As ecommerce continues to grow and as competition for consumers becomes increasingly expensive, brands, retailers and online businesses are constantly in the hunt for more effective and affordable ways to reach consumers. Other methods of marketing besides search marketing, online advertising or social media marketing are being sought after to determine if reaching consumers can be done with less cost or better effectiveness. Affiliate Marketing is one of those methods.
More and more Retailers are seeing Affiliate Marketing as a viable marketing channel given that it can represent anywhere from 10-20% of online sales and the cost to support a successful Affiliate Marketing program is more manageable in comparison to other forms of Marketing. In Canada, however, Affiliate Marketing is not as well known, as used or does not receive the same attention as it does in the USA or the UK. The reasons why are many and beyond the scope of this article. However, what follows are some of the reasons why Affiliate Marketing is poised to break out in Canada.
1. Continued growth in eCommerce in Canada
Retail ecommerce sales in Canada for 2013 reached C$21.61 billion or 4.5% of total retail sales. In 2014, ecommerce sales reached C$25.37 or 5.2% of total retail sales in Canada. In comparison, US eCommerce runs at 6.5% of total Retail sales and the UK at 13%. Canada has a lot of room to grow. As ecommerce grows, not just in dollar volume but in percentage of overall sales, so does Affiliate Marketing.
2. More eCommerce selection in Canada.
The majority of ecommerce purchases in Canada are derived from only a handful of well known retailers. Thus limiting consumer selection and retailers to promote for affiliate publishers. However, a number of online ecommerce platforms are enabling thousands of independent ecommerce stores to launch with more ease and less cost in Canada; many of which have Affiliate Marketing in mind from the beginning. In addition, as shipping rates and shipping efficiency improves, more US online retailers will market to and ship to Canadian consumers.
3. Continued growth in mCommerce
There’s no stopping the mCommerce train. Given that over 60% of Canadians have a smart phone (higher than the global average), over 60% access the internet regularly using their mobile device and that some eCommerce sites have shown mobile purchases surpassing 40% of sales, then it is inevitable that more and more mobile affiliate publishers and technologies are created in order to benefit and leverage all this mobile activity.
4. Growth in the supply of Affiliate Publishers
Publishers are the ones with the connection to the consumer and what enables Affiliate Marketing to be a powerful marketing vehicle. However, there simply aren’t enough of them in Canada. As more affiliate revenue opportunities emerge, potential publishers, bloggers and marketers are realizing that there needs to be a larger supply of quality content or niche publishers that Retailers can count on and get paid by. UPDATE: We are already seeing the interest of very large publishers and media companies evaluating how deeply they wish to partake in the affiliate marketing sector as a means to drive value added revenue streams. If some of Canada’s largest publishers and media companies decide to aggressively pursue an affiliate marketing revenue model, then that would mean a surge in both traffic and revenues for Affiliate Networks and Advertisers who count on affiliate traffic. Affiliate Networks (along with the industry’s association) should invest the time in courting such publishers.
5. The continued growth of the Deal & Coupon industry
Many in the retailing industry simply do not realize the powerful impact Deal & Coupon providers have at reaching consumers. That industry collectively reaches about 7 million consumers in Canada or about 30% of Canadian consumers directly in their inbox. Consumer reach is outstanding and that does not take into consideration the reach of paper coupons or flyers. It is no wonder that some of the top Affiliate publishers in Canada are Deal & Coupon providers and they continue to expand and grow as consumers continue to seek them out demanding even more promotional offers from advertisers.
6. More online businesses getting into Affiliate Marketing
The majority of brand name retailers are already applying Affiliate Marketing within their strategy. Where much of the growth will come is from the thousands of smaller online businesses coming onto the market and growing over the next few years. As online tools like Shopify, Big commerce, WordPress and others make it real simple to launch and grow online businesses, many will then adopt Affiliate Marketing as a key strategy to promote themselves. In turn, there will be more online businesses and inventory for publishers to promote.
7. International Brands expanding into Canada.
As international retailers continue to enter Canada, more are doing so through affiliate channels to support their marketing efforts. This model allows access to local knowledge, analytics and buying behavior and acts as a test before committing further resources to the geography.
8. More Affiliate Marketing events, services, consulting and initiatives in Canada
The more events, advice and services that are produced in Canada that promote the concept of Affiliate Marketing, the more attention the concept will garner from the retailing and publishing community. Presently, there are only a handful of services in Canada and very few online resources on Affiliate Marketing specific to Canada. We at the Affiliate Marketing Association of Canada are doing our part. Also, most retail or ecommerce conferences in Canada have finally started to include Affiliate Marketing into their content/speakers/panelist/partners, although there isn’t an event dedicated to Affiliate Marketing in Canada just yet. Nevertheless, there are dozens of events and conferences focused on the blogger industry in Canada and almost all have Affiliate Marketing content within.
We are specifically highlighting Quebec in this list because it is the one geography in all of North America, that has the most growth potential in terms of eCommerce, bloggers, content and thus Affiliate Marketing. It represents about 20% of the Canadian market but given the language barrier, there are very few Affiliate marketers in Quebec that promote advertisers in French. Why? Two reasons: the first is a question of inventory-there simply aren’t enough advertisers that supply their sites and thus their content in French; the second reason is that there aren’t enough marketers, bloggers or publishers in Quebec that generate enough revenues from Affiliate Marketing in order for more to dive into the sector. As more ecommerce stores open up in French, as more bloggers come online in french, the more Affiliate Marketing in that province will grow…at a faster pace than other areas in the country.
At the moment, Affiliate marketing is one of the fastest growing online marketing strategies. More online businesses are attracted by the fact that 10-20% of their online revenues can come from a performance based model like Affiliate Marketing. As more online businesses grow and launch in Canada, look for healthy growth in Affiliate Marketing in the country in the upcoming years.
Contact the Affiliate Marketing Association of Canada to discuss your Affiliate Marketing Strategy