What is Affiliate Marketing and will it be a future trend?

Erica Genda

December 28, 2021

What is Affiliate Marketing?

Affiliate marketing became a huge trend over the past few years especially with the rise of e-commerce. However, it has been around for decades and has steadily been making a bigger impact year-on-year.

Essentially, it is when individuals (usually bloggers or influencers) help promote a company’s service or product and they receive a commission for every sale. The influencers will be provided a unique affiliate link to the business’s product or service. They then share and promote this link on any chosen social platform or website for their followers to click on and purchase. When the unique link is used for a purchase, the affiliate marketer (influencer) will earn a commission or equivalent payment.

The key here is that the influencer’s audience trust their recommendations and/or are exposed to their posts so often they are bound to click and see what a product or service is all about.

Will this continue to thrive in 2022?

Yes, affiliate marketing will be here to stay.

In the US, “spending on affiliate marketing has grown by 10% per year for about a decade. According to Statista, affiliate marketing will reach $8.2 billion in 2022, a 20% increase from 2020.”[1]

Affiliate marketing is increasingly attractive to businesses due to its low ongoing cost, flexibility, low risk, and high ROI nature. In addition, as the world remains digitally connected, affiliate marketing proves to have much higher and wider exposure now compared to traditional marketing.

With a global consumer shift of preferences to online shopping, and with 15% of daily searches on Google never being searched before[2], the online landscape still appears to not be saturated enough to halt affiliate marketing. In fact, the landscape is quite broad and open for niche industries to find their place.

What trends can we expect to see?

1. An increase in influencer power (even with smaller audiences)

The micro influencer will be even more important, especially those with selected and niche audiences. For example, personal trainers with smaller audiences will be able to promote very targeted health products and services to their following with high chance of ROI for businesses.

2. Expansion of affiliate niches

On the above note, there will be an expansion of affiliate niches. Rather than having popular influencers cross-selling multiple industry products, more businesses will focus on finding the right influencers for their products or services. An automotive company for example, will seek for YouTube Influencers that specifically talk about cars only with high engagement rates. While the audience reach may be smaller, the ROI will be higher.

3. An added layer of privacy

There are some privacy issues that could appear as a threat to affiliate marketing. However, added privacy within companies such as Google and Apple will not so much block the opportunity for affiliate markets and businesses, but rather new programs and products will be introduced to help maintain privacy during the backend processes of link tracking.

4. Trust and personality will be vital for affiliate marketers

Lastly, for affiliate marketing to remain successful, they need to reach consumers in an authentic way. For example, for a tech influencer to suddenly be promoting a wellbeing supplement may be deemed strange and that they’re just doing it for the commission. Influencers have to be likable and believable and should be promoting products and services within their wheelhouse. This tells consumers they won’t promote products just for the sake of it, but because they actually like it, therefore allowing for more patience and acceptance from followers who are exposed to affiliate marketing.

Overall, affiliate marketing is a great way for influencers to earn a living from anywhere in the world, and it is a convenient and flexible marketing tactic for businesses to use as part of product or service campaigns. There remains plenty of opportunity for businesses and influencers alike to step into the world of affiliate marketing. After all, it is the digital version of ‘word of mouth’, which has been a successful marketing tactic since the beginning of trade.

[1] https://www.practicalecommerce.com/is-affiliate-marketing-the-next-big-thing

[2] https://searchengineland.com/google-reaffirms-15-searches-new-never-searched 273786#:~:text=There%20are%20trillions%20of%20searches,wide%20variety%20of%20legitimate%20sources.

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