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IAB Affiliate Advertiser Survey In association with A4U October 2012

IAB Affiliate Advertiser Survey In association with A4U October 2012 . Methodology. Objective: To size the growth of advertising spend on affiliate marketing channel, map trends, and identify sector hotspots and opportunities

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IAB Affiliate Advertiser Survey In association with A4U October 2012

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  1. IAB Affiliate Advertiser SurveyIn association with A4UOctober 2012

  2. Methodology Objective: To size the growth of advertising spend on affiliate marketing channel, map trends, and identify sector hotspots and opportunities Sample:Based on 115 advertiser & merchant companies. Methodology:Online survey, hosted on Survey Gismo Survey: 5-10 minute survey live during September – October 2012

  3. Quick summary • 100% of advertisers survey expect their online revenues to grow in 2013, with 44% estimating revenue increases of between 11-25% • Affiliate marketing spend share is increasing and the survey show a 45% uplift in the number of advertisers spending more than 31% of their online marketing budgets in the affiliate channel • More than a quarter of the advertisers surveyed (28%) are running seasoned affiliate programmes that are 6 or more years old • The channel continues to grow rapidly: advertisers with new affiliate programmes set up during the last year, accounted for 23% of respondents. • Over half of the respondents have annual online revenues of over £10 million • Over half of the advertisers said that their monthly affiliate commission payments rose in the last year • 72% expect affiliate commission payments to rise in the next 12 months • 61% are planning to increase their affiliate marketing spend during the next 12 months • 49% of principle revenues are from cashbackand vouchercodeaffiliates Source: IAB A4U Affiliate Marketing Survey, October 2012

  4. Market sectors surveyed Qn: What market sector do you operate in? Retail: Other* Food Cosmetics/toiletries Home & garden Fashion / clothing * Retail: Other includes: health, jewellery, software, multi-category, music cds Other includes: Business and Industrial, Utilities, Health, Pets, Source: IAB A4U Affiliate Marketing Survey, October 2012

  5. Affiliate channel is engaging more brands with high online revenues: 52% report £10m+ annual t/o Qn: What is your company’s online turnover per annum? Over half of the advertisers surveyed reported £10million + annual online sales revenues, a strong indicator that the affiliate channel is attracting high spending brands Source: IAB A4U Affiliate Marketing Survey, October 2012

  6. Affiliate channel’s growth in 2013 fuelled by increased marketing investment in affiliate programmes: 72% say commission payments will continue to increase Qn: Do you forecast a rise or fall in affiliate commission payments during the next 12 months? Expect decreased payments (12%) Expect increased payments (72%) Expect payments to stay the same (17%) • Significantly almost three quarters of respondents expect monthly commission payments to rise during 2013 • 81% of those expecting increased payments (see note), say they’re increasing investment in their affiliate programmes pointing to greater reliability of and confidence in the channel. • Only 12% expect commission payments to decrease and 54% of those cite economic conditions for their prediction. NOTE: base size of reasons for rise, fall and no change inconsistent and so regard charts as narrative indicators only. Source: IAB A4U Affiliate Marketing Survey, October 2012

  7. Advertisers making monthly commission payments of over £31K significantly increased Qn: What is your average monthly affiliate commission payment? • (Commission payments over £31K show a 21% uplift from 2011 to 2012) • Advertisers paying out more than £100K per month in payments increased by 16% 34% 41% Source: IAB A4U Affiliate Marketing Survey, October 2012

  8. Affiliate’s increased share of marketing investment is clear indication of the channel’s strengthening role within the marketing mix Qn: What % of your overall online marketing spend is attributed to affiliate marketing? Programmes investing less than 10% of their marketing budget in the affiliate channel decreased by: Programmes investing more than 31% of their marketing budget in the affiliate channel rose by: 18% • 45% Advertisers investing less than 10% of their marketing budget in the affiliate channel fell from 51% (2011) to 42% (2012) Advertisers investing more than 31% of their marketing budget in the affiliate channel rose from 11% (2011) to 16% (2012) NOTE: Online marketing spend defined as media spend within paid search, online display, email marketing, lead generation, social media channels and content marketing. Source: IAB A4U Affiliate Marketing Survey, October 2012

  9. Greater need for marketing ROI continues: increased marketing investment in affiliate channel predicted Qn: Are you planning to increase your affiliate spend during the next 12 months? Almost 2/3 of all advertisers surveyed said they would be increasing their investment in the affiliate channel in 2013. Source: IAB A4U Affiliate Marketing Survey, October 2012

  10. As the affiliate sector matures, it’s attracting a significant volume of new advertisers, indicating recognition of the channel’s effectiveness Qn: How long have you been running your affiliate programme? (to the nearest full year) 23% of respondents report their affiliate programmes were established within the last 12 months indicating that the channel has significant attractions to marketers 58% respondents are running seasoned affiliate programmes, more than 3 years old. 28% report their programmes are 6 years and older Source: IAB A4U Affiliate Marketing Survey, October 2012

  11. Growing consumer ‘deal searching’ trend through cashbackand voucher code sites produce principle revenue streams for 49% of advertisers surveyed Qn: Which affiliate type provides your principle revenue? Advertisers benefiting from growing consumer trend to ‘deal-search’ online. Source: IAB A4U Affiliate Marketing Survey, October 2012

  12. Branded affiliate sites producing reliable advertiser revenues Qn: What type of affiliate / publishers do you work with? Qn: Which affiliate type provides your principle revenue? Publishers worked with • Principle revenue sources Source: IAB A4U Affiliate Marketing Survey, October 2012

  13. Collaborative style emerging as advertisers blend affiliate programme planning between in-house teams, agencies and networks Qn: Thinking about how you plan and manage your affiliate programme, is the main strategy generated: Note: In 2011 there was no “A combination of two or more” option Source: IAB A4U Affiliate Marketing Survey, October 2012

  14. Majority still using 1 affiliate network but declining, while users of 2-3 networks growing significantly Qn: How many affiliate networks do you work with? Source: IAB A4U Affiliate Marketing Survey, October 2012

  15. For more information For more information contact: Clare O’Brien, Industry Programmes Consultant clare@iabuk.net 020 7050 6963

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