Affiliate marketing is growing and changing faster than ever before. Technology is getting more affordable and efficient, advertising dollars are expanding quickly to new devices, and big brands are launching their own major publisher relationships. Affiliate networks are improving their services and giving more transparency to advertisers, and competition is rapidly growing. Below are some predictions for affiliate marketing in 2012.
1. Brands Pulling More In-House Talent
Companies are beginning to hire in-house affiliate experts to shape and manage distribution of their campaigns. This is already a trend for online acquisition channels like SEO, PPC, and Display, but I predict you will see experienced affiliate marketers and managers in every major marketing team in the country by the end of this year. Does this mean advertisers will stop working directly with networks? Certainly not. Yes it is important for brands to build long lasting partnerships with main stream publishers, but they also need legitimate affiliate networks to fill the funnel with traffic they can’t find on their own. However, they will need someone to manage all of those affiliate network relationships and most likely do their own tracking, reporting and analysis of performance.
2. Mobile Advertising Gets Smart
So many people have already said that 2011 was the year of mobile, and I will certainly agree that last year we certainly saw a substantial rise in mobile advertising spend. In 2012 we will see competition increase and advertisers get smarter with their budgets. We will see more accountability for Ad Networks and new forms of user engagement. Connecting in-app to mobile web, in-app to in-app, and device to device will be the rage of the new year. Large game developers and major mobile publishers will lead the way. I predict this will lead an affiliate marketer gold rush. So many affiliates have been building their mobile traffic for over a decade, and in 2012 there will be more ways to effectively monetize mobile traffic, driving the cost per user through the roof. If you haven’t checked it out previously, Mobile App Tracking is our leap into supporting mobile advertising.
3. Need for Attribution Grows
As a result of more internal affiliate marketing talent, proving the value of affiliate traffic will become increasingly important for marketers everywhere. If affiliate marketing can really do what it says it can do, then why wouldn’t advertisers pay all day long for new customers. The crux falls on attributing credit to the proper marketing channels and to the most influential affiliates. If you work with major brands already, you know that proving your value can be a full time job. Tracking and reporting technologies must continue to improve or be left behind.
4. Do Not Track Grows Quieter
But how will we attribute credit for conversions to the right marketing channels if our ability to track users deteriorates? In 2011, the proposals by the FTC to enact various Do-Not-Track legislation got online advertisers a little worried. The greatest thing about affiliate marketing specifically is that we can track users and show that purchase decisions were influenced by affiliates. How will we progress in attribution technologies if browsers practices and legislation prevent us from tracking. My prediction is that Do-Not-Track will be a muted subject in 2012. We still have so much to learn about monetizing the web, and I believe the FTC intended to spook online advertisers into self regulating and checking their intentions.
5. Privacy Gets Ugly
Maybe 2012 is slightly premature, but I think the conversation on privacy and protecting personally identifiable information will grow exponentially. The mobile web is a completely wild place of little regulation but incredible security risk. In 2012 you will see at least one Internet giant under full scale attack by a government agency on the issue of user privacy. I believe SaaS companies will start reevaluating their business models and major brands will start looking for technologies to build a future with compliance and security.
6. Affiliate Fraud Gets Worse… and Better
I have no doubt that affiliate fraud will grow on a global scale in 2012 as more humans have access to the Internet (as will all general Internet fraud). However, I also believe that we will build more transparency into the affiliate marketing industry than ever before based on the demands of advertisers. As advertisers increase their in-house talent and develop more direct publisher relationships, they will absolutely require direct information about any traffic directed toward their campaigns. Some of this transparency may be provided by technology, but on a more basic level affiliate networks, media buyers, and affiliates will open the kimono a little more in order to get the attention and payouts of the best campaigns and offers, raising the bar on acceptable traffic for advertisers.
7. Affiliate Nexus Tax Rages On
I do not believe we will have any conclusions on Nexus Tax rulings in 2012 at a federal level. There are an unbelievable number of interested parties, and I simply do not believe Congress is capable of passing any effective or enforceable legislation, especially during an election year. The greatest hurdles in nexus tax are the generation gap of law makers and their lack of understanding in the online economy. However, this does not mean we should stay uninformed. Follow along with the PMA as they provide accurate information about the nexus battle, and I challenge you to make it your New Year’s resolution to support the PMA.