SalesTech Star

The Impact of COVID-19 on Affiliate Marketing

By RJ Garbowicz, CEO at Webtalk

The COVID-19 pandemic forced around 91% of the U.S. population indoors earlier this year—and may do so again before 2020 is over. While stay-at-home orders have been relaxed and, in some cases, completely lifted, the effects of such a widespread event are going to be felt long after—especially in what we’re buying and how we’re buying it. For an experience that was shared for millions of us, the ramification on business segments have varied widely, even in the affiliate marketing sector.

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Advertising budgets cut

Affiliate marketing has always offered merchants and businesses the opportunity to reduce their ad spend—but became even more attractive during the recent pandemic. As much as modern life closed down, traditional ads no longer made sense monetarily. No one would see a billboard or subway rail car ad, because no one was traveling. Businesses cut traditional media buys and large-scale advertising campaigns, and were forced to find digital alternatives. Now that a recession has quickly followed the economic downturn, advertisers must be even more creative with their offerings.

Affiliate marketing is a great alternative because it provides commission-based sales and marketing—which drives down the cost-per-action (CPA). By partnering with an affiliate—whether it be a review site, an influencer, or other publisher, businesses can benefit from a larger network without have to spend upfront on growing their outreach to new demographics.

This has become even more important as we continue to learn what products consumers are still buying. Consumer spending habits change during a recession, and placing on top of that the addition of the unknown health crisis of a pandemic, markets have been affected greatly and without warning. Businesses with large verticals have been able to adjust their offerings and join robust marketplaces quickly with affiliate partners.

Online shopping growth

U.S. online retailers saw year-over-year sales growth of 68% in April—which beat the previous 49% increase in January of this year. Online shopping has been a staple for many consumers for years—from Amazon clothing to online grocery stores, convenience is key—but until COVID-19, it was always a choice, not a necessity. Many business sectors have seen online shopping growth simply because there were no other options, since brick and mortar stores were shuttered.

By simply being in front of their consumers more often and for longer periods of time, another opportunity, perhaps unforeseen, presented itself. From remote working to Netflix bingeing, Americans are in front of their devices like never before. Therefore, affiliate marketers have more opportunity to get their products and services in front of their clients. And as consumers are looking for an escape from their tenth Zoom call of the day, they may be more likely to click-to-purchase now than previously.

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Importance of relationships

Networking and strong relationships have always been key to a successful business. Who doesn’t trust the word of their friend over the word of a stranger? That’s why creating brand advocates—internally and externally provides a real opportunity for marketers. Even in our beta-testing, our growth at Webtalk was up 1,400% in April over March, which includes both personal and professional networking services. We attribute much of this exponential growth to the fact that we share up to 50% of all revenue back with our members to create brand advocates and affiliates.

Last year, the affiliate industry drove 16% of all e-commerce sales including 70% of all Christmas e-commerce sales, and the industry awarded over $12B in commissions back to affiliates. Unfortunately, as we enter a recession, more and more people are going to need to look for a side hustle as they work from home and affiliate marketing is a quick and easy industry to jump into and start making money right away. The number of affiliates driving traffic, and the number of companies using affiliates, will only continue to grow.

 Marketing past COVID-19

The world has changed so drastically in the past three months—even three weeks—it’s hard to imagine what the rest of 2020 will bring. But as a successful business person, that’s what we’re tasked to do. We have to move beyond what we see now, and imagine what can be. With the amount of affiliate marketers growing, businesses are going to have to start competing for access to their platforms.

We’re going to enter a new era in affiliate marketing—one where the publisher or affiliate yields much more power. This power could also bring more trust with consumers. If consumers rely more on affiliate voices, everyone wins. More sales equals more commission for everyone. Every great challenge throughout history has presented an opportunity for business innovation, and in the affiliate marketing world, COVID-19 will continue to do just that.

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