Here’s Why 2024 Could Be a Transformational Year for Affiliate Marketing

Unpacking Holiday 2023 Outcomes

Going into the holidays, the only thing that seemed certain was that consumers were going to behave much differently than they had the year before, or even in 2021. Sure enough, the first test of the holiday season passed with flying colors: consumers spent $12.4B in online purchases during Cyber Week, with Black Friday and Cyber Monday each setting new records, up 7.5% and 9.6% YoY, respectively. As anticipated, the flood of deep discounts motivated millions of budget-conscious consumers to finally pull the trigger on their holiday shopping lists.

While there are many important learnings to be gleaned from the 2023 holiday season, one trend in particular caught our eye. The phenomenon has yet to gain traction in the major headlines but offers a unique vantage point on shifting consumer behaviors and warrants further examination by any digital marketer looking to stay ahead in 2024.

Affiliate Traffic Made Waves During BFCM in 2023

In the days following Black Friday and Cyber Monday, the affiliate marketing analytics team at LT Partners, a New Engen company, uncovered a striking and undeniable trend. A sample taken from 57 retail partners over a period including the two weeks leading up to Thanksgiving and through Cyber Monday, affiliate-driven traffic was up nearly 100% YoY. This metric is made even more impressive by the fact that advertising spend during the same period was essentially flat compared to 2022. By comparison, total e-commerce traffic for the same segment was more or less flat YoY. Other notable findings from the analysis include a sizable drop in affiliate Conversion Rate to the tune of -50%, and stalled Revenue growth at just a little over 1%.

To sum up the numbers: Traffic from affiliate channels increased substantially in 2023, but Conversion Rates plummeted and Revenue plateaued. Put into context, consumers are engaging with affiliate content more than ever before, and they are clicking less into brand websites directly. Given what we know about the budget considerations that so many Americans had to make going into the holidays, these findings support the assumption that consumers are being more discerning in their purchasing decisions. Shoppers are relying on review sites, influencers, and any kind of other 3rd-party validation that gives them the confidence that they are getting the right product at the best available price.

Are We Entering a New Frontier in Affiliate Marketing?

While this development has the potential to impact a variety of channels, affiliate and partner marketing stand to gain the most from the emerging shift in consumer behavior. Remember how we said that we measured a nearly 100% increase in affiliate traffic at effectively no extra cost YoY? This is possible because of the channel’s CPA (or pay-to-play) model, in which advertisers only pay if a transaction occurs. Conversely, every other digital channel operates on a CPM or CPC basis and would have to pay for that same surge in traffic.

Before the 2023 holiday shopping season, brands were already beginning to expand the scope of their content partner investment. In 2024 we anticipate this trend to persist, with continued strong performance from content publishers forcing a larger conversation about content attribution. “Content partners drive over 90% of new traffic across the board. And even though they are introducing brands to new audiences, the traditional last-click structure of affiliate programs often prevents them from getting credit for this traffic. The credit instead goes to partners positioned at the end of the consumer journey, where they are able to capture the final click before a conversion,” explains Lacie Thompson, Co-Founder of LT Partners and Chief Growth Officer at New Engen. As such, attribution models must evolve in 2024 to reward the extraordinary top of funnel momentum content partners are driving.

So, will 2024 usher in a new era of affiliate marketing? We’ll have to wait and see. But as far as we’re concerned, it’s high time to consider whether or not the channel is structured in a way that is truly equitable, particularly for the publishers driving high financial value for businesses.

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