Affiliate marketing and lead-generation market hits £1bn with a 14:1 ROI, says IAB

UK advertisers spent £1bn on affiliate marketing and lead-generation activities in 2013, according to research commissioned by the Internet Advertising Bureau.

Online shopping: UK consumers made150 million purchases via affiliate websites in 2013
Online shopping: UK consumers made150 million purchases via affiliate websites in 2013

The PricewaterhouseCoopers’ online performance marketing study on affiliate marketing and lead generation, found the market increased 15% year on year and generated £14bn in sales – a return of £14 for every £1 spent.

The £14bn in sales primarily came through the most common forms of online performance marketing (OPM), which are price-comparison, voucher, cashback, loyalty and product-review websites.

Research claims that in 2013, UK consumers made a total of 150 million purchases via affiliate websites totalling £13 billion and a further £1 billion in sales was generated from people submitting contact forms.

Dan Bunyan, a manager at PwC, said: "OPM generated around four billion clicks in 2013, the equivalent of 10 million per day or 120 per second, about 5% of which resulted in a transaction. This high conversion rate and the high return on investment explains the significant increase in advertisers (to 4,000) and publishers (to 12,000) now using OPM.

"It isn’t just the big publishers, or ‘super-affiliates’, who generate revenue through OPM. It’s opened up a new and growing industry among the ‘long tail’, where individuals and small publishers with specialist knowledge of a particular area can produce websites and then automatically generate advertising revenue."

Return on investment is so high because OPM sites such as Comparethemarket, TripAdvisor, Vouchercodes Nectar and Quidco only charge advertisers for the ad if it causes a defined action.

The defined actions include making a purchase (affiliate marketing) or submitting contact details (lead generation). 

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1 Job description: Digital marketing executive

Digital marketing executives oversee the online marketing strategy for their organisation. They plan and execute digital (including email) marketing campaigns and design, maintain and supply content for the organisation's website(s).