IAB UK Affiliates and Partnership Trends: Audience insights during the coronavirus pandemic

The current economic crisis is requiring many brands and advertisers to pivot quickly in reaction to unprecedented levels of change in our society. These changes have affected every facet of our lives, not least our buying habits. Understanding the new relationships consumers have regarding these buying habits is the first step in achieving our primary goal as marketers - connecting brands with people - in such an unusual time.

To shed some light on the issue, we at the IAB have created a series of insight pieces with the aim of informing our members of how consumer behaviour is changing in the wake of the coronavirus pandemic. This week we will be sharing insights from our members in the affiliate marketing sector; an area that boasts almost unparalleled visibility over the online retail landscape during this crisis.

Firstly, it is worth highlighting the general trends we can observe across online retail. In insights shared by Impact, we can see four key trends across the space:

1. Revenue is increasing due to a larger volume of shoppers being found online rather than larger basket values

2. Consumers are seeking out online alternatives for goods they would usually buy in-store

3. Consumers are spending more on self-care verticals during the lockdown

4. Certain verticals are seeing higher conversion rates as buyer intent rises

Taking a deeper look at this, we can identify the verticals with the largest change in the past few months. In data shared by Awin, the worst affected markets in online retail was, unsurprisingly, travel. Travel insurance, while peaking briefly after the WHO declared coronavirus a pandemic, has dropped off to single digit buys per day on Awin’s network. Airlines and local holidays are similarly down, with a 98% drop in interest and the majority of advertisers pulling activity across the board in this area.

However, Awin’s report identifies huge growth in both the home entertainment and fitness verticals as people adjust to a home-working economy. In home entertainment, Awin have observed that digital TV and video-on-demand (VOD) buys are up 174% versus the same day in 2019, and online gaming is up a huge 237% year-on-year. In fitness, sports equipment sales are up 11% month-on-month, with general fitness product sales up 53% and basket values up 42% as people attempt to recreate gym-style workouts from home. Awin has also seen a 371% increase in wine, spirit, and tobacco sales, perhaps an indication that people are seeking alternative methods of escapism as pubs, restaurants and bars remain closed.

In insights shared by Acceleration Partners, a clear breakdown of growth verticals is clear as people started to adjust to lockdown life. Looking at the highest growth areas from March to April, education tops the list, with an increase in online revenue of 123%. This is closely followed by health and wellness (+63%) and business solutions (+52%). This gives weight to the idea that, as the initial shock of the lockdown passed, people increasingly adapted by ensuring their familial and professional lives were able to continue with as much normality as possible.

Looking at the impact on other sectors, Optimise have shared some insights into how the financial and insurance markets have been affected. Both home and life insurance increased above year-on-year performance, by 23% and 143% respectively. Additionally, energy switching saw a 53% uplift in week three of the lockdown as consumers took stock of rising premiums and a home that was now used for both work and play.

Taking a more specific look at how these changes have affected the outlook for affiliate marketing, we can see a similar pattern of growth across the board. Rakuten Advertising reports that affiliate orders have increased by 36% during the lockdown period. It has also identified the areas with the highest commission growth (%) as jewellery, computers, toys, and education. All are areas that have hugely benefited from bricks and mortar shoppers moving to an online market during the lockdown.

Findings from Acceleration Partners support this growth trend; reporting an 80% increase in content marketing revenues, as well as increases of around 20% across the range of other affiliate segments (sub-affiliates, deal, and mass-media). Impact has also seen increases in commissions across a large variety of verticals, such as home and garden, clothing, telco and utilities, health and beauty, and gifts.

It is also notable that Awin has seen non-mobile traffic to its channels increase from 33% in March 2019 to 42% in March 2020. The team believes that this is down to people spending less time on the go and having more constant access to computers and tablets.

With consumers stuck at home, they are spending more time shopping on their phones and computers than ever, and while they are not necessarily spending more on these goods and services in total, they are now searching online for these items rather than visiting a shop. It is still uncertain how long-term this trend will be, or if consumers will simply revert to their old habits once life returns to some semblance of normality. However, it is clear that there is currently a huge amount of additional value in the online retail world right now.

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