The Unexploited Potential of Affiliate Marketing in South Africa
The internet has revolutionised just about every facet of life as we know it. We shop online, pay our bills, and pretty soon we’ll probably be voting online too. Of course, marketing is no exception, and the opportunity to exploit the endless cheap advertising space on the web has spawned various new ways for companies to get their products out there.
Even those relatively new to the world of digital marketing will have likely heard of the big online advertising campaign managers. Giants like Google Adwords, and Bing Ads dominate the sector. Their pay-per-click approach can be a tidy little earner for many publishers. However, they do have some drawbacks; principle of which is their propensity to be exploited by fraudulent clicks that never result in a conversion for the retailer. Additionally, the rate they pay is irrespective of how effective a publisher is at generating actual sales for the company they advertise for.
If only there was a solution that meant advertisers could pay those that host their campaigns more fairly, whilst avoiding wasted budgets to pay-per-click scammers…
What is Affiliate Marketing?
Put simply, affiliate marketing is a deal between a company wanting to advertise a product, and a publisher. A percentage per successful conversion is agreed upon by the parties, and every time a customer completes a signup, or purchase, the publisher receives payment.
Let’s look at a real-world example. Say I operate an online store selling aromatherapy oils, and I want greater exposure for my products. I can offer appropriate sites an affiliate deal to advertise for me. They’ll hopefully have some great content about using oils like mine, and hey presto, there’s some to buy right next to the article! Once the sales start rolling in from the highly successful masseuse blog I manage to land a deal with, I’ll pay them every time someone makes a purchase through the link they host to my store.
In practice, this simplified model involves a lot of trust on the behalf of the publisher, and it’s a large leap to suppose that a random blog writer would trust some probably unknown company that’s potentially from the other side of the world. That’s where affiliate networks come in.
Affiliate Networks essentially serve two purposes. Firstly, they transfer the element of trust necessary for the whole concept to work. Rather than expect publishers to put blind faith in a far-off company, they act as an intermediary, ensuring agreements are binding, and payments are always made. Of course, there is a cost for this service but many feel the greater pool of publishers they can approach simultaneously, and with minor time spent on research far outweighs the small percentage cost in fees. This is the second purpose of the affiliate network – uniting greater numbers of publishers with advertisers.
For the publishers, affiliate networks are great because they ensure that their website is on the radar for many large companies. Additionally, advertisers enjoy the ease with which they can search and contact those publishers most suitable for hosting their campaigns.
There exist loads of different affiliate networks but some of the larger examples are CJ Affiliate, RevenueWire, and AvantLink.
The affiliate marketing cycle
Increasingly, the advertisers and publishers of the world seem to be waking up to the realisation that Adwords style campaigns really aren’t all they cracked up to be. Prone to malicious attacks, and failing to reward the most successful publishers, the model doesn’t offer much to any party other than the intermediary. Affiliate marketing offers a much fairer way for publishers to get rewarded for successful marketing, and more and more are getting involved daily.
What’s so special about South Africa?
The only thing that separates South Africa from the rest of the world in terms of affiliate marketing is that hardly anyone is doing it. Nothing else really differentiates us. There are some high-profile companies offering affiliate deals, but in terms of volume we lag.
There are several are in which South Africa’s affiliate marketing sector seems underdeveloped:
Beauty products: The global audience for makeup application tutorials is enormous. The global revenue for cosmetic products was $170 billion in 2016. Clearly, there’s great untapped potential here for South African merchants offering all kinds of beauty treatment products to get their products out there effectively. Beauty blog ShahnazLovesBeauty is one such example of a strong advertising opportunity for makers and distributers of cosmetics here in South Africa.
Casinos and other forms of online gambling: Online casinos are growing in popularity here in South Africa. There’s opportunity for publishers of gambling content, and the casinos alike to take advantage of affiliate marketing strategies. In other countries, such as the UK, a healthy economy of affiliating has emerged, making for profits for both the casino operators, and those that choose to write about them. There are many fantastic examples like this one to study and learn from.
Health, and Lifestyle: The world seems to be getting swept up in a massive health drive currently. Just about every week, there’s a new diet announced and a host of advertising opportunities accompany it. In Australia, for example, Paleo is all the rage. Those that publish content on Paleo lifestyle, including recipes and workout schedules have teamed up with suppliers of grain free produce; grass fed meats, and the like, in a mutually beneficial agreement. With one of the forefathers of the Paleo movement, Tim Noakes, being a South African citizen, there’s certainly untapped potential here.
Fashion: Similarly, to cosmetics, there exist a huge network of bloggers with a much large following of readers. Such sites will often utilise Instagram and other social networks to interact with their audience across multiple mediums. This again is a great opportunity for affiliate advertisers. The most successful of these attract an audience large enough to make or break companies. Chiara Ferragni of TheBlondeSalad, for example, enjoyed a following of 5.6 million users on Instagram, and 1.2 million on Facebook. This shows you the kind of exposure possible.
Electronic Goods: Suppliers of electronic goods in other large consumer economies are frequently advertising their products through ratings and review-type sites and blogs. This is an opportunity yet to be seized by their South African counterparts. An affiliate deal with a tech-savvy blog could certainly help increase turnover, providing additional for both advertiser and publisher alike.
Travel: In other countries, like the UK, Australia, and US, the proliferation of travel blogs in recent years has led to a predictable union between the publishers of travel content, and providers of various services with the industry. The likes of Crystal Ski tease their all-inclusive package ski trips to readers of community pages, such as Ski-Buzz, and reward the publisher with their comprehensive in-house affiliate package. Similar opportunities for specialist deals exist here in South Africa too, owing to our highly-prized tourist attractions.
The opportunities are waiting to be seized
We’ve talked about just a few of the many different areas in which affiliate marketing can help boost South African company’s overall sales. There’s an opportunity to offer publishers of information specific to your products payment for advertising them in just about every niche imaginable. What’s more, those publishing your advert have far greater incentive to push your product than if relying on pay-per-click models offered by the likes of Google and Bing. Finally, affiliate marketing provides a fairer way of distributing advertising budgets to the most effective publishers. It’s only fair that if someone helps make five sales for your company they get rewarded greater than a publisher that makes one or less. By rewarding those that sell you can use your budget to incentivise your publisher to help sell your products with you, and the higher rate they enjoy for successful conversions keeps everyone satisfied.
Experts in the field have predicted that the affiliate marketing industry will grow an additional 10%, to $6.8billion, between now and 2020. It’s a huge expanding business in which South Africa currently lags for no good reason. With a little better understanding, hopefully this will begin to change in the coming years.