Industry Outlook: Affiliate Marketing Trends in 2021

2021 Predictions - Affliate Marketing

2020 taught us that the best roadmaps are ones that can bend to changing circumstances. In preparation for 2021, we’ve asked our own internal thought leaders plus experts across the industry to reflect on their learnings from 2020 and share their affiliate marketing predictions for the year ahead.  

Meet the Affiliate Marketing Experts 

With advertisers facing increased pressure to drive positive ROI, Tim Antoian, Sr. Director of Publisher Development at Fluent, and our friends at Cake and What If Media Group weigh in on their key takeaways from the past year and provide tips for navigating the changing affiliate marketing landscape in 2021.

Tim Antoian Headshot
Fluent Logo

Tim Antoian

Sr. Director of Publisher Development

Brittany Christopher Headshot
Cake Logo

Brittany Christopher

Director of Marketing

Susan Weiner Headshot
What If Media Group Logo

Susan Weiner

Chief Partnership Officer

Reflections & Predictions: Affiliate Marketing Trends

What was your biggest learning from 2020? 

Tim Antoian, Fluent  

“I have personally always lived by the motto that ‘what worked well one day, won’t necessarily work well the next.’ 2020 really found ways to test this motto and push advertisers to the limit. I think we as an industry learned a lot — how to improve our communication infrastructure, and really dig deep to find a way to flourish during this challenging period. A steady rise in Internet traffic changed how people interact online, and naturally, how and where advertisers could engage those consumers. Yet even as marketing budgets shrunk in the face of economic uncertainty, performance marketing programs remained a reliable and cost-effective channel for driving customer acquisition and overall growth. 2020 ultimately taught us that complacency is dangerous. Diversification and constant testing are the keys to survival in our evolving digital marketing landscape.” 

Brittany Christopher, Cake 

“The resiliency of affiliate marketing! Amid the ongoing COVID-19 pandemic and economic downturn, affiliate marketing gained even more traction. At the tail end of Q1 2020, advertising budgets were reduced and scrutinized even further as many brands felt the initial impacts of COVID-19. Unfortunately, for many marketers, reduced budgets increase the pressure to run campaigns that are both measurable and produce results. As a result, many organizations were looking to diversify their ad spend and focus on channels that have the lowest risk and highest ROI. With more consumers buying online, affiliate marketing became one of the most reliable channels that marketers could turn to as it is both measurable and performance-based. By July 2020, search traffic for “affiliate marketing” reached its highest peak in 11 years, and in 2021 affiliate spend in the U.S. alone is expected to reach $7.4 billion, an even greater increase from 2020 numbers.”

Susan Weiner, What If Media Group 

“The innovation, adaptability, and resilience of the affiliate marketing space. The pandemic changed the way our society functions, and with that, the types of offers that once resonated with consumers either were no longer of interest, or simply no longer relevant. There was a big unknown in the early days of the pandemic as to how big of an impact there would be on ad spends.

Our advertising partners very quickly pivoted both on offer development and messaging, but it was incredibly refreshing to see that not one of our clients looked to exploit the virus itself as a means to generate sales vs. adding value to peoples’ lives during these difficult times.   

It was also incumbent on What If Media Group to make performance marketing campaigns more efficient than ever. It is amazing what you can do when you spend 90% of the time in your home! Out of our efforts came the launch of our new artificial intelligence platform for performance marketing, ARIA, which uses a series of algorithms to zero in on consumers who are most likely to convert and quickly scale campaigns. The end result was better than we could have expected, and ARIA has positioned us to take on new advertising verticals as we enter 2021.”

What are some of your predictions for 2021? 

Tim Antoian, Fluent 

“I think we’re all a bit more comfortable with the ‘new normal’ coming out of 2020. Those that were able to adapt, did so and survived. As the economy starts to open back up, I expect certain niches like tourism and travel will start to increase their budgets again. I expect advertisers will continue to invest in digital, and more specifically, performance-based campaigns. In recent years there has been a noticeable trend in affiliate marketing away from top-of-funnel payouts, like clicks and installs, towards “deeper funnel” billable actions, like a sale or paying customer. This trend will likely continue in the new year, as there is less turnover and focus on short-term wins among affiliates, and more opportunity to grow long-lasting partnerships. 2021 will have its own set of challenges, but its own set of opportunities as well. I, for one, am excited to see what new innovations arise from this period of rapid change.”

Brittany Christopher, Cake  

“Affiliate networks will continue to expand their affiliate programs and explore additional revenue opportunities to monetize their traffic. In 2020, we saw a 50 percent increase in the number of CAKE customer’s leveraging the powerful combination of affiliate marketing and lead distribution as it provides new opportunities to monetize leads beyond what’s possible with just affiliate click traffic alone. With lead distribution, affiliate networks play an imperative role in attaining higher-quality leads that can be sold for a premium CPL, as opposed to general conversion traffic. Plus it expands the playing field for new verticals and opens up access to more affiliate and advertiser partners in that new vertical.

For advertisers, this results in pre-qualified leads that match very specific criteria. For affiliates, they gain access to a wider audience of advertisers. In this scenario, the affiliate network, affiliate, and advertiser all benefit. It is likely this trend will continue into 2021 and beyond as this combination enables all partners with greater revenue opportunities and the chance for networks to diversify their affiliate program.”

Susan Weiner, What If Media Group 

“Consumers continue to demand greater transparency concerning how companies collect, use and share their data. That means we will see further growth of data privacy and security regulations in 2021, as more states enact their own versions of the California Consumer Protection Act (CCPA) and the recently passed and more expansive California Consumer Privacy Rights Act (CRPA). Differing state laws will further support a move to Federal privacy regulations, which is likely under the new Administration, although we predict most movement will happen after 2021. Regardless, the FTC’s enforcement of privacy regulations will only increase, so companies in the affiliate marketing space must be prepared.   

Not good for Big Tech, but it will certainly even the playing field for smaller companies, especially those that collect self-reported, first-party consumer data, and offer a competitive advantage to companies that are more transparent concerning data privacy practices.  

We also generally feel that 2021 will be as unpredictable as last year. And that unpredictability will likely result in overall ad spending continuing to decline. But that decline mostly missed digital in 2020, and we believe that more dollars will continue to shift toward online, performance-based media spending this coming year from both direct to consumer advertisers as well as more traditional brands.”

What can advertisers do to optimize existing partnerships and identify new ones in the coming year? 

Tim Antoian, Fluent 

“The most effective relationships between advertisers and affiliates are no longer solely transactional. Because both parties interact with the consumer at different stages of the customer journey, they must work as a cohesive unit to drive the best consumer experience. Advertisers should look to build strategic partnerships rooted in trust, transparency, and a shared definition of success. Beyond aligning on objectives, it is also important that advertisers and affiliates have the right tech and tracking capabilities in place to measure performance and drive optimizations. Once an advertiser understands the types of partnerships that work best for their business, they can use those relationships as a framework for identifying and pursuing new opportunities.”

Brittany Christopher, Cake 

“Fostering direct, long-term relationships with affiliates that are built on a foundation of trust and true performance is vital for advertisers looking to build a profitable affiliate program. One of the best ways advertisers can optimize their existing partnerships is to treat affiliates like they are an extension of their own team. These relationships are important to the success of your overall program’s profitability. Reward affiliates with higher payouts for high-quality traffic and provide transparency into conversion data and performance metrics so that your affiliates can optimize the traffic they are driving to your landing page and provide you with the best results. 

For advertisers looking to identify new affiliate partnerships, there are four actionable ways to connect with new partners:  

  • Meet affiliates in-person at industry conferences (when they resume of course) such as Affiliate Summit, Affiliate World, India Affiliate Summit, PerformanceIN Live, and events specific to your vertical.  
  • Join popular online social media groups on LinkedIn and Facebook to start identifying new partners and building relationships. These groups often provide helpful insights about both good partners that you want to work with and bad partners that you will want to avoid. 
  • Offer competitive and enticing payouts to gain a competitive advantage and attract publishers to join your affiliate program over the competition. 
  • Build a referral program to incentivize existing affiliates to refer new affiliates to your affiliate program. If your affiliates are properly rewarded for their referrals they will be even more likely to continue introducing new affiliates to you.”

Susan Weiner, What If Media Group  

“Look for partners who can deliver an omnichannel approach.  Very few customers buy on their first visit or exposure to an ad. There are typically multiple touchpoints that lead to the end result of acquiring a customer.  The key is to find a partner who can seamlessly reach a consumer across multiple channels, and then thoroughly analyze at what points consumers choose to engage. Leveraging that front-end information along with the advertisers’ own data, ensures that they are maximizing ROI.”

This post concludes our “Industry Outlook 2021” blog series. Check out our predictions for the future of programmatic and mobile app marketing here. If you’re an affiliate marketer interested in learning more about Fluent’s SOI owned and operated rewards offers, connect with us here.