Affiliate marketing completed changed the face of business when it first hit the scene nearly two decades ago. Back then, companies were just realizing the potential of the Internet. Thanks to the dot-com bubble, affiliate marketing took off!
All of a sudden, ordinary folks were raking in millions of dollars in commissions while businesses were experiencing significant profits. Even today, affiliate marketing remains to be one of the most lucrative opportunities for Internet entrepreneurs. It allows you to monetize your website while working with some of the biggest companies and advertising firms in the world.
Don’t take our word for it!
Here are some of the most impressive affiliate marketing statistics of 2020.
History of Affiliate Marketing
1. The idea was first conceptualized in 1989.
The concept of affiliate marketing may seem obvious today. But in the early days of the Internet, e-commerce was still in its infancy. About four years after the World Wide Web was established, affiliate marketing was developed by William J. Tobin.
Tobin was the founder of PC Flower & Gifts.
2. Early affiliate marketing efforts were done on the Prodigy Network.
Prodigy Network is a real-estate crowdfunding platform. Tobin used the platform to start his affiliate program. He remained on the platform until 1996. PC Flowers & Gifts ultimately earned 6 million dollars on the network.
3. Affiliate marketing began using cookies in 1994.
Cookies, which play an important role in modern affiliate marketing programs, was first developed in 1994. Almost immediately, the technology was used for the affiliate marketing industry.
4. CDNow was one early affiliate marketing success story.
In the age of compact discs, CDNow was one of the biggest online retailers. The company was one of the most notable examples of early affiliate marketing. It had a BuyWeb program, which paid commissions to reviewers.
5. Affiliate marketing saw massive growth in 1996.
Many of the modern affiliate programs we know today were first established in 1996. This includes Amazon Associates, BeFree, and Rakuten, which was known as Linkshare at the time.
6. Major affiliate networks launched in 1998
ClickBank and Commission Junkie were first established in 1998. These larger networks opened up a world of opportunity for publishers, allowing them to work with multiple merchants with one account.
7. The Federal Trade Commission established guidelines for affiliate marketing in 2000.
Before 2000, affiliate marketing was a largely unregulated industry. The United States Federal Trade Commission changed that. The organization published guidelines that created more accountability. The guidelines protect consumers, merchants, and affiliates.
8. Taxes for affiliate marketing were introduced in 2008.
More regulations were put on the affiliate marketing industry with the establishment of the affiliate nexus task. This task is meant to ensure that tax duties are fulfilled when merchants and affiliates conduct business across state lines.
9. Disclosure laws went into effect in 2009.
The biggest game-changer in the industry came in 2009. New laws required publishers to disclose working relationships with companies they promote. Essentially, this means that affiliates have to let their audience know when they’re getting paid to promote a product.
The Success of Affiliate Marketing
10. The affiliate marketing industry is worth over 12 billion dollars.
The affiliate marketing industry is absolutely massive. In 2017 alone, it was worth more than 12 billion dollars globally and shows no sign of slowing down any time soon.
11. Affiliate marketing resulted in 170 million transactions worldwide.
To put into scale how effective this marketing technique is, it led to more than 170 million transactions in 2017. Internet users clicked on affiliate links more than 5 billion times, leading to impressive conversion rates.
12. The United States is the biggest market for affiliates.
Currently, the United States is the most lucrative market to target. Approximately 63.83 percent of affiliates around the world specifically target US consumers. It’s not hard to see why. The United States market contributes about 4.5 billion dollars to the industry’s value.
13. Most brands take advantage of affiliate marketing in some way.
Affiliate marketing is the perfect form of advertising for brands big and small. It’s entirely performance-based, so companies are only paying commissions for successful leads and sales.
How many companies around the world use affiliate marketing? About 81 percent!
14. Affiliate marketing is as effective as traditional email marketing.
In 2018, affiliate marketing rivaled email marketing in terms of results. This has resulted in a significant shift for merchants and advertisers. Email marketing has always been one of the most effective forms of digital advertising.
The fact that affiliate marketing is generating as much revenue as email marketing is a huge deal. It’s expected that affiliate marketing could overtake email in the coming years.
15. A large majority of publishers use affiliate marketing.
Affiliate marketing is one of the most effective ways to monetize a website. As a result, most publishers take advantage of it in some form. It’s estimated that about 84 percent of publishers adopt this revenue-generating tactic.
16. Most publishers rely on more than one affiliate network.
To diversify income streams, about 94 percent of publishers who utilize affiliate marketing on their sites will enroll with two or more affiliates. This is done to increase revenue and provide more product opportunities.
About 39 percent of publishers use three separate networks while 20 percent use five or more!
17. Affiliate marketing makes up a healthy chunk of digital media advertising revenue.
There are many forms of digital advertising. Affiliate marketing typically accounts for roughly 15 percent of revenue. This figure is only growing.
18. Many companies contribute 15 to 30 percent of sales to affiliate marketing.
On average, about 23 percent of a merchant’s revenue comes directly from affiliate marketing. When it comes to a return on their investment, this figure puts it neck and neck with search engine optimization and pay-per-click advertising.
19. Revenue is steadily growing.
Affiliate marketing spending is expected to reach 6.8 billion dollars.
More and more companies are reserving part of their advertising budgets on affiliate marketing. Spending has increased by about 10.1 year by year. At this rate, spending is expected to reach 6.8 billion dollars by the end of 2020.
20. Affiliate spending in the UK surged in 2016 and 2017.
Most of the spending comes from the US market. However, the United Kingdom is experiencing significant growth as well. Between 2015 and 2016, UK spending rose by about 15.1 percent.
21. Interest in affiliate marketing is growing.
While it’s been around since the early days of the Internet, affiliate marketing has experienced a sudden surge in interest recently. In less than a year during 2018, the number of searches for the term “affiliate marketing” increased by about 44 percent.
22. It’s effective for a wide demographic.
Contrary to popular belief, this marketing technique isn’t just reserved for Millenials and tech-savvy generations. The most popular market demographic is between the ages of 25 and 54. About 31.86 percent goes to consumers between 35 and 44. For the 55 and up demographic, the market share is still respectable at 12 percent.
23. When done right, affiliate marketing isn’t affected by adblockers.
One of the biggest misconceptions about digital advertising is that adblockers can reduce effectiveness. While that’s true to popups and traditional banner ads, affiliate marketing techniques are not affected. The marketing techniques are implemented within the content, making it immune to the effects of the software.
24. Organic visitors are more likely to make a conversion.
For many affiliates, the top priority is to grow traffic and increase sales. Generating more buzz for your site is important, but your regular readers are more likely to make a conversion. Research shows that organic repeat visitors are about 5.66 times more likely to make a conversion compared to those who stumble on your site through a search engine.
25. More than half of web users are likely to buy from sites that are optimized for mobile.
With smartphones being an essential device in 2020, it’s no surprise that consumers gravitate towards sites that are optimized for mobile. About 51 percent of mobile users say that they are likely to make a purchase on sites that are purpose-built with mobile browsing in mind.
26. Most affiliate marketers are men.
Currently, most affiliates are men. The affiliate scene is made up of about 54.23 percent men and 42.97 percent female.
27. Most affiliates are from the United States.
As we saw with an earlier statistic, the American market is the biggest and most lucrative. While global affiliates can target US consumers, most affiliates are located in the United States. About 57.44 percent of affiliates are US-based.
28. Retail reigns supreme in affiliate marketing
Several industries can take advantage of affiliate marketing. This includes companies that deal with finance, travel, and telecom. However, retail companies see the most revenue. About 43 percent of the global affiliate marketing revenue goes to retail companies.
29. Fashion is one of the most popular niches.
Within the retail industry, fashion is the biggest niche. About 18.7 percent of affiliates promote fashion products. The second-most popular niche is sports and outdoor activities. Roughly 14.6 percent of affiliates promote products within that niche.
30. The web hosting industry offers lucrative affiliate programs.
Interestingly enough, the web hosting industry has a lot to offer affiliates. Many hosting providers have successful affiliate programs. For example, Bluehost paid over 5 million dollars to affiliates in 2018.
31. Most affiliates will promote 10 products or less.
Affiliate marketing is a balancing act for publishers. Obviously, the more products you promote, the more chances you have to make a commission. However, going overboard could turn readers off!
Approximately 42.17 percent of affiliates prefer to promote between one and ten products. A smaller group, 23.18 percent, will promote between 11 and 20 products. On the upper end of the scale, you have affiliates who promote over 300 products. That group is small, making up only 7.53 percent of affiliates.
32. It’s an easy form of monetization for publishers.
There are several reasons why website owners choose affiliate marketing over other forms of monetization. According to surveys, 76 percent choose it because it’s the easiest monetization method available. About 45 percent said that they like it because it doesn’t affect the reader’s experience on the site.
33. The relevancy of a product is important for affiliate marketers.
With so many products and affiliate programs to choose from, publishers have a lot of decisions to make. Surveys show that one of the biggest deciding factors for how publishers will go about affiliate marketing is the relevancy of the product. 18.15 percent say it’s the most important factor when choosing a program. The second-most important factor is the reputation of the program.
Affiliate Revenue Statistics
34. Nearly half of affiliates make less than a full-time income.
You hear a lot about those successful affiliates making bank with their blogs. However, the hard truth is that those success stories are not as common as many think.
Roughly 48.36 percent of all affiliates make less than 20,000 dollars a year, which is significantly less than the average income for individuals.
35. The average conversion rate is about 1 percent.
Conversion rates are very low in the industry. The median rate is about 1 percent. To make any significant income, your site has to receive a lot of monthly visitors.
36. A small percentage of affiliates make more than $150,000 a year.
It is possible to earn a good living with affiliate marketing. But, it’s relatively rare. Only about 3.7 percent of affiliates earn more than 150,000 dollars a year.
37. Leading affiliates can earn millions.
Of course, there are major success stories with affiliate marketing. Several top affiliates earn six-figure incomes. One of the most successful affiliates, Jason Stone, earned 7 million dollars in a single year!
The Affiliate Marketing Industry
38. Amazon offers between 1 and 10 percent commissions.
One of the most popular affiliate programs is Amazon Associates. The program is unique because it offers variable commission rates for different products. Rates are calculated based on the interest of the product and its price. For example, easy-to-sell items may have a low commission of 1 percent. Meanwhile, luxury products that cost thousands of dollars usually come with a much higher rate.
39. Amazon provides access to the most merchants.
Speaking of Amazon Associates, the program provides affiliates with products from over 8,000 merchants.
41. Affiliates working with Awin earned nearly three-quarters of a billion dollars in 2018.
ShareASale’s parent company paid affiliates roughly 734 million dollars to affiliates in 2018. That revenue was shared between more than 100,000 affiliates.
42. Affiliate marketing has the power to improve companies.
Affiliate marketing has played a role in the success of many companies. One of the most interesting stories comes from Groupon!
The marketplace company had some traction in its early years. However, it was considered a failure in 2009. After the company started taking advantage of affiliate marketing, things turned around. When the company went public, it had one of the highest IPOs since Google!
As you can see, affiliate marketing is one of the Internet’s biggest success stories. It turned the World Wide Web into the global sales powerhouse that it is today.
Affiliate marketing has a lot to offer to all parties involved. For companies and affiliate programs, it’s a great way to drive sales and increase revenue. For website owners, affiliate marketing is one of the best ways to generate passive income.
There are no guarantees with affiliate marketing. But, it doesn’t hurt to give it a try. If you already have an established site, there’s nothing to lose and a whole lot to gain!