The past three months or so have been challenging for all industries. But in spite of this, one gleaming light has continued to burn brightly. What are we talking about? We mean, affiliate marketing.
Recently, Rakuten Advertising conducted a study to discover how e-commerce affiliates within content, loyalty & rewards and shopping comparison within the Asia-Pacific (APAC) region were affected by the coronavirus (COVID-19). The report revealed some interesting insights to share, with many either remaining stable or witnessing improvements to their performance.
So, how exactly has affiliate marketing as an acquisiton marketing channel fared during COVID-19?
Below is an overview of what they discovered.
Web traffic growth
Of the affiliate publishers that participated in Rakuten’s research, 42% reported that their web traffic had increased during the pandemic. Meanwhile, another 34% said that their traffic had remained steady. According to respondents, 61% of their growth was organic. We know affiliates are agile marketers, and whilst our industry saw a total depletion on sports betting many affiliates were able to pivot their content marketing strategies to other verticals and drive revenue change in their business.
Many consumers have had extra time on their hands, with many advised not to show up to their workplace. With this in mind, one might not be shocked to hear that social media has been increasingly important. In the eyes of the research participants, traffic from such channels had risen by 42%. This probably wouldn’t have been the same for Igaming where a number of regions imposed outright bans during the isolation and lockdown periods. The UK also put an advertising ban on TV and Radio advertising alongside.
Changes are being made, but they’re also not
Affiliates in the Rakuten report are not just relying on their retail partners for growth. In a bid to adapt to changing consumer trends, 42% said that they have tweaked their marketing and promotional messaging. This does pose the question of what are other affiliate business owners doing? There seems to be a divide in terms of whether businesses are cutting costs and waiting or if they are being decisive and continuing to spend and pivot their strategies to move through these uncertain periods.
Over a fifth (24%) of respondents have also invested in new channels to keep up with where their target audience is hanging out online. Those that pivot will earn longer term and are going to learn more from this experience whilst other affiliate brands will lag behind. One thing is clear – every affiliate business owner will be looking to diversify revenue to combat single channel earnings as was the case of sports-betting recently.
In addition to the above, those that traditionally work on performance-based business models have kept their costs the same for the most part. 66% of survey participants mentioned that they have not changed their real estate costs during this time and the inventory available to advertisers remains the same. We have no clear understanding on whether this is the same in the Igaming Industry but common sense would say that it would have had at least a small impact on pricing because sport was offline for so long.
Not everybody has come out the other end unscathed
As is to be expected with a pandemic, affiliates have been affected by the current global situation. 19% have needed to make staff and salary deductions, with almost a quarter (24%) lowering their marketing expenditure. This is going to have a knock on effect to pricing as we move forward and operators will need to be cognisant of this for budget planning longer term. 30% of Rakuten’s respondents also said that they have been cutting costs where possible.
Our thoughts
Affiliate marketing is a robust, cost-effective channel of marketing, it is capable of withstanding difficult times and has done so in the past. When necessary, it also provides room for manoeuvre and if you are agile in your strategy and planning you can use it to your advantage in times of uncertainty.
Adaptation is something we have to deal with every day in digital. Whether it’s changing online behaviours or sudden regulatory or compliance changes. Then there are algorithmic changes in search engines, social media and so on. We as a community are used to adapting to change so using that to our advantage is advisable.
Rakuten’s research shows that affiliates are willing to embrace the rough, with some already adapting their strategies to meet new demands. These are the ones that will continue to be successful in a post-coronavirus world. For those that have had to cut costs or suffered hits to their revenue and/or traffic, they will be able to recuperate and be willing to change and meet users’ new needs.
If your business was affected and you would like to feature how you pivoted your marketing strategy and budget in our next webinar, please get in touch with us HERE
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