March 23, 2023

CPA in 2023: what trends will define the affiliate industry in India? - MediaNews4U

By Jim Black on Jan 8, 2023

During 2022, affiliate marketing continued to grow in the India region, driven by the fast-paced increase of the e-commerce market and the emergence of innovative publishing channels. Brands are no longer content with the simple benefits of the CPA model. Recent regulatory changes and new challenges for the global economy are forcing them to choose platforms with innovative tracking solutions and full transparency. The affiliate market is changing rapidly.

The CPA model enhances consumers’ shopping experience and generates more revenue for the partners involved. Merchants (advertisers) gain loyal customers and increase sales. Publishers including content creators and services owners earn money from every transaction, while shoppers enjoy better deals. Neha Kulwal, Managing Director of Admitad APAC, takes a look at some leading trends reshaping the affiliate marketing business, regionally and globally.

Social selling and influencer channels will continue to grow

Social media influencers, celebrities, and social selling techniques have grown as publishers in the past years. The leading merchants (advertisers) in the region are more and more focused on social channels leading to a burst in short product promotional videos by Indian influencers, live commerce streams, and broadcasts.

As a result, various advertisers report that such publishers now contribute nearly half of the sales generated in affiliate marketing channels. The channels most utilized in India are YouTube and Facebook, with Telegram rising, while Instagram seems to be less important in this context.

In the social selling sphere, discount coupon codes in India are currently the leading method used by social sellers to drive sales to merchants. In addition, Admitad observes a growing awareness regarding better tracking and transparency solutions offered by global networks.

Clearly, this trend will continue to grow in 2023, as affiliate networks also focus on recruiting more of these publishers and specialize further in understanding how to best serve partners in this ‘new social selling world’, including the need for better ‘packaging’ of micro-influencer services.

Data privacy regulations and the upcoming end of third-party cookies

An issue that continued to stand out in 2022 is the move of governments and ‘big tech’ companies towards more stringent data privacy regulations. This affects current targeting and tracking technologies in digital marketing. In 2021, Apple rolled out changes limiting the data that advertisers can track. Since then, Facebook’s revenues and stock prices have witnessed a big drop. The next big impact on revenues will be when Google stops the use of third-party cookies in Chrome, by the end of 2024. The market quickly adapts and progressive affiliate networks, including Admitad, have already introduced cookieless tracking solutions.

Co-partnership between affiliates and link-building is on the rise

Creating joint content and introducing the affiliate partners to audiences is a great way to gain new followers and increase website traffic. This includes doing live streams, content videos, or writing a guest blog. Another great option on the rise is trading backlinks to affiliate partners’ website(s) to boost SEO and Google search ranking.

The rise of ‘buying journey publishers’ led by FinTech and loyalty programs

Service companies that have built a unique audience realize that they have the potential to become leading publishers. Airlines and banks are introducing this new revenue channel by providing discounts and cash-back to their millions of customers. Already, in India, such strategies proved to be successful.

The most exciting development in 2022 was the success of buy-now-pay-later (BNPL) such as Klarna, and other fintech companies that present a starting point of the buying journey. These companies have obtained an additional revenue source through affiliate marketing and are now among the most sought-after publisher types.

The continued emergence of these new types of publishers points to a future that reduces the role of the ‘classic affiliate media buyer’.

SMEs fueling the long tail of e-commerce

Millions of small and medium-sized businesses (SMEs) are going online every year, especially since the pandemic. They require both e-commerce enabling platforms, like Shopify, and different marketing tools including affiliate marketing to boost their business.

The cost-per-action (CPA) model offered by affiliate marketing is a safe choice for SMEs. Products like Tapfiliate serve this exact purpose making it easy for SMEs to develop their affiliate marketing strategy.

Artificial Intelligence and Automation

The performance marketing industry has been using artificial intelligence (AI) for several years, but the trend went into overdrive in 2022 coupled with automation tools to aid the daily working tasks of marketers.

AI optimization for targeting and conversion has provided greater insight into campaign performance and driven better return on investment (ROI). In affiliate marketing, for example, AI is used to set up and run A/B tests on affiliate marketing campaigns. It can automatically and continuously redirect the investment toward a better campaign in real-time. AI can also be used in risk management, anti-fraud solutions, and scoring systems for publishers which will bring more transparency to advertisers. Instant Payout Pro solution is one of the first steps in this direction allowing publishers to withdraw revenue within a few minutes (maximum one day) after a completed transaction instead of waiting for weeks.

Looking to the near future

There are, of course, various other emerging trends, which are going to make an impact on the affiliate marketing industry. This includes the metaverse and voice search among other trends which should evolve and be evaluated again towards the end of 2023.

As the world economy is experiencing a slowdown, the impact on e-commerce will differ across the globe. In India, we expect the effects to be less than in other regions due to the different economic conditions in the APAC region and the fact that the e-commerce industry is in its early stages here. There is indeed a lot of untapped demand fueling it.

Still, the overall economic environment will come into the thinking of regional marketers who will want to get a better return on investment of advertising dollars which means seeking better marketing partnership technologies and safer publishing channels.

In such an environment, the aforementioned trends coupled with savings as a business model (vouchers, coupons, loyalty programs) will be winners in 2023. Affiliate marketing is a well-recognized vehicle for delivering results in those fields. The immediate future continues to look bright for affiliate marketing.

(Views expressed are personal. ‘Think Through’ features perspectives of authors or entities that are not curated or edited by Content may be sponsored by the contributing organisations.)