A month after our UK affiliate census went live, we’ve just published our first US Affiliate Census, produced in association with MediaTrust. I thought it was worth outlining some of the key differences - and also the similarities - between affiliate marketing on either side of the Atlantic.
Both the US report and the UK Affiliate Census (produced in association with Affiliate Window), were based on surveys of affiliates carried out in January.
Increasingly, geographical boundaries are becoming less important. More than a quarter of UK affiliates (27%) promote US merchants and nearly a third of US affiliates (32%) promote UK merchants. Large numbers of affiliates are also promoting merchants from all over the world, irrespective of where they are based, both reports found.
But despite the increasingly global nature of affiliate marketing, there are some notable differences between the US and UK markets.
In keeping with blogging fashion, I thought I would narrow this down to a nice round 10.
1) US affiliates are more likely to be full-timers
Just over half of the 450+ US affiliates (51%) surveyed work full-time in the industry, as opposed to being part-timers or hobbyists. This compares to a third of UK affiliates who work full-time on affiliate marketing.
2) Women are better represented in the US
Less than a fifth of UK affiliates (18%) are female, compared to 17% in 2007 when we carried out the first Affiliate Census. Women are better represented in the US, where 27% of responding affiliates are female. This is still low.
3) Health, Sport and Fitness leads the way in the US
In the United States, Health, Sport & Fitness is the most popular sector in affiliate marketing, promoted by 41% of respondents. (This came as no surprise to me because I'd witnessed such a big presence of these merchants at the Affiliate Summit conference in Las Vegas last year.)
In comparison, only a fifth of UK affiliates promote this sector. The biggest vertical in the UK is Travel & Flights, promoted by 33% of affiliates.
4) PPC is the most significant affiliate ‘method’ for US publishers, while SEO ranks highest in the UK
Paid search or pay-per-click advertising (PPC) is the most significant category for US affiliates (48%), marginally ahead of true content (SEO) on 46%. Just under half of affiliates surveyed say each of these methods is important to them in terms of revenue generated. The UK research found that True Content (SEO) was the most important method to affiliates, by some distance.
Other methods of affiliate marketing include blogs and forums, social networking, cashback & reward, shopping comparison and directories, email marketing and voucher / coupon codes. The rise of cashback and voucher sites is well documented.
5) Affiliate Window is the most significant UK network, while CJ is the biggest in the US
Affiliates were asked to indicate which networks are the most important to them, judged by revenue generated through the network’s merchants.
Half of all US affiliates surveyed (50%) said Commission Junction was one of their top-three networks. The next most significant networks are Linkshare (32%), ShareASale (21%) and Google Affiliate Network (also 21%).
According to our UK research Affiliate Window is the biggest network, with 43% of affiliates surveyed ranking them as the most important to them for generating revenue. Just under a fifth (18%) said that TradeDoubler is most important while 10% said that Commission Junction was their top-ranked network. (It should be noted that virtually all the major networks promoted the UK Affiliate Census to their affiliates, and not just Affiliate Window.)
6) More affiliates are promoting B2B merchants in the US
US affiliates are more likely to be involved in promoting business-to-business advertisers. More than a third of US affiliates (38%) promote B2B merchants compared to 27% in the UK.
7) Google perceived as more of a threat in the UK
The arrival of Google in the performance marketing space (i.e. through its Google Affiliate Network) is more likely to be regarded as an opportunity by US affiliates than a threat. In the UK, the reverse is true. Affiliates are more likely to view this negatively.
8) More direct partnerships in the US
US affiliates are (slightly) more likely to have a large number of direct partnerships with merchants who use an in-house affiliate program - 30% of US affiliates have more than 5 such relationships compared to 15% of UK affiliates.
9) In the US, there is more explicit talk of performance marketing.
Most people know that the advantage of affiliate marketing is that it is performance-based. In the US, people talk more about 'performance marketing' and the performance marketing industry. Yesterday our US office published an interview with Brad Waller of the Performance Marketing Alliance.
It is also worth noting that the lead generation market is still relatively embryonic in the UK compared to the US where it is huge business.
10) US industry fears Amazon Tax
A big talking point in the US is the so-called Amazon Tax. Recent New York legislation means that the state government can collect sales tax on out-of-state retailers such as Amazon.com. Other states are now trying to follow suit so that they can impose a sales tax on revenue driven through local affiliate websites.
Enough of the differences ... here are some striking similarities .
1) Quality and quantity of links an issue
There is universal frustration among affiliates about the quality of links from merchants which is the biggest reason why affiliates don't promote a merchant after signing up.
Poor conversion rates is the obvious cause of merchants being dropped and publishers complain that many merchants need to sort out their websites and their proposition if they want to sell anything.
2) Concern that the 'last click wins' model is not sustainable
The last-click-wins reward model is generally the standard way of allocating credit for affiliate sales or sign-ups. Some believe performance marketing is about the last click by definition. In both the UK and US, only around a third of respondents (36%) believe the last click should always win. Many affiliates believe that the latest technology could enable a fairer allocation of commissions.
3) Affiliates want more communication from merchants
The majority of both US (64%) and UK affiliates (70%) have 'limited communication', 'indirect communication through the network' or 'no communication with their merchants'. Both UK and US affiliates want to be kept better informed and to build better lines of communication.
In the US, affiliates are more vocal about getting better incentives and rewards from merchants. Perhaps the Brits are too polite to ask ...
4) Publishers want transparency from networks and merchants
Affiliates around the world are united by a desire for networks and merchants to be transparent about what is happening, not least regarding the commissions they may or may not be owed.
5) An upbeat mentality even in the midst of the mother of all recessions
Affiliates in US and UK are more likely to be positive than negative about the recession, and more likely to see it as an opportunity rather than a threat.
You can read more here ...
Econsultancy / MediaTrust US Affiliate Census
Econsultancy / Affiliate Window UK Affiliate Census
