $80 billion to $330 billion. The growth of online shopping continues to outpace that of offline shopping.

Mobile commerce

Mobile commerce is expected to exceed $100 billion by 2017 according to eMar- keter. With a full 30% of web traffic and 38% of organic search engine vis- its now coming from smartphones and tablets, advertisers and affiliates alike are in the midst of a mad dash to ensure the nearly 1 in 3 site visitors who are accessing their websites from a mobile device have enjoyable experi- ences.

As affiliate marketing continues to grow, expect the industry, tech- nology and the laws governing this industry to evolve with it. We will talk more about the technology and the laws later on in this site.

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