Last year a presentation was delivered by Awin on the state of international affiliate marketing as a complimentary commentary on the Awin global report. One of the most interesting aspects of that presentation was how the market in which a publisher operates can have a big effect on both earning potential and payment times.
It’s relatively uncommon for there to be a completely global view on affiliate marketing and the reams of data made available on each territory proved to be invaluable for any publisher looking at potential international efforts. It is clear that there are a number of factors that can affect how easy it is to expand internationally or start a new affiliate proposition:
- Marketable populous (the size of the online market)
- Conversion rates
- Commission rates
- Approval percentages
- Mix of incentive/non-incentive publishers
- Import tendencies (does the market prefer to buy internationally or locally)
- Payment times
Understanding the variances of each international market in reference to these factors will ensure that as a publisher you can pick the best market to focus your efforts on. Collectively, it can feel like an overwhelming prospect to try and understand all of these points and so it was more than helpful when the data was summarised into a graph which compares the potential earnings from 1,000 clicks against the amount of time it takes to get your first network payment:
POTENTIAL EARNINGS FROM 1,000 CLICKS VS PAYMENT TIMES
In the graph above (courtesy of Awin data) there are quite a few notable points to draw your attention to, namely the markets to avoid, the markets to focus on and the overall speed of payment.
Emerging markets such as Brazil, Australia, Italy and most of Eastern Europe are not recommended markets for new publishers starting out or seeking expansion, purely on the basis that conversion rates and commission rates are far too low to make a sustainable business easily. That’s not to say there aren’t exceptions to these comments but unless there is an obvious and specific reason why one of those markets might work for you, then it is best to avoid them.
Looking atthe middle ranging territories; there is cause for further optimism. In particular the United States and Benelux both represent good opportunities and if you can afford to wait for the slow payment times, the U.K. is also worthy of a mention. It is interesting that those regions which have better earning potential tend to also be the most mature markets:
AFFILIATE MARKET MATURITY AROUND THE WORLD
One of the unspoken components of market maturity is the opportunity to launch business models with proven success (in established territories) to markets where competition might not be so prevalent. The likes of Ireland, Australia and Italy have all seen efforts from international publishers seeking to take advantage of this idea.
With all factors under consideration there are undoubtedly two territories which stand head and shoulders above the rest as the obvious investment/expansion opportunities. The hugely efficient DACH market which pays very quickly and has notable earning potential and the Nordics region which also pays exceptionally well albeit at a slower pace. These two markets are remarkably different though; the Nordics is a very content heavy region with large numbers of influencers and content rich publishers. Comparatively the DACH market is more incentive focused and similar to markets like the U.K. and the U.S.
There are some unavoidable components to affiliate marketing that persist in every single market; initial payment times (which are defined as the average amount of time taken for an affiliate to receive their first payment) begin at a rather lofty 3.5 months. This is an absolutely vital point for affiliates to take notice of because it can mean running into cash flow issues if you begin entering a new market with too many overheads or without sufficient funding. For this reason it is likely that the majority of new launches and new expansions in the affiliate market will have to be prepared to run at a loss in their opening few months.
Lastly, it’s important to take note that the opportunity for launching a new affiliate business or expanding an existing one is much more nuanced than the average data points referenced above. Although they offer a nice overview of some general concepts and ideas, it is vital to understand your specific opportunity, your business model and your competition.
Contact us if you’d like to discuss international opportunities
13 March 2019Global Affiliates, Market Maturity, Affiliate Marketing
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