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Growth In Affiliate Marketing Despite Economic Downturn - Offer18

Growth In Affiliate Marketing Despite Economic Downturn


2020 has been a turbulent year for many industries because of the economic downturn caused by the coronavirus epidemic. Just like other times of financial gloom, one of the first industries to take the hit is advertising.

During times of economic chaos, businesses instinctively begin to look for ways to cut costs, and their advertising budget is the first idea that comes to mind. This invariably translates to a drop in sales and low revenue, both of which are bad news for any company.

Thankfully, many companies are beginning to realize that there can be marketing opportunities online, even when things aren’t looking great. According to one report, the total sales amount generated from affiliate marketing in the UK alone jumped from £1.35 billion in 2005 to £2.16 billion in 2006.

The simple fact is that affiliate marketing is a proven and cost-effective form of marketing there is. Most companies that have gone through at least one recession have learned that focusing their marketing budget on channels that have a low cost per acquisition is the most strategic way of maximizing their ad-spend.

A majority of companies lean on affiliate marketing during an economic turn for three key reasons.

Spend is based on results -

Affiliate marketing is considered an effective marketing model because companies only get to spend when there’s a sale. When affiliates sign up with a company, they are given a tracking link through which they are to promote available products. The affiliate then chooses a suitable platform that allows them to promote products with a view of persuading their audience to make a purchase through their link. When that occurs, the affiliate earns a commission based on a previously-agreed rate. Clearly, the affiliate wins, and so does the buyer that purchases their favorite products. The company also benefits since their marketing dollars aren’t spent on actions they hope to occur but for marketing outcomes that happen as desired.

Reduces risks -

In an uncertain economy, companies are careful about they spend their marketing budget because they can’t afford to waste their ad-spend without commensurate results. As a result, they opt for pay-for-performance marketing models like affiliate marketing. In other words, the company spends only when a product is sold, thus minimizing the risks within their marketing channel. Affiliate marketing also supports A/B testing to ensure that marketing promotions align with brand image and support revenue growth while maintaining profitable margin rates.

Measurable incremental growth -

The third reason affiliate marketing is a favorite for companies in a challenging economy is that it helps drive growth while giving a competitive advantage over competitors within the industry. It also encourages affiliates to produce more content, which may help to convert specific targets that may not be seeing ads during this time due to other businesses’ decision to cut their ad spend.

Wrap-Up in the End
Affiliate marketing can be especially helpful to businesses in a troubled economy because it guarantees sales while reducing their marketing budget. It also puts the company in a great position to foster long-lasting relationships without parting with a fortune.

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