State of Affiliate: As Marketers Shift to Performance, Perception and Measurement Problems Threaten the Space’s Evolution

Practitioners worry that a period of experimentation and expansion is being squandered for short-term, lower funnel gains 

It’s a cliché among decision-makers: if I can’t measure it, I can’t buy it. At a time when so much data is readily available in so many ways, getting up-to-date forecasting on performance marketing and affiliate sales is maddening.

The most reliable analytics are typically months out of date compared to other interactive ad categories such as display and search. The major ad holding company forecasts barely give performance or affiliate a cursory mention. (GroupM’s Dec. 2022 global ad forecast did note one category often included under the rubric of performance: retail media. The WPP unit estimated that retail media advertising will rise about 60% and reach $160 billion by 2027.)

The best picture of performance’s rise comes from The Performance Marketing Association (PMA). In August, the PMA, in partnership with PwC, reported that affiliate marketing in the U.S. rose from $6.2 billion in 2018 to $9.1 billion in 2021.

The trade organization found that most of the spending has continued to go to “traditional” affiliate purposes. Cashback/Rewards/Loyalty and Coupon/Voucher/Rebate publishers accounted for just over half of category spending, up from previous years, the PMA said.

A range of sources across the affiliate space finds the measurement issue the industry’s biggest challenge to getting performance and affiliate greater respect.

“So much of this is a function of measurement and the competency and the tools to measure with,” says Partnerize CEO Matt Gilbert. “That,  along with  the willingness to allow evidence to come into the discussion. Again, I think this is another opportunity for our category. We love to talk about it as a relationship category. Every category is a relationship category. But that's no excuse for not allowing us to stand up and be measured, just  because there's some historical fear that we won't be measured properly or that we will be given short shrift,  and spend will move away. I personally believe that's shortsighted. If you're not willing to stand up and be measured, then it's not reasonable to expect you're going to go from a high single-digit billion dollar category to $50-, $60 billion category or more in any near term type of a cycle. Evidence ultimately will drive that.”

The lack of clear industry-recognized measurement could change, however. But that mostly depends on the actions and needs of CMOs and publishers as they turn to performance and affiliate to drive more revenue.

The history of affiliate marketing is about as old as modern publishing: a local periodical would mention a local shop as part of an advertorial or special gift section. A consumer who saw that placement would mention seeing it when arriving at the store and perhaps receive a discount.