Industries using affiliate marketing
These days, affiliate marketing has become a lucrative tool in order to help companies expand and grow. But exactly what is affiliate marketing, and what industries use it? In this guide, we take you through everything you need to know about this marketing strategy.
What is affiliate marketing?
How does affiliate marketing work? It is a strategy in order to help boost sales and drive online revenue. It is a process in which the affiliate gets a commission for marketing another firm or person’s products, making it mutually beneficial for both parties. All the affiliate needs to do is choose a product, promote it and then enjoy earning some of the profit from every sale that is subsequently made through their site. These sales are all tracked through affiliate links from one website onto another.
One of the main advantages of affiliate marketing for a number of industries is that it helps to share the responsibilities of product marketing across a number of parties. This means for a more effective marketing strategy, as it can leverage the abilities of potentially a wide range of individuals, whilst also meaning that all parties involved getting a share of the profit. In order for this to work there needs to be three different parties: the consumer, the affiliate and/or advertiser as well as the seller.
The concept of affiliate marketing actually started in the UK in 1996, through the launch of the global Amazon Associates affiliate programme.
How much is the affiliate marketing industry worth?
Affiliate marketing in the UK is a particularly lucrative way to monetise your website, with the UK being the largest market across Europe for e-commerce. That makes it one of the best places for domestic and foreign advertisers who do affiliate marketing. Recent research about how much the affiliate marketing sector is now worth in the UK estimates that it is experiencing year-on-year growth of 9%, in data collected from the IAB. In the most recent statistics for 2017, it generated approximately £8.9 million in overall sales, with advertising spending on affiliate marketing for the same year of a staggering £554 million overall. The average annual increase has been around 15%, with the main increase in affiliate marketing spending being to do with smartphone marketing. This is growing on average at a rate of 49% each and every year.
Industries that use affiliate marketing
Now that we have established just how influential affiliate marketing can be, let’s take a look at the industries that regularly use this strategy.
One of the top publisher types for affiliate marketing in the UK is coupon sites, making up 27% of all spending. The biggest sites include VoucherCodes.co.uk, Global Savings Group and vouchercloud. Typically these sites promote voucher codes and other offers through on-site exposure as well as inclusion on newsletters sent out to consumers. However, in recent years they have expanded on their affiliate marketing strategy by including influencer collaborations, content exposures as well as in-app targeting campaigns too.
The online gaming industry, such as casino websites, has been one of the key sectors using affiliate marketing strategies. It is estimated that around 33% of all revenue for gambling comes from the online sector, making affiliate marketing particularly profitable for this industry. Affiliate marketing in this sector usually works through a referral scheme, in which gamers can benefit from a financial incentive if they can sign other people up. This network gradually increases every time with an affiliate if they widen this circle. Incentives can include things such as free spins, cash deals and cashback to those who end up signing up.
Payday loans industry
Another industry that uses affiliate marketing is the payday loans industry. Depending on the company, it can work in a variety of ways.
There are a number of different affiliate programmes that are available. For example, affiliates can be used to convert their online traffic into commission if they send customers to lenders, and this can be even the case if the consumer’s application is declined.
The extremely profitable dating site industry also uses affiliate marketing strategies on a regular basis. Given that the online dating market has been estimated to be worth around 2 billion dollars in revenue each year, it should come as little surprise, with this revenue increasing on average by 5% year-on-year.
Novelty gift market
The novelty gift market may not necessarily be one of the main industries you would think uses affiliate marketing off the top of your head, but it nevertheless is the case. It works particularly well for this sector as when people purchase a novelty gift, they tend to not have a particular product in mind, rather choosing something that is eye-catching instead. There are a number of affiliate programmes for novelty gifts available for different niches.
Cashback sites tend to do particularly well from affiliate marketing. They remain one of the biggest publisher types when it comes to spending. Different strategies are used depending on the company in question but include referral systems, whereby if a customer recommends the site to another person and they sign up, they can end up receiving cash for having done so. Loyalty and reward sites over recent years have also been focusing their affiliate marketing in order to focus on key demographics in order to boost revenue, and have done so successfully.