Survey A4U & IAB UK

1. IAB Affiliate Advertiser Survey
In association with A4U
October 2012

2. Methodology
Objective: To size the growth of advertising spend on affiliate
marketing channel, map trends, and identify sector
hotspots and opportunities
Sample: Based on 115 advertiser & merchant companies.
Methodology: Online survey, hosted on Survey Gismo
Survey: 5-10 minute survey live during September –
October 2012

3. Quick summary
• 100% of advertisers survey expect their online revenues to grow in 2013, with 44%
estimating revenue increases of between 11-25%
• Affiliate marketing spend share is increasing and the survey show a 45% uplift in the
number of advertisers spending more than 31% of their online marketing budgets in the
affiliate channel
• More than a quarter of the advertisers surveyed (28%) are running seasoned affiliate
programmes that are 6 or more years old
• The channel continues to grow rapidly: advertisers with new affiliate programmes set up
during the last year, accounted for 23% of respondents.
• Over half of the respondents have annual online revenues of over £10 million
• Over half of the advertisers said that their monthly affiliate commission payments rose in
the last year
• 72% expect affiliate commission payments to rise in the next 12 months
• 61% are planning to increase their affiliate marketing spend during the next 12 months
• 49% of principle revenues are from cashback and vouchercode affiliates
Source: IAB A4U Affiliate Marketing Survey, October 2012

4. Market sectors surveyed
Qn: What market sector do you operate in?
32%
Retail: Other*
Food 22%
Cosmetics/toiletries
Home & garden
14%
10% 10%
Fashion / clothing 4%
3% 3% 2%
* Retail: Other includes: Other includes: Business and Industrial,
health, jewellery, software, mult Utilities, Health, Pets,
i-category, music cds
Source: IAB A4U Affiliate Marketing Survey, October 2012

5. Affiliate channel is engaging more brands with high
online revenues: 52% report £10m+ annual t/o
Qn: What is your company’s online turnover per annum?
Up to Over half of the advertisers
500k, 12%
surveyed reported
£10million + annual online
£500k -
£2.5 sales revenues, a strong
million, 13%
indicator that the affiliate
Over £10
million, 52%
channel is attracting high
£2.6 million spending brands
- £5
million, 12%
£5.1 million
- £9.9
million, 13%
Source: IAB A4U Affiliate Marketing Survey, October 2012

6. Affiliate channel‟s growth in 2013 fuelled by increased
marketing investment in affiliate programmes: 72% say
commission payments will continue to increase
Qn: Do you forecast a rise or fall in affiliate commission payments during the next 12 months?
Decrease, 1
2% Expect decreased payments (12%)
Expect increased payments (72%)
Stay the
same, 17%
Increased Improved publisher Other
investment in network Economic Appropriateness Reduced Other
Rise, 72% conditions of product / investment in
affiliate programme
service for affiliate affiliate
channel programme
Expect payments to stay the same (17%)
• Significantly almost three quarters of respondents expect
monthly commission payments to rise during 2013
• 81% of those expecting increased payments (see
Economic conditions Appropriateness of Other
note), say they‟re increasing investment in their affiliate product / service for
affiliate channel
programmes pointing to greater reliability of and confidence
in the channel.
• Only 12% expect commission payments to decrease and
54% of those cite economic conditions for their prediction. NOTE: base size of reasons for rise, fall and
no change inconsistent and so regard charts
as narrative indicators only.
Source: IAB A4U Affiliate Marketing Survey, October 2012

7. Advertisers making monthly commission
payments of over £31K significantly increased
Qn: What is your average monthly affiliate commission payment?
• (Commission payments over £31K show a 21% uplift from 2011 to 2012)
• Advertisers paying out more than £100K per month in payments increased by 16%
19% 34% 41% 22%
15%
19%
25% 100k+
19%
31 - 100k
11 - 30k
0 - 10k
41% 41%
2011 2012
Source: IAB A4U Affiliate Marketing Survey, October 2012

8. Affiliate‟s increased share of marketing investment is
clear indication of the channel‟s strengthening role
within the marketing mix
Qn: What % of your overall online marketing spend is attributed to affiliate marketing?
Programmes investing less than 10% Programmes investing more than
of their marketing budget in the affiliate 31% of their marketing budget in
channel decreased by: the affiliate channel rose by:
18%
Advertisers investing less than 10% of their
45%
Advertisers investing more than 31% of their
marketing budget in the affiliate channel fell marketing budget in the affiliate channel rose
from 51% (2011) to 42% (2012) from 11% (2011) to 16% (2012)
NOTE: Online marketing spend defined as media spend within paid search, online
display, email marketing, lead generation, social media channels and content
Source: IAB A4U Affiliate Marketing Survey, October 2012 marketing.

9. Greater need for marketing ROI continues: increased
marketing investment in affiliate channel predicted
Qn: Are you planning to increase your affiliate spend during the next 12 months?
Don't Almost 2/3 of all
Know, 2 advertisers surveyed said
3%
they would be increasing
their investment in the
affiliate channel in 2013.
No, 16% Yes, 61
%
Source: IAB A4U Affiliate Marketing Survey, October 2012

10. As the affiliate sector matures, it‟s attracting a
significant volume of new advertisers, indicating
recognition of the channel‟s effectiveness
Qn: How long have you been running your affiliate programme? (to the nearest full year)
6
6 or more months, 1
years, 28 2%
% 1 23% of respondents report their affiliate
year, 11% programmes were established within the
last 12 months indicating that the
channel has significant attractions to
marketers
5 2
years, 6% years, 18
4 3 %
years, 13 years, 11 6
% % 6 or more months, 1
years, 28 2%
% 1
58% respondents are running seasoned year, 11%
affiliate programmes, more than 3 years
old. 28% report their programmes are 6
years and older
5 2
years, 6% years, 18
4 3 %
years, 13 years, 11
% %
Source: IAB A4U Affiliate Marketing Survey, October 2012

11. Growing consumer „deal searching‟ trend through cashback
and voucher code sites produce principle revenue streams
for 49% of advertisers surveyed
Qn: Which affiliate type provides your principle revenue?
29%
18% 20%
15%
11%
3% 3% 2%
Advertisers benefiting from growing
consumer trend to „deal-search‟ online.
Source: IAB A4U Affiliate Marketing Survey, October 2012

12. Branded affiliate sites producing reliable
advertiser revenues
Qn: What type of affiliate / publishers do you work with?
Qn: Which affiliate type provides your principle revenue?
100% 35%
Publishers worked with
90%
90% Principle revenue sources
81% 30%
80% 75%
70% 29%
67% 25%
20%
60% 20%
51%
50% 18% 43% 15%
40% 35% 15%
11%
30% 10%
20% 3% 2% 5%
10% 2%
3%
0% 0%
Source: IAB A4U Affiliate Marketing Survey, October 2012

13. Collaborative style emerging as advertisers blend affiliate
programme planning between in-house teams, agencies
and networks
Qn: Thinking about how you plan and manage your affiliate programme, is the main strategy generated:
2012
7%
26% Network
18%
2011 Agency
15%
In House
21% A combination of
64% two or more
50%
Source: IAB A4U Affiliate Marketing Survey, October 2012 Note: In 2011 there was no “A combination of two or more” option

14. Majority still using 1 affiliate network, but
declining, while users of 2/3 networks growing
significantly
Qn: How many affiliate networks do you work with?
59%
52%
26% 2011
21% 2012
11% 13%
10%
7%
1% 1%
0 1 2 3 More than
3
Source: IAB A4U Affiliate Marketing Survey, October 2012

15. For more information
For more information contact:
Clare O‟Brien, Industry Programmes Consultant
clare@iabuk.net
020 7050 6963