Affiliates Market Consolidation Sets Stage for Future Growth

The merger between AWIN and Affilinet will be igniting development in this key digital market channel

In September 2017, the merger between affiliates networks heavyweights AWIN and Affilinet was cleared by German antitrust authorities creating a global player in a fast-growing market.

After closing, German media giant Axel Springer will hold 80% of the combined company’s shares. United Internet AG, a leading German provider of Internet access and digital media applications, brought Affilinet into the equation and will own 20%.

Headquartered in Berlin, the merged company is operating under the name of AWIN and account for over €600 million in revenues and 9,500 publishers worldwide.

Most important markets are the UK, Germany and the US. According to Forrester Research the total US market for affiliates is worth USD 5.4bn and projected to grow by 10% each year through 2020.

Interestingly enough, the German and the UK markets together already add up to more than half of US volumes with €1bn and GBP 1.3 bn, respectively – based on numbers reported by PWC.

While in the UK, affiliates have a 12% share of the digital ad spend, it is more than 15% for Germany. However, both markets are purported to be mature in nature. So, what’s coming next?

On the one hand, growth may come from developed markets such as France, where affiliates reach a mere volume of €118m, a bit more than 10% of total digital ad spend in France – based on numbers published by PWC.

On the other hand, new business models are looming on the horizon. One of the buzz words here is influencer marketing, which is already widely used by smaller platforms. In order to catch up, Affilinet has recently launched a product widget that influencers can implement on their websites. This widget allows bloggers to earn affiliates commissions without frills.

Finally, it will be exciting to watch what the affiliates platforms’ answer to the customer journey attribution conundrum will be. With the sheer amount of data available, it must be possible to develop innovative ways to price and analyse clicks along the customer journey.