Why the affiliate channel presents the perfect landing for big tech fallout
A lack of control is causing marketers to diversify their spend away from big tech. Luckily, there are parallels between the current challenges and affiliate marketing’s strengths.
Awin’s recent study with Forrester reveals a number of telling findings about the current views of senior marketers. Nestled alongside insights on objectives, the effectiveness of individual channels, and budget allocation, one in particular stood out.
Despite a rise to dominance likened by analysts to defying gravity, big tech appears to be facing some very real challenges. In the study, 44% of marketers across Europe and the US cited diversifying their ad spend away from big tech platforms as a top objective for this year. Of that group, 77% had put plans in motion by allocating budget to make this happen.
It’s a full reversal from the scene that emerged post-pandemic. Only three years ago, WARC reported that Alphabet, Meta, and Amazon accounted for almost half of all advertising spend (46%), up from 34% in 2019. That’s without considering the budget dedicated to newer big -tech players like TikTok, whose US ad revenue is tipped to reach $8.7 billion (£6.9bn) in 2024.
Three years later, fears over an even bigger monopoly appear to have quelled. Rather than pushing further forward, marketers appear to be back-tracking on their investment.
Why is big tech faltering?
There could be a number of plausible theories guiding the sudden shift in momentum. Last year, WARC predicted a “reckoning for big tech” platforms due to changing market dynamics and industry concerns over their dominance. Its 2023 Marketers Toolkit revealed a decrease in investment on Facebook for the first time in six years, indicating a reassessment of relationships.
Big tech’s long-standing issues with transparency have produced numerous headlines, such as Facebook overestimating its audience numbers, and claims that up to 75% of YouTube in-stream ads served over the last three years were never seen.
To get to the bottom of things, Awin and Forrester asked marketers to list their biggest challenges when working with big tech. These were accompanied by statements, which added further context to the issues at hand. See if you can spot a theme emerging.
- Strategic guidance (68%): Generic advice or automated recommendations don’t cater to specific business needs.
- Insufficient reporting (68%): When reports are provided, they aren’t detailed insights or are too generic to make informed decisions.
- Ability to forecast results (67%): It’s difficult to accurately forecast results when launching campaigns on big tech platforms.
- Unresponsive customer support (64%): Delays or generic responses are common when seeking help for campaign issues.
- Inflexible pricing models (64%): There is limited ability to negotiate or adjust ad costs based on campaign needs.
Limited guidance, insufficient reporting, the inability to forecast accurately, unresponsive support, and inflexible pricing. The common thread running through all five of these issues is a lack of control.
Ultimately, today’s marketers don’t feel they’re in charge of their own destiny when it comes to advertising on enormous global platforms.
A relatively high agreeance on such an array of different challenges presents little in the way of a quick fix for big tech. However, it should be music to the ears of affiliate marketers, who can go down the same list and check off their inherent qualities, one by one.
A more malleable channel
If there’s one thing that summarises the appeal of affiliate marketing in the modern age, it’s control. Marketers can dictate precisely who they work with and how they’re promoted. They enlist partners to support clearly defined goals and only pay on results. Whether they’re driving sales (CPA), leads (CPL), impressions (CPM), clicks (CPC), or a mix of multiple outcomes, there’s a commercial model to support their objectives.
Are marketers aware of the extent to which affiliates can meet their current demands? When those responding to the Awin and Forrester study were asked to name the unique strengths of the affiliate channel, it seems many had these attributes in mind:
- 28% said the affiliate channel provides clear incremental value
- 27% cited the simplicity of management as one of its key qualities
- 26% said it is a transparent channel that can be clearly tied to sales
- 25% celebrated being able to control the specific outcomes they need
Looking at the full list, there is only a 4% difference between the top 10 identified strengths of affiliate marketing, from being a reliable source of revenue and transparent channel to being one that is highly flexible but also incredibly simple to manage. I’d put this down to affiliate meaning different things to different businesses because it can answer their individual needs.
Affiliate marketing’s solid foundation is made even more appealing by the dizzying choice of partners that make it possible to reach audiences everywhere. The Awin and Forrester study validates this sentiment, with 28% of marketers citing the availability of new, innovative partners as a strength of affiliate marketing compared to other channels.
Over one million affiliates operate on the Awin platform alone, including content creators, influencers, price comparison sites, news partners, loyalty platforms, and more. These partners create a channel that can be shaped to a marketer’s requirements while maintaining a reliably healthy ROI of £14 for every £1 invested.
Using ad spend in the US for guidance, roughly two of every three digital ad dollars go to the big -tech platforms. Marketers should now consider how that final dollar can be invested in a way that truly aligns with their goals and requirements. For me, there is an incredible exciting proposition in the affiliate channel.
Interested in learning more about Awin's recent study with Forrester?
Get your free copy of the Awin and Forrester report to see how senior marketers are leveraging the affiliate channel to achieve their goals.