Why Affiliate Marketing Is The Future of Digital Marketing

Spending on digital advertising in the United States is projected to increase by approximately 85 percent between 2018 and 2023. By 2023, U.S. digital advertising is expected to amount to 201 billion dollars. 

Digital advertising is expected to account for 38% of global digital ad spending, which is expected to surpass 517 billion U.S. dollars in 2023, up from the 283 billion recorded in 2018. The entire U.S. media market is valued at 223 billion dollars in 2018, and estimated to reach 289 billion by 2022.

What is Affiliate Marketing?

Affiliate marketing is when independent digital publishers promote advertisers’ products and services. Affiliate or “performance” marketing pays publishers when consumers take action on the advertisers website. This monetary reward can be given as a flat cost per action basis , such a fixed fee for a sign-up or lead, or as a percentage commission of a sale.

Affiliate marketing has been around for as long as the internet. 

Why is Affiliate Marketing So Great?

Affiliate marketing creates a win-win-win situation between the consumer, publisher, and advertiser. The consumer receives a product or service that they want, often with a much-needed review or recommendation.from the responsible publisher. The publisher receives a commission for recommending the product or service. The advertiser makes a sale.

The win-win-win scenario created through affiliate marketing is the primary reason why performance-based advertising is the future. 

“Half the money I spend on advertising is wasted; the trouble is I don’t know which half” is a quote attributed to John Wanamaker (1838-1922) and unfortunately holds true for many brands today. With affiliate marketing, advertisers can control exactly how much they are spending on their channel and are able to accurately control their margins or cost per acquisition.

Comparing this type of control on advertising to other digital channels such as Google and Facebook shows the benefit of utilizing an affiliate network. In 2019, Google generated $130 billion dollars in advertising revenue. Facebook generated close to $70 billion in advertising revenue in 2019 

The Growth Affiliate Marketing In The U.S.

Affiliate marketing spend has been growing rapidly in the United States over the past ten years at a rate around 15%. Forrester Consulting, in a study forRakuten, projects that Affiliate Marketing spend will reach $8.2 billion by 2022 and continue a compound annual growth rate of over 10%.

 

affiliate marketing growth in USA

Source: Rakuten