Affiliate marketing spend increases 15.1%, topping £550 million

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For the first time, IAB UK separated Affiliate Marketing from its annual Adspend report to get a more accurate and granular representation of the affiliate marketing model performance. Affiliate marketing, which differs from tradition online display advertising, is when a website owner or publisher displays an ad on its site for a brand or merchant and payment is triggered based on the ad's performance. 

The full year 2017 study focuses solely on affiliate networks, software as a service (SaaS) platforms and major in-house affiliate programmes, and provides additional insight around sector performance, affiliate performance, models used and mobile growth. 

Key highlights from the study show: 

• Affiliate marketing spend grew 15.1% from £482 million to £554 million in 2017

• In 2017, Affiliate Marketing generated £8.9 billion sales, up 9.2% year-on-year

• Affiliate spend on smartphone grew 49% year-on-year 

• Retail holds the largest share of affiliate revenue, at 43%

"This year, we re-scoped the study to focus on areas of the market where there is greater visibility and availability of accurate data," said Dan Bunyan, Director at PwC. "The new study gives us better insight into the affiliate marketing sector and we can see much more clearly how the core affiliate marketing model is growing year-on-year across a broad range of sectors and participants." 

From traditional publishers to bloggers and influencers, as well as loyalty, voucher code and price comparison sites, affiliate marketing enables retailers to collaborate with some of the most popular consumer platforms.

"A more than 15% growth year-on-year demonstrates what we've all been feeling - that the affiliate model is in great health," says Helen Southgate, Chair of the IAB UK's Performance Marketing Advisory Group and MD of Acceleration partners. "As the market matures, we are seeing more innovation, transparency, broader reach and brands increasing their spend in the sector whilst maintaining ROI. Affiliate Marketing is still the one true performance model and I expect this growth to continue into 2018 and beyond."

Kevin Edwards, Global Client Strategy Director at Awin Global, comments on retail's share: "the affiliate channel is a key driver of growth for e-commerce retailers and aligns well with some of the largest retail focused publishers. At Awin, we've definitely seen the rapid rise of fast-fashion brands who are driving a great deal of interest in the channel, buoyed by the interest in tapping into blogger and social media content that aligns perfectly with their target audiences."

"The 15.1% growth outperforms the 2017 adspend growth as presented by the IAB in April" added Southgate. "The affiliate channel is in good shape and benefiting from its transparency and pure performance model which can be applied to a diverse range of marketing activity."  

On 25 April, the IAB UK published its full year 2017 Adspend report, which showed total digital ad spend increased 14.3% to £11.55 billion.