Performance Marketing Poised For Dramatic Growth
Last week in Santa Barbara, CJU attendees breathed a communal, but skeptical, sigh of relief as the media reported an end to the Great Recession. Thankfully, the Affiliate Marketing channel has fared better than most other industries due to its focus on pay-for-performance pricing models.
Kerri Pollard, General Manager of Commission Junction, presented some of the following positive statistics about the current growth of the Affiliate Marketing / Performance Marketing industry and the projected growth opportunities ahead.
Advertising Growth Rates:
- Total advertising spend is projected to grow by 10 percent in the next 5 years.
- Online ad spending has tripled in the last 10 years and is expected to grow by 60 percent in the next 5 years (from $22.7B in 2009 to $36.3B by 2014
- US Affiliate Marketing Spend is projected to grow by 110 percent in the next 5 years (From $1.9B in 2009 to $4B by 2014.
Media Time Spent vs Ad Spend:
Based on these numbers by Morgan Stanley, a clear shift from print towards Internet marketing is happening.Â This will accelerate as CMOs, CFOs and other corporate executives fully understand the pay-for-performance Internet marketing model.Â The red outline rectangle above equates to approximately $50B in advertising spend opportunity.
eCommerce Sales vs Total Retail Sales
According to the US Department of Commerce, e-commerce sales still only account for a small sliver of the total retail sales channel. This is creating huge market opportunities for performance marketers when these sales move online and as new technologies are created to enable companies to track and pay performance marketers for driving these online sales.
This is all great news for the performance marketing industry. It will be great to watch the innovation and changes to our industry as more of these ad dollars flow online, as the C-Level executives fully embrace the power of pay-for-performance marketing, and as the investment capital community fully grasps this enormous opportunity.