The Growth of Affiliate Marketing as a Number One Marketing Tool for Big Brands

According to Statista, affiliate marketing spend in the US is expected to reach $6.8 billion in 2020, and that figure is expected to be at $8.2 billion by 2022. And some of the biggest brands in the world harness the power of affiliate marketing to increase sales. 

In this article, we look at how affiliate marketing has grown over the last few years, and how companies – especially big brands – are using it as their number one marketing tool. But first, it is best to clarify exactly what affiliate marketing is. 

What is Affiliate Marketing?

Affiliate marketing is the using affiliates to promote your brand or product. In return, you compensate these affiliates based on their performance – they either generate leads or sales for you. 

A really simple example of affiliate marketing would be the free casino bonus you are offered if you sign up with an online casino. Host websites will provide links to casinos (with those free bonuses as the bait), and when you click on that link and/or join up, the host website (the affiliate) will get a commission for having provided them with a customer. 

You would, in fact, be surprised by the number of brands in various industries – especially the retail industry – that use this tactic in their affiliate marketing campaigns. This is one of the strategies that can be a win-win for all parties – if the campaign is designed and implemented correctly. 

This is just one example of how companies can use affiliate marketing to promote their brand. The type you choose will depend on your goals and what your target marketing will respond best to. 

The Growth of Affiliate Marketing in 2020 – The Facts

Here are some extremely interesting figures that will tell you how impactful affiliate marketing is, and why so many companies across the US and the world are using it as their main digital marketing tool:

  • The affiliate marketing segment is worth $12 billion in 2020 and is expected to grow at a rate of 10% per year. 
  • Companies, on average, use 15% of their advertising spend on affiliate marketing. 
  • A well-designed program and boost your company’s revenue by a massive 30%!
  • Affiliate marketing – along with email marketing – is one of the biggest sources of income from the internet in the US and Canada. It accounts for more than 16% of revenues generated online. 
  • The US is the market leader in affiliate marketing. 
  • According to Mediakix, 81% of all brands in the US depend on affiliate marketing as a promotional tool. 

These are just a few of the facts about how the affiliate marketing industry is growing and how it can help businesses grow. The next step is to find out how businesses have used this strategy effectively.

The Evolution of Affiliate Marketing

Thanks to the growth of social media, affiliate marketing has become even more important. Businesses have been using platforms such as Instagram, Facebook, Twitter and so on to establish their affiliate networks and marketing strategies. In fact, data shows that mobile affiliate marketing is now gaining more importance as the best way to reach target customers. This is because as of 2019, 63.4% of users access the internet using their mobile devices. 

This number is expected to grow exponentially over the next few years. And because of this, brands are focusing on mobile content now more than ever. 

Studies show that over the next few years social media influencers will have an even greater impact on affiliate marketing, and voice searches will increase. This is because people view influencers as brand ambassadors, so when a company uses affiliates who are also social media influencers, it helps them grow their brand and even increase sales better. 

As a result of the growing importance of this type of marketing, there will be a proliferation of affiliate marketing agencies and big brands will allocate even bigger budgets to this marketing segment. 

How Have Big Brands Used Affiliate Marketing to Grow?

E-Commerce CEO uses the case study of Amazon.com to explain how affiliate marketing can help a business grow. This company’s affiliates educate shoppers on the products that are available on the Amazon website. Each affiliate chooses a niche – a product that they are familiar with and they promote that product. The beauty of Amazon’s affiliate program is that anyone can sign up for this program, and if a consumer uses that affiliate’s link to buy a product, then the affiliate gets a small commission. 

By creating affiliate networks, big brands are able to generate the kind of sales they need to grow. 

Affiliate Marketing for Small Businesses

Affiliate marketing is no longer the domain of big brands. Small businesses are also using this marketing model to promote their brands and increase sales. This is because of the following reasons:

  • Affiliates are only paid for the results they generate. 
  • One of the most cost-effective forms of marketing. 
  • Affiliates can be more adept at reaching your target market and creating marketing content for your company. 
  • It is easy to track the cost per acquisition through affiliate marketing – you will know whether you’re making money or losing money through this program. 
  • It is very seldom that you will lose money while running an affiliate marketing program. 

With cost as a major factor for most small businesses, affiliate marketing is actually one of the best strategies to use to create brand awareness and to increase sales and grow their company. 

Adam Hansen