2025 affiliate industry predictions: Part 2

[00:00:00] Sam: Hey Rob.

[00:00:07] Rob: Hi Sam.

[00:00:07] Sam: Can we still say Happy New Year or is that far past the point of no return on that one?

[00:00:11] Rob: No, it's, it's long gone now I'm afraid.

[00:00:14] Sam: How are your resolutions coming along? Are those also long gone?

[00:00:17] Rob: So my resolution was to get more sleep [00:00:20] and spend more of 2025 unconscious. Last night my son woke me up at midnight and did not allow me to sleep until 3am, so not very well.

[00:00:28] Sam: Is that more or less sleep than he was letting you get beforehand, is the real question.

[00:00:32] Rob: It's about the same.

[00:00:33] Sam: Okay, well, we're not progressing into even less sleep territory. So we'll give it a thumbs up for now.

[00:00:38] Rob: How about you? Have you touched your toes [00:00:40] yet?

[00:00:40] Sam: I can't touch my toes. Um, I've got three more months though of yoga teacher training.

[00:00:44] Sam: So we'll see how it goes. I have homework and reading and lectures that I have to get through, which I'm currently blowing off to read. A personal book instead. So we'll, we'll see if I, uh, get a ton, but I've still got some time.

[00:00:58] Rob: Well, my toes are crossed for you. [00:01:00]

[00:01:01] Sam: Hello, and welcome back to Awin-Win Marketing Podcast and part two of our two part 2025 affiliate trends discussion with some of our industry friends.

[00:01:11] Rob: Yes, if you haven't listened to part one, it's well worth your time. But to be fair, you don't have to listen to them in order.

[00:01:19] Sam: But you do have to listen to them.

[00:01:20] Rob: Yeah, of course. You have to listen to them. But you can approach it as Christopher Nolan approaches every film he directs by messing around with the sequential order.

[00:01:28] Rob: And I think you'll probably end up less confused than I was after watching Tenet.

[00:01:32] Sam: Look at you with those contemporary cultural references. That was only five years ago, though.

[00:01:36] Rob: Or was it? Right. There's a thinker. [00:01:40] Anyway, as a reminder, we were joined by Sarah Bundy, founder of the OPM agency, All Inclusive Marketing, Mike Mallazzo, writer at Zero Clicks, and our very own David Lloyd, chief customer officer here at Awin.

[00:01:54] Sam: Part one touched on a variety of trends and topics including retail media, influencers, AI, [00:02:00] and dishwashers of all things. And part two calls out some of the growth opportunities and biggest challenges our guests see on the horizon. And of course, dishwashers got another mention.

[00:02:09] Rob: 2025, the year of the dishwasher.

[00:02:11] Rob: You heard it here first.

[00:02:12] Sam: You sure did. Enough on dishwashers for now. Before we dive in, remember, we'd love to hear from you if you're an Awin customer keen to appear on season two.

[00:02:19] Rob: [00:02:20] Just send an email over to podcast@awin.com or you can always reach out to Sam and I on LinkedIn to contact us directly too.

[00:02:25] Sam: Yeah, definitely. We'd love to hear from you, but for now let's pick up the conversation again.

[00:02:36] Rob: David, let me come to you first for this question. So we wanted to ask all [00:02:40] of you guys a bit about identifying one area of affiliate marketing where you see there being a lot of positive growth in 2025. And what do you think stands out for you?

[00:02:47] David: So I think we touched a bit on this earlier when we were talking about retail media, um, but where I think there's a huge opportunity is in what we talk about as brand partnerships, particularly for affiliate and for businesses like Awin and for our partners is, you [00:03:00] know, we have thousands of advertisers, we have relationships with them, we have the opportunity to help them monetize in the same way.

[00:03:06] David: Right. To say, well, actually you are a brand with an audience with consumers who are in a particular moment. Why don't we help you either add a little bit of profit or give your consumer a really delightful experience? Just pre or just post purchase. So we've [00:03:20] worked for example with a nutritional supplement brand.

[00:03:23] David: Uh, who offered consumers a free recipe box after purchase. I gave them an additional 200k in revenue, but it generated 60,000 new customers for the partner who was working with them post purchase. We have countless examples of businesses doing this. It works really well with subscription. But I think it can work well for [00:03:40] all kinds of different brands, in fact.

[00:03:41] David: If you have a non-competing brand who has a similar audience to you, perhaps, you know, has a perfect product to complement the product they've just bought from you, this is an incredible space, right? An opportunity for you to monetize and to give your consumers a good new deal or a great new experience, create loyalty.

[00:03:59] David: So for me, [00:04:00] That's the area I'm most excited about. We've been working on it somewhat. I would say for the last two years, we've seen it really take off over the last year. And I think honestly, it's an area we're just scratching the surface and this industry is really well positioned to help brands benefit.

[00:04:14] Sam: Rob, I think you've called that before, like retail media for, for all basically if it's done through affiliate.

[00:04:19] Rob: Exactly. [00:04:20] Yeah. It's democratizing access to it in ways that, you know, at the moment on the supply side, you've got Amazon and Walmart essentially, you know, dominating that aspect of the partnership.

[00:04:29] Rob: We'll wait and see. Um, Sarah, what about you?

[00:04:32] Sarah: Sort of piggybacking off the thought of B2B partnerships? I see there being a huge opportunity and growth in B2B affiliate marketing [00:04:40] in general. So not necessarily taking the side of a brand and a brand partnering and sharing information so that they can market to their own customers in the way that you're describing in retail commerce, but actually more on the lead gen side of the business.

[00:04:55] Sarah: In 2020, when COVID hit, The entire B2B industry shut down [00:05:00] for a couple of years, and they needed to pivot to figure out how to still drive growth and sustain their businesses. And a lot of them actually started to move into affiliate marketing to find ways where affiliates could get phone inquiries or request a demo or download this particular piece or get a sample or get a seven day free trial.

[00:05:19] Sarah: AIM [00:05:20] was one of the leaders that was able to get into that space quite early because when COVID hit the travel industry actually paused and we had to pivot quickly as well. So we noticed that there was this gaping need in the B2B space and we said, look, this model of affiliate marketing where you're partnering with people who are going to send you leads.

[00:05:36] Sarah: So that you can get those demos, you can, you know, get those free [00:05:40] trials, you can get a name and a phone number of people who are interested in using your SAS as an example, really skyrocketed and we were able to work with amazing brands like Oracle and NetSuite and Bill.com and Asana and Unbounce. And these are clients that to this day are still leveraging affiliate marketing to drive growth.

[00:05:56] Sarah: And I see 2025 continuing to scale in the B2B [00:06:00] space. And lead gen, I'd see a lot more partners coming in and where you've got things like the consumer reviews and wire cutters. I think that space is going to emerge for B2B lead gen as well, uh, and more SaaS type of brands. So that's a space that I'm really excited about seeing that growth around and it's going to be growth in brand integrations as well as partners coming into [00:06:20] the space.

[00:06:21] Rob: Interesting. Uh, Mike, what's your take?

[00:06:23] Mike: So two things for me, one super niche and one a little broader. One thing I think is going to really start to take off is what I would call prestige direct response content. Um, so right now you sort of have this dichotomy where there's like great written organic editorial content.

[00:06:36] Mike: And then a ton of this really gross content that gets written for performance [00:06:40] marketing that gets like run through Taboola and Outbrain, but it converts it like 20 percent and you're like, what the hell? I think there's going to be some folks that come in that actually write direct response content that is truly, really good.

[00:06:50] Mike: It's not just really good at selling products, but it's actually just sort of like truly high quality. Lauren and the Quality Edit have kind of been doing this with Facebook content for, for years, but I think this is going to become a much broader offering. [00:07:00] Because things are so much harder on organic search.

[00:07:01] Mike: So I actually think you'll see the kind of content that gets arbed through email and Outbrain and stuff really increase in quality a lot over the next couple of years because I think it will have to to continue to be as performance. I think that's interesting. In light with that, I think there's another really interesting co-op play in affiliate.

[00:07:16] Mike: In addition to sharing data, brands going in together to offset rising [00:07:20] CACs, I think is going to be a really big thing. I wrote a whole piece in future commerce about this, but to bring it down to an affiliate example. Imagine how much more traffic a partner can buy if seven companies in a gift guide that are noncompetitive are all giving 30 percent commissions.

[00:07:33] Mike: Think about, like, what the economics could be. Think about how many cheap Like Facebook eyeballs, you could buy against that content. Brands are going to need it [00:07:40] because it's just too hard for subscale brands like, like ours to go in alone. You know, you're never going to do this with direct direct competitors, right?

[00:07:46] Mike: I don't think you'll see LG and Samsung do this on the best dishwasher article, but if you think about content angles that are not explicitly ranking one product against the other brands going in together to provide more lucrative offers for affiliates, I think is a space that. [00:08:00] It's going to have to take off at some point, it ties into retail media and data sharing and other pieces.

[00:08:05] Mike: I've tried to do a little bit this year with some folks in the market, and it's felt a little early. It's felt like I'm trying to force something that isn't there yet, particularly in the Amazon space. Um, I think that's something that you'll start to see happen next year and be a bigger part of the growth playbook over the next sort of five years.

[00:08:19] Rob: Hmm. That's [00:08:20] pretty interesting.

[00:08:20] Sam: Mike, kind of just the reverse of that, like, what do you expect the single biggest challenge the industry is going to face across 2025?

[00:08:28] Mike: The fact that the arbitrage era of Facebook and Google was ending. Everything's downstream of that, right? Like four to five years ago, the CPMs on Facebook were a third of what they are for a lot of brands in our space right now.

[00:08:39] Mike: Like that is just a [00:08:40] seismic change in how growth happens. And that's why, I mean, Applovin just released its commerce offering months ago, and they're now valued at 100 billion, which is more than like Snap and Pinterest and Reddit and all these companies combined. And it's because there's just so much eagerness for a new incremental growth channel.

[00:08:55] Mike: If we were having this discussion six to 12 months ago, I would have said this like performance marketing [00:09:00] arbitrage era is over, so it's going to be all about old school stuff like content and brand and affiliates and stuff. But, but somehow arbitrage seems to always find a way. It's mobile games right now.

[00:09:10] Mike: Um, but yeah, I think everything is still downstream of the fact that most of us that are in this business came into this business when performance marketing was relatively speaking, easy and [00:09:20] cheap. It is now hard and expensive and the industry still hasn't fully adapted to that and it'll just take a couple more years for that to play out.

[00:09:26] Mike: Um, but yeah, most of the, the, the trends I think are sort of downstream of that and then obviously downstream of, of how Google evolves.

[00:09:33] Sam: And what about you, Sarah? Where do you think the industry will face its biggest challenges over 2025?

[00:09:39] Sarah: [00:09:40] I think there's going to be a few things that are going to be challenging for a bunch of players.

[00:09:44] Sarah: So if you're, whether you're a brand, an affiliate, a tracking technology, or a network, or an agency, different challenges. For everybody, competition. So there is a huge tidal wave of people coming into the space. It seems very noisy, you [00:10:00] know, Mike gave a really good, uh, analogy that it is hard and expensive.

[00:10:05] Sarah: So for all of the people who are currently in the space, trying to Retain, you know, their market share and continue to evolve and continue to innovate and continue to prove value when all of these people are doing the same thing [00:10:20] and new people are entering the space is going to be a challenge for the existing players.

[00:10:23] Sarah: In addition to just the cost of operating, the cost of talent, the cost of tech, and these things that need to be added in. I think regulations are going to continue to come into play and try to keep up with those regulations and adapt to those regulations and adhere to those [00:10:40] regulations is something that everybody's going to have to keep their pulse on, which is just more resources and time, which takes away from things like growth and execution and strategy and things like that.

[00:10:51] Sarah: So just something extra that we're going to have to really keep our eyes and ears on and adhere to. And then I just think that [00:11:00] authenticity is going to be a problem because I think so many people are going to lean on fast and easy, which means leveraging AI and tech and potentially even things like offshore support and talent in a way where quality can potentially suffer, uh, if it doesn't have the right people on it or the right measurements in [00:11:20] place or the right leadership keeping an eye on it.

[00:11:22] Sarah: So. How is that going to render with customers? How is that going to render with things like serbs? How is that going to render with things like brand reputation and quality of brand? And so I think people just need to be very careful not to choose quick and easy over quality because when it comes to our industry [00:11:40] and partnerships and performance, Quality is still going to be what wins the game to me and I think a lot of people are going to potentially learn the hard way on that one and so people just have to be careful.

[00:11:54] Rob: Just interrupting Sam for a minute to tell you that Awin-Win Marketing Podcast is brought to you by Awin. Now you might be listening because you're an ecommerce retailer struggling to grow your brand awareness, get more customers, generate additional sales or maintain your bottom line with marketing and advertising.

[00:12:10] Rob: Using the Awin platform these challenges go away as you unlock unlimited pay on performance. Partnership opportunities and promotional spaces that reach consumers everywhere. Choose which affiliate partners best match your marketing objectives. Control your costs by defining how you pay these partners and customize your affiliate marketing program using Awin's tech to mirror your unique goals, whatever they may be.

[00:12:32] Rob: Visit Awin.com today and start growing your own weight with the Awin platform.[00:12:40]

[00:12:43] Sam: David, same question for you. What do you think the biggest challenge will be?

[00:12:47] David: I think the biggest challenge for next year for this industry is going to be tracking. You know, we have challenges at the browser, the device level. You have, uh, app versus site. You have so many things that are interfering with our ability to track accurately.

[00:12:59] David: Uh, and that's [00:13:00] a really big challenge I would say for the industry, but it's also a really good opportunity. So for us within Awin at least, we've taken it upon ourselves over the last several months and into next year to improve tracking standards in the industry. A couple of months ago, we introduced something called the Conversion Protection Initiative.

[00:13:15] David: Uh, CPI, so I don't have to say that again, and that for us is a really big [00:13:20] kind of flag that we're planting, saying that we have to get this right in 2025. So for those who are not familiar with it, what we've said is that something we were already asking advertisers to do, we're now going to require them to do.

[00:13:32] David: And that is to have server to server tracking in all cases where they have a transactional app. to use, uh, an app measurement platform as well and make sure they're [00:13:40] measuring sales in their apps. Uh, we're going to ask them to do that so that they can fully understand the value of all of their activity with affiliates and so that they can reward affiliates appropriately.

[00:13:50] David: So we announced that a couple of months ago. We know that it's not always easy to do if you haven't already got your server to server app tracking set up. So we've given people over six months to get it right. Uh, but from [00:14:00] April the 7th, if you don't have that set up in place, you're What we're going to do is to add on top of all of your deterministic tracking, some probabilistic tracking, which will be worked out pretty precisely in conjunction with the advertiser showing, okay, this is what we think on top of what you already tracked, you're seeing, right?

[00:14:15] David: This is what those publishers, those affiliates have driven for you. And we're going to make [00:14:20] sure that you understand the real value of your advertising. And we're going to make sure that affiliates are really fairly rewarded for that. And if we do that, we get it right together. With affiliates, with advertisers, with agencies, then I think what we're going to get is we're going to get back to that virtuous circle.

[00:14:34] David: We have really good quality affiliates, driving more sales for advertisers, the advertisers [00:14:40] properly rewarding the affiliates, affiliates doing more and more of that activity. It's great for consumers as well. And hopefully we're going to get back to that virtuous circle. So it's a big challenge that we have to get right, but I'm really heartened by the industry's response to it so far.

[00:14:54] David: I think it's highly likely that competitors are going to do similar things to what we've decided to do here. We're [00:15:00] having some really, really positive conversations with advertisers and with publishers about it right now. So I think that is the biggest challenge, but I think it's the one that we're really facing into and saying this is, this is where we have to get this right.

[00:15:11] David: And it's going to be good for all of us if we take that bold step.

[00:15:13] Rob: Before we wrap things up, what is the one piece of advice that you give to any brands out there considering [00:15:20] entering affiliate marketing for the first time?

[00:15:21] Sam: Mike, why don't you go first?

[00:15:23] Mike: Yeah, I think especially now it's just to be relentlessly curious about what's happening in the space, right?

[00:15:28] Mike: And I'm talking out of both sides of my mouth a little because I said you might not have to worry about some of these AI changes for nine months. Start caring a lot about it now. Right, like, this, this stuff is changing faster than ever, and I think fortune [00:15:40] will favor the relentlessly curious.

[00:15:41] Rob: What about you, Sarah?

[00:15:42] Sarah: For brands thinking about entering the space, I would just encourage you to do it, guys. Jump in, do your research, obviously you should understand what affiliate marketing is, but if you're not doing it yet, You're absolutely getting left behind. You're leaving money on the table. Your competition is doing it.

[00:15:58] Sarah: You've got partners out [00:16:00] there who could be raring to promote you and they can't because you don't have an affiliate marketing program and you don't fit under their monetization model that they need to sustain their businesses and to support their livelihoods and grow in scale. Affiliate marketing has been around for.

[00:16:13] Sarah: Over two decades now I'm aging myself and I've been in it for pretty much all that time. Uh, it's [00:16:20] going to be around for another 20 years or more. It's not going anywhere. The model of people promoting companies and products and businesses that they feel passionate about and care about and resonate with their audiences is not going to go away.

[00:16:33] Sarah: So if you're late to the game, that's okay. But. Now is the time to move forward with it and invest in it [00:16:40] more double down on it because the opportunity is there. The money is there. The customers are there. It's a proven model. You've got all the tech and partnerships. You need to be successful.

[00:16:50] Sarah: Regulations are now in place. Anything that might have felt successful. scary in the past and has kept you from affiliate marketing in the past. All of those things have been addressed. [00:17:00] So you're safe to enter the space now. And there are people who are there and ready to help you. There's tech ready to help you.

[00:17:05] Sarah: There are experts ready to help you and partners want to go. So I encourage you to make the phone call, call an agency, call a win. See where you can start and, uh, just get started and then you kind of learn and grow from there.

[00:17:19] Sam: Great. Thanks, [00:17:20] Sarah. David, last but not least, single best piece of advice for any brand considering affiliate marketing for the first time.

[00:17:26] David: First thing I'd say to somebody, and I say, this is somebody who, who only joined the industry in 2022 is make sure you have a 2025 understanding of what affiliate marketing is, because I think there's still not enough, really strong understanding of just how [00:17:40] profitable and, uh, high quality and diverse. A channel this can be just how versatile it can be in terms of meeting appetizer goals from branding right through to really really refined performance So make sure you understand it well and then just really get started and don't underestimate The power of the channel because I think this is the other thing I think people can [00:18:00] underestimate first of all the volume You can drive a really good ROI, right?

[00:18:04] David: The real volume of sales, the difference you can make to your bottom line as an advertiser, typically working with us. And I'm sure with others as well at an ROI of around 13, 14, 15 to one. So the scale and the ROI don't underestimate that and don't underestimate, um, the sheer [00:18:20] diversity of partners, right?

[00:18:21] David: Uh, two, 300, 000 active partners we have on our network. I think I said that a bit like Yoda, 200 to 300, 000 active partners we have on our network. Um, You know, it's a really, um, it's a, it's a really, really exciting place to work, right? So really don't be limited by, [00:18:40] by all perceptions. Uh, and if you can do those things, then you could really surprise yourself, right?

[00:18:44] David: Particularly, you know, if you haven't been doing this before, you could surprise yourself with just how many profitable sales you could drive and just what an impact you could have on your brand.

[00:18:52] Sarah: I'm just going to add in that for anybody who is thinking about starting their first affiliate marketing program, or actually putting a [00:19:00] lot of resources into it in 2025, this is not something that is a set it and forget it channel.

[00:19:05] Sarah: It needs to have proper care and attention and strategy and management and tools and systems and expertise. And hands on deck in place. So whether you're working with an agency partner to do that, whether [00:19:20] you hire or train or associate a person in house to do that, or whether you work with your network partner to do that, please make sure you put the right people behind it.

[00:19:30] Sarah: Who understand the channel who care about the channel who can build the relationships who can execute on the strategy that's aligned to your brand because it won't work [00:19:40] if you're not going to put the right resources and people behind it. So make a phone call and get some help.

[00:19:49] Sam: Thanks so much to Mike, Sarah, and David for joining us and sharing their predictions for the year ahead. Some really great nuggets in there that I'm sure we'll be keeping tabs on across the year.

[00:19:58] Rob: Indeed. [00:20:00] Now, as mentioned at the start, we're currently recording episodes for Season 2, which we're aiming to share with you in early Q2.

[00:20:06] Rob: So, if you're not already subscribed to the Awin-Win Marketing Podcast channel, make sure you click that button now so you don't miss an episode.

[00:20:14] Sam: Definitely don't miss a new one. But in the meantime, you can go back and listen to all of season one, where we had some great chats with [00:20:20] brands like Vodafone, SharkNinja, McGee & Co and Tomahawk Shades.

[00:20:24] Rob: Not to mention a mix of really innovative and interesting affiliate partners, like Increasingly, CreatorIQ, Tyviso.

[00:20:31] Rob: So go check out those episodes on Awin.com or wherever you get your podcasts.

[00:20:36] Sam: And while you're checking them out, don't forget to give us a rating and review. [00:20:40] We love your feedback and it really helps us reach a wider audience. But until we return, it's goodbye from Rob and I for now.

[00:20:45] Sam: Bye!