Affiliate Revenue: Still a Publisher’s Best eCommerce Bet? | What’s New in Publishing

This is an excerpt from our free downloadable report, eCommerce in publishing: trends and strategies

In this chapter, we examine the growing importance of e-commerce in publishers’ revenue strategies and the role that COVID-19 has played in accelerating this trend.

An established income formula

For many publishers, affiliate relationships will be their first – and often primary – foray into e-commerce.

As eMarketer explained, this revenue comes from “commissions earned on conversions or clicks they drive to a brand or retailer through affiliate links placed within content on their sites or other channels, such as their social media accounts and email newsletters”.

“This is a monetization model,” observes Shopify, “where an affiliate partner…is rewarded with payment for delivering a specific result to the retailer or advertiser.” “Usually the result is a sale. But some programs may reward you for leads, free trial users, website clicks, or app downloads.

Picture via Shopify

Globally, the affiliate market – which encompasses cashback and rewards sites, as well as publishers and other content creators, social networks and other delivery mechanisms – is worth more than $12 billion per year. In the United States alone, affiliate marketing spending is expected to reach $8.2 billion in 2022, up from $5.4 billion in 2017. Put simply, with numbers like these, it’s of a market too big for publishers to ignore.

The Affiliate Revenue COVID Bump

Prior to the COVID-19 pandemic, a number of publishers – such as BuzzFeed, Condé Nast, Meredith, Hearst and Vox Media were already embracing the potential of e-commerce, and in particular the opportunities to generate affiliate revenue.

However, with the COVID crisis acting as a catalyst for increased online shopping, more and more publishers – and marketers – have embraced this space. The move appeared to pay dividends for some of these companies.

In August 2020, according to Dunia Silan, VP Revenue for Europe, Middle East and Africa at Skimlinks – an affiliate marketing platform – the top 50 UK publishers generated £86 (113.42 $) in average revenue per article, up more than 100% in the last five months.

Image: Examples of content types that can generate affiliate revenue, via Skim Links

They were not alone in this success. Across the pond, New York Magazine’s shopping site The Strategist reported an 85% year-over-year increase in revenue in the second quarter of 2020. Hearst UK saw even bigger numbers, with 322% growth in e-commerce revenue. for the same quarter compared to the same period of the previous year. Jean-Michel Lemieux, former technical director of Shopify tweeted in April 2020 that “our platform now handles Black Friday level traffic every day!”

While these record numbers are the result of a very specific time period, the e-commerce momentum that many publishers are enjoying has continued (albeit at a slower pace). Future plc’s interim results for the six months to the end of March 2021, for example, noted that their e-commerce affiliate revenue had increased by 116% (worth £85.2m) compared to 2020.

Due to longitudinal shifts in consumer habits and the continued growth of spending in this space by marketers and brands, new forays into e-commerce and affiliate income strategies continue to be seen by a wide variety of different editors.

Affiliate approaches in action

The most obvious example of how publishers make money from affiliate revenue can be seen in the rise of referral sites and verticals.

In the UK, The Sun, a British tabloid, now employs five people dedicated to producing Sun Selects, a collection of buying guides and product recommendations, as well as 10-15 freelancers.

At another UK outlet, The Independent, their Indy Best section has continued to grow, in part due to COVID-era shopping habits. The site, which offers product reviews and buying guides, “has doubled the size of the team…to 16 people, including ten full-time editorial roles, during the pandemic,” Press Gazette reported.

“This [affiliate marketing] is a long-term commitment, and that was before the pandemic,” said Independent managing director Christian Broughton. “We are accelerating as quickly as possible to develop this and I don’t foresee this going away.”

Alongside traditional affiliate approaches – such as dedicated review sections and embedding purchase links in specific articles (see, for example, these articles on BuzzFeed highlighting the best white t-shirts, toilet paper and women’s shower curtains) – many publishers are also going online. stores. These digital stores can take a number of different forms, including those focused on generating affiliate sales.

Interior design magazine Dwell is just one publication that has taken this approach. In addition to offering articles, guides to various home projects, and links to contractors, their website also features an online store that offers “a carefully curated selection of products for home, office, travel, and the style of life”. Clicking on an item in Dwell’s store takes you to the third-party vendor where you can complete your sale.

Screenshot: Dwell’s online shopNovember 6, 2021

And after? How Affiliate Relationships Are Changing

The future of affiliate revenue offers something mixed for publishers.

On the one hand, you have an increasing number of players – like Vice – moving into this space. Others, like Gannett, have expanded their operations, while The New York Times’ decision to put its review website, Wirecutter, behind a paywall (and offer a standalone subscription for it) reflects the confidence they have in this product.

Picture via Twitter

Meanwhile, the emergence of technologies and affiliate networks like those offered by companies such as Tipser, Skimlinks, Sovrn and Rakuten, can make much of the technical work difficult for publishers – offering CMS and other digital solutions to support e-commerce activity – as well as act as an intermediary between publishers and merchants.

At the same time, publishers should also be wary of putting all their eggs in one (online) basket. The decision of major retail partners like Amazon and Walmart to reduce the commission they pay to their affiliate partners can impact a publisher’s bottom line and the effectiveness of their affiliate strategy.

Publishers should also be aware that online habits are changing and there are many ways to generate e-commerce revenue. As we’ll see, affiliate revenue isn’t the only game in town.

Outlets like BuzzFeed, for example, are experimenting with direct-to-consumer options, allowing audiences to buy directly from their site — or social feeds — without having to click through to a third party.

Image: Promotional illustration from the BuzzFeed Shopping website

Additionally, as online shopping on social media becomes more commonplace (these platforms already influence many purchasing decisions), publishers will need to refine their affiliate strategies taking into account marketing opportunities. affiliation and e-commerce through their social channels too.

All of this to say, as Web Publisher PRO puts it, “while affiliate marketing is not a silver bullet, it can be an important part of a publisher’s broader approach to website monetization. “.

In particular, they note, “digital publishers see the greatest gains when they combine real-world events (like the pandemic or upcoming seasonal weather events) with online retail.”

This is especially true around major shopping periods, such as Black Friday, Cyber ​​Monday and Singles Day, hotspots that are already major revenue peaks for a number of publishers.

“Over the past three years, Meredith has experienced over 100% year-over-year growth in affiliate revenue. [thanks to commerce content]recently revealed Chloe Reznikov, Managing Director of Content and Business Strategy at Meredith Corporation. “During the 2020 holiday season, Meredith generated $35 million in Prime Day sales and $36 million in Black Friday/Cyber ​​Monday sales through our shopping content program.”

Picture: Screenshot via, part of Meredith’s suite of titles

What we see, therefore, is an increasingly busy affiliate space, with an ever-increasing number of publishers crowding into this space.

Increased competition from other media companies, the emergence of social commerce and the ability to buy on social media, coupled with the need to avoid over-reliance on a single partner or platform, are all strategic considerations that publishers need to be aware of.

However, it is also a growing consumer market. And audiences are increasingly used to seeing affiliate links next to the content they consume. As a result, due to the business and content opportunities that affiliate revenue can generate, it’s clear that affiliate revenue will continue to be a part of publishers’ e-commerce strategies for some time to come.

This is an excerpt from our free downloadable report, eCommerce in publishing: trends and strategies