Something you may not know: if you’ve ever bought a product linked to by a website (like this one), that site most likely earned a commission on the sale. And that’s thanks to affiliate networks, an increasingly lucrative arm of the internet advertising industry, and the subject of a recent feature by Business of Fashion.
“Heralded as a lifeline for the beleaguered publishing industry,” affiliate links are now being used by everyone from “Buzzfeed to Vogue to CNN as well as by untold numbers of individuals on social media.” And all of those referrals are generating billions of dollars in commissions each year.
According to the most recent estimates, “affiliate marketing generated $4.78 billion in the US alone,” accounting for “7.5 percent of total spending on digital advertising.”
And it’s not just the publishers that are earning; “a vast ecosystem of retail networks, marketers and other service providers,” all take a cut of every sale, as well.
Typically, the publishers get the largest payout, usually around 10 percent — though they can “range as high as 30 percent” — while platforms that “manage affiliate relationships” will take a smaller cut for their services, and if analytic companies are used, they’ll take another piece.
At least, that’s the current divvy. In an attempt to replace disappearing ad revenue, some “media [organizations] are… pushing for higher commissions.” However, “retailers and brands are resistant, seeing affiliate links as a cheaper alternative to an advertising market dominated by Facebook and Google.”
Either way, if you’ve ever clicked and bought based on the recommendation of website, there’s a good chance you “contributed to the internet’s recommendation economy.”
You can read more about it at Business of Fashion.