In an ever-changing and flooded marketplace, the competition for customer conversions is as challenging as ever. As businesses continue to seek out new strategies, the success of affiliate marketing remains one of the more popular ways to generate brand awareness, nurture customer engagement, and create a stream of passive income.
Affiliate marketing targets influencers and publishers to help promote a brand’s product or service with links on their social media accounts or websites. The concept is simple: if a click on a link results in a sale, they receive a set percentage. According to a Forrester report commissioned by Rakuten, 81% of advertisers and 84% of publishers use affiliate marketing. In addition, over half of the publishers surveyed earned more than 20% of their annual revenue from this method.
Amazon’s overall U.S. e-commerce share grew to 41% in 2021. Its 0.6% gain was the largest for any retailer, even as online sales were weaker than expected. But in April 2020, the retail giant cut its affiliate commission rates by nearly 60% for program members, which created a significant loss of revenue for participants. Amazon still leads affiliate marketing efforts with an impressive 900,000 influencers, but changes in commission rates open the door for others.
A potential challenge to Amazon’s hold comes from new affiliate programs offered by Instagram and Shopify. Instagram now allows influencers to link products uploaded into the app’s convenient two-tap payment system called Instagram Checkout and receive a commission from any sales with its billion users.
Shopify has also moved aggressively on collaborations with major digital media publishers. The e-commerce platform holds 20% of the market share with one million retailers, primarily small businesses, and its affiliate marketing program has driven up sales by a jaw-dropping 659%. Its recent partnership with BuzzFeed, whose impressive audience of 200 million readers, could help Shopify businesses generate even more revenue. Being noticed by these large media companies remains a challenge, so brands need a clear strategy for their social media marketing and PR.
Affiliate programs can offer another powerful digital marketing opportunity in tandem with a website, SEO, SEM, blog, video, podcast, e-mail, social media channels, and a collaboration with influencers. These specialists know their audience and have built trust from their loyal followers to attract and retain customers. Creating a marketing strategy that utilizes affiliate programs strategically can have a significant effect on your sales. If your business needs additional guidance, reach out to us at TREAD, and we can discuss solutions to best suit your brand or service.