Online retailers havent been the only businesses helped by a lockdown-fuelled boom in online shopping publishers have also benefited.
Figures from the Office for National Statistics show internet sales made up 31% of total retail sales in December 2020, up 10% on the same month the year before. Total online retail sales for 2020 were up 46% on the previous year the largest annual increase since 2008, according to the ONS.
When it comes to spending online, many of us now take to the internet to research the items we want to purchase before parting with our money.
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A survey carried out by Ipsos for Google between November 2019 and January 2020 found that, both in the UK and US, adults searched online before making 88% of in-store purchases. The study also found that just over half of shoppers (51%) research new brands on Google first before buying from them.
This is where publishers come in.
What is affiliate marketing for publishers?
Affiliate marketing, which falls under e-commerce, is any sale being driven by referral to another source, according to affiliate network Awin, which connects brands with publishers.
In news and magazine publishing this typically takes the form of reviews of tested products, recommendations (e.g. best cheap headphones 2021) and product mentions in articles (e.g. Mail Onlines Femail Fashion Finder) that can be monetised through affiliate links.
These are hyperlinks within articles that take a reader through to an online retailer selling the product they have just been reading about. If they go on to buy it, the publication is paid a fee.
Publications can have agreements with a number of online retailers some of which run their own affiliate programmes, others of which are part of an affiliate network at the same time. The upshot is more choice for the reader/consumer.
Affiliate marketing is focused solely on driving sales, rather than the audience metrics that define success in digital marketing. Other examples outside of media publishing include 100% cashback websites, such as Quidco, price comparison and voucher sites. These sites have been behind the growth of affiliate marketing over the past 15 years.
Mail Online and Metro, both part of DMGT, offer discount codes online, working in partnership with affiliate network Global Savings Group. These codes offer incentives for consumers who are at the point of purchase.
But while news and magazine publishers have dipped their toes in the water of affiliate marketing over the past decade, it hasnt quite been the right time for most of them, according to Kevin Edwards, global strategy director at Awin, which counts BT and Asos UK among its clients.
Edwards said publishers hadnt invested enough in affiliate marketing to justify the returns, but as they have sought to restructure their digital teams internally and align their editorial teams a lot more with their commercial teams, that investment means they are far more engaged now and affiliate is actually becoming a viable revenue stream for them.
Add to that the pandemics impact on events revenues and other sources of income that relied on real-world interactions and publishers have been looking to diversify their sources of income, said Edwards.[Read more: The future of events: Hybrid is the buzzword as Covid costs UK publishers 2bn]
They also see it as a good way of driving subscriptions, because they’re obviously driving traffic through to their site and then they can sell additional services… so theyre seeing it not only as a direct revenue, but also an indirect revenue-generating stream.”
Traditional publishers make up about 10% of Awins total revenues.
Edwards said: One thing that we have also noticed is [the likes of] Hearst, Dennis all of these companies are investing more in affiliate. Typically their journey started with companies like Amazon.
Perhaps unsurprisingly the biggest player in the affiliate marketing space is the internets largest retailer, with the tech giant running its own Amazon Associates Program through which it says publishers can earn up to 12% in commission income on qualifying purchases.
Bruce Clayton, director at affiliate marketing agency Optimus-pm, said publisher recommendations resulted in valuable traffic for brands and exposure beyond codes and cashback sites. Theyre not the biggest sources of traffic, he said of publishers, but they are a good quality source.
Brands are quite picky about who they’re going to work with [News publishers] are seen as high-quality places to have an affiliate link. It’s an opportunity for both sides to associate themselves with good brands.
Titles like Wired and the Telegraph have invested more heavily in affiliate marketing in the past few years. Wired declared it an important revenue stream in 2017 and quadrupled its output. The same year the Telegraph hired a new head of affiliates poached from an affiliate network.
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Indy Best: ‘You need expertise in this game’
The Independent is another title that has seen the benefit of affiliate marketing and is growing its output. It has doubled the size of the team on Indy Best, its reviews and recommendations section, to 16 people, including ten full-time editorial roles, during the pandemic.
Indy Best started life in print as the Independents 10 Best and 50 best series of recommendations in the 1990s before moving to digital when the paper decided to pull the page in 2012/13. The Independent closed its print publications for good in 2016.
Today it’s a really important revenue stream for us and a really important brand of its own, Independent managing director Christian Broughton said of Indy Best. I love it when I see the brand featured on people’s advertising that it’s endorsed by Indy Best, that means a lot.”
Broughton, who was editor of the Independent until October last year, said maintaining trust and authority was vital for affiliate marketing to work. Indy Best has experts on retainer, said Broughton. You need expertise in this game. You can’t just do it from generalists.
He added: You have to make sure that your editorial endorsement and your reviewing is pure and absolutely independent.
“Then it’s the commercial team’s job to set up enough relationships with retailers that there’ll be enough within the whole channel of Indy Best that will make the whole enterprise very lucrative for us.[Read more: After recovering from coronavirus hit, Independent eyes global expansion: Interview with CEO Zach Leonard]
Affiliate marketing is now a multi-million pound business for the Independent. Broughton said affiliate revenue is really meaningful and is set to increase by 70% on last year, helped by the rise in online shopping during lockdown.
Audience figures for Indy Best content has also more than doubled. The core Indy Best site receives 5m visitors a month. The Independents Facebook reach for consumer reviews is up 300% year-on-year and its Instagram reach is up 2,600%.
Broughton said Indy Best provides a trusted voice on products for readers/consumers and gives them the confidence to buy at a time when they really need it, but is also incredibly useful for retailers, whose business might also be suffering, offering them an entirely unbiased, absolutely rigorous endorsement.
Affiliate marketing is no flash in the pan at The Independent, said Broughton. This is a long-term commitment, and was before the pandemic,” he said. “We are accelerating as fast as we can to grow this and I don’t anticipate it’s going away.
For Broughton, Indy Best makes up part of the Independents wider e-commerce strategy.
From this week the newly launched Independent TV, a dedicated online channel for video, will run commercial content, such as video reviews and unboxings where a product is unwrapped on video to show viewers what theyre getting which has become a Youtube staple.
We need to break out from just being affiliate into a more rounded version of e-commerce,” Broughton told Press Gazette. “That’s the goal really: to play a much more active role in our readers buying things online.
It may be that the brand cuts out the middleman and starts selling direct, something The Guardian does already to a limited extent. Buzzfeed, which formerly relied on sponsored content, moved into e-commerce last year with the launch of a sex toy. But the failed BBC retail venture Beeb.com provides a cautionary tale.
Future: ‘Success commercially also has to mean success editorially’
Future is another publisher that has, perhaps more than most, seen the value in affiliate marketing for its brands and invested accordingly.
The publisher of more than 160 specialist and lifestyle magazines including Tech Radar, What Hi-Fi?, Cycling Weekly, Golf Monthly, Marie Claire, PC Gamer and Woman and Home has been running affiliate marketing for about six years, over which time it has grown considerably, said Matthew Smith, Future’s director of e-commerce.
Smith told Press Gazette that affiliate marketing is a very significant part” of Future’s business and one of its core strategies, adding: E-commerce isn’t an add-on, it’s a main thing that we do.
Last year (to end of September), revenue from affiliate marketing reached 79m, making up about 23% of total group revenue. The number of transactions made via affiliate links on Future websites in 2020 reached 13.6m, up from 9.8m in 2019 and 3.2m in 2018.
Future invested in its own proprietary software to run affiliate links, which it calls Hawk (building in-house is something the group likes to do its CMS and ad systems are also custom made). Hawk uses product feeds and APIs from 4,500 retailers to serve the best prices to readers in real-time.
The software has proven so successful in bumping up conversion and click-through rates that a first move for Future is to add Hawk it to newly acquired sites it bought TI Media (formerly Time Inc UK) last year.
Around Hawk a well-defined content strategy has been built out across the group, with Future continuing to diversify across the verticals covered by its brands, starting with Tech Radar. Now up to 40 of its titles run affiliate links and generate significant affiliate revenue every year, said Smith.
Affiliate content broadly falls into three categories at Future: best (e.g. best laptops in 2021), reviews and deals. The latter is targeted at consumers who are ready to buy and so, while reaching a smaller audience, it typically results in higher yield because a higher proportion of those readers will go on to buy, earning Future a fee.
A team of up to 50 people works across Futures affiliate marketing strategy, with a core team of about 20 editorial staff, known as content developers, who share best practice with journalists across the group and take care of high yield content.
Smith said the audience, editorial and commercial teams need to be working in tandem for the best results. But rather than being led by the commercial side, the emphasis is on having editors understand how to drive sales from their content, said Smith.
He gave the example of a “best laptops” article which might drive 20,000 sales a month, but with editorial changes, such as offering “better recommendations and a different suite of products”, and even the way the article is written and structured, could climb to 30,000.
“That’s commercially beneficial for us, but actually that’s beneficial for our audience as well because we’re helping more of them actually get products they want to buy,” he said.
So success commercially also has to mean success editorially.
Online affiliate marketing is regulated by the Advertising Standards Agency in the UK. Under the ASA’s non-broadcast code, affiliate marketing must be “obviously identifiable as such”.
Publishers typically inform readers through notices alongside affiliate content that they may earn revenue if links to products are clicked. Quality publishers are keen to stress that their reviews and recommendations are unbiased and independent nonetheless.
Said Smith: If you don’t have that trust, or if you scrape Amazon reviews, or you have light content, then users aren’t going to trust you and they’re probably not going to buy anything, and Google’s going to find out pretty quickly and you’ll be penalised.
Black Friday sales[Read more: How news publishers should use Black Friday to drive paid subscriptions (comment)]
Black Friday and Cyber Monday are a boom time for affiliate marketing, when consumers often make bigger purchases and do their research online before buying, or are simply looking for the best deals. This US import hit a peak last year, with the pandemic boosting online sales.
Affiliate network Global Savings Group, which works with Mail Online in the UK and other leading publications in Europe, such as Le Monde and El Pais, reported a gross merchandise value of over 110m. On average consumers bought 94.81 worth of goods. Throughout Black Friday week the company facilitated over 1.1m transactions, it said.
Futures womens lifestyle portfolio which it acquired from TI Media achieved an average of 5,724% year-on-year increase in clicks to affiliate sites in the UK during Black Friday. Marie Claire saw a 92% year-on-year increase in users and Woman and Home generated 149,000 page views, with more than 4,000 clicks to affiliate brand sites per day during the period compared to an average of over 1,000.
In the 11 days around Black Friday, Futures tech and gaming titles drove about 76m of sales for retailers, equal to 1.4m sales, or 130,000 sales a day.
Smith said Black Friday is Futures biggest week of the year for affiliate sales, which he said was probably true for everyone in the industry. But rather than just focus on Black Friday and Cyber Monday, Futures strategy covers October to Christmas a period it calls peak trading.
Yes Black Friday is an amazing spike, and we do incredibly well, but actually then into December we continue that momentum and still drive a lot of revenue, said Smith.
It feels to me that a lot of publishers do e-commerce on Black Friday then forget about it for the rest of the year, while for us… it’s very much a year-long, constant operation. It’s a big business at Future.
To sustain its affiliate revenues year-round, Future relies on “evergreen” content, which is not only high-margin but predictable too. A lot of our content almost drives the exact same amount of transactions today as it did yesterday”, said Smith.
We know if we apply the same growth metrics and we apply a strategy, we can predict with quite good accuracy where we think our revenue is going to be and where we think our growth is going to be. There’s a core foundation of evergreen content that drives that.
Future of affiliate marketing
The pandemic has accelerated the trend of decaying high streets and booming online retail giants. Boohoo, the online fashion retailer, this month bought the online businesses of clothes stores Debenhams, Dorothy Perkins, Burton and Wallis, but none of their physical shops.
It’s a sign that online shopping is not only growing, but is dominating the retail industry. It is an industry that began with Amazon, whose founder Jeff Bezos started by selling books online nearly 30 years ago. Amazon’s net sales for 2020 were up 38% year-on-year to $386.1bn.
The overall e-commerce ecosystem is growing and is forecast to continue growing significantly and the amount of shopping online is going to continue to grow significantly, said Future’s Matthew Smith.
Obviously that plays into our favour, but beyond that general market growth there’s huge growth ambitions for e-commerce in general at Future, especially with the new verticals that we’re acquiring
“It’s a massive priority for the future.