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Affiliate marketing: Top 7 must-know trends for 2024

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Affiliate marketing: Top 7 must-know trends for 2024

In 2024, affiliate marketing will see brand-creator alliances rise, TikTok vs. Amazon competition, programmatic opportunities, and more, says Awin’s global head of content, Rob Davinson.

Affiliate marketing mirrors the broader digital landscape, with trends at the macro level resonating in our microcosm. In 2024, we’ll see emergent trends (artificial intelligence (AI), social commerce and retail media to name just a few) that will impact affiliate marketers.

Here we breakdown the key changes (and challenges) that affiliate marketing is likely to encounter this year, and what they mean for the industry.

1. Brand-creator affiliation will rise amidst social media slowdown

With global digital ad spend growth slowing (Dentsu predicts only 6.5% growth in 2024, after a historically low-growth year in 2023), and social media facing a similar slowdown as new user growth plateaus, brands can combat this by directly partnering with creators, as influencer marketing proves more resilient than paid social.

Major brands like The Body Shop and Walmart are two examples that launched large-scale creator affiliate programs in the last year, tying social awareness to controlled marketing outcomes. We see this trend further developing in 2024, as it not only counters platform-dependent risks, but benefits influencers seeking stable incomes,

Awin’s platform witnessed a surge of registering influencers in 2023 (over 10,000), foreshadowing continued growth in 2024.

2. TikTok vs. Amazon: Affiliate model’s value amid new competition

As major tech giants mature, Amazon transitions from a shopping marketplace to an ad space, while TikTok evolves from entertainment to a product purchasing platform. This encroachment on each other’s territory is likely to intensify competition, with TikTok employing an affiliate-type model, mirroring Amazon’s commerce flywheel.

Both platforms embracing affiliate strategies validates its efficacy. Brands may channel more ad budgets into these tech giants, necessitating a choice between entering new marketplaces or driving traffic to their e-commerce sites.

Opting for the latter requires enhancing the shopper experience, supported by affiliate tech partners, as exemplified by Nike’s livestream shopping collaboration with Contester, enhancing the Cyber period with engaging content on their site.

3. Programmatic challenges will propel affiliate ad spend growth

In 2023, the programmatic ad industry faced serious challenges, as reported in the ANA’s Programmatic Media Supply Chain Transparency Study. Among its findings was the fact that there is $22bn of wastage from the $88bn programmatic supply chain.

Advertisers often grapple with misaligned incentives, prioritizing cost over value, resulting in diminished ad quality. In contrast, affiliate marketing’s performance model, linking ad spend to tangible outcomes like sales, proves more valuable.

It says a lot that global spend in affiliate marketing last year is estimated to be around $14bn, a third less than was wasted in programmatic. As senior marketers consider their budgets this year, the data suggests affiliate marketing should garner greater consideration for its effectiveness.

4. News and media publishers will leverage affiliate commerce content

In 2024, with a record number of global elections, including the US presidential election and 40 national elections, political interest will drive traffic to news media sites.

Despite heightened ad spend forecasts, news publishers may not see increased income due to past challenges with programmatic display ads. Affiliate channels offer a solution for publishers facing declining ad monetization and brand blocklisting.

Additionally, major sporting events like the European Football Championships and the Olympic Games in Paris promise increased traffic, creating opportunities for affiliate efforts to offset ad revenue challenges and enhance the value of journalism amid growing demand.

5. AI revolution in search will pose a threat to affiliate longtail

When it comes to online, the significance of high Google search rankings has been paramount. As the old adage (meme caption) goes: “The best place to hide a dead body is page 2 of Google’s search results.”

Google’s search console, shaping our online information-seeking behavior for two decades, faces challenges from Google’s monetization motives and emerging AI-powered search consoles, like ChatGPT. These AI consoles provide instant answers, diminishing the reliance on external links and altering the traditional internet ecosystem.

Google’s Search Generative Experience (SGE) introduces AI-generated responses, potentially reducing organic traffic to publisher websites. Publishers face limited options – allow crawling for SGE or risk exclusion from Google search. SEO adherence to E-E-A-T values becomes crucial for publishers navigating this transformative shift, emphasizing the affiliate industry’s need to adapt and maintain audience-centric effectiveness.

6. Travel resurgence will inspire pop culture-inspired trips and affiliate growth

While some predicted its near-extinction after the 2019 lockdown, the travel industry is booming as we begin 2024.

IATA predicts that this year will exceed 2019’s travel record, with 4.7 billion people expected to board airlines in 2024. Awin observes a surge in affiliate-driven travel bookings, a trend set to continue as consumer confidence rises, airline capacity grows, and major events drive demand.

Expedia and Amadeus foresee a significant year for experience-based tourism (think set-jetting and music festivals). Affiliates play a crucial role in the complex shopper journey, offering inspiration, comparisons, and personalized options.

Brand partnerships, where one advertiser promotes another complementary one as part of the customer’ booking experience, thrived in 2023. Travel brands are well set to capitalise on this growth with lots of potential match-ups from other brands keen to tap into consumers’ resurgent appetite for travel.

7. As cheap fashion challenges sustainability efforts, green affiliates will emerge

Despite Cop28’s pivotal agreement to shift from fossil fuels, inertia persists around climate change. In 2024, the rise of ultra-fast fashion platforms like Shein and Temu, fueled by the TikTok trend of buying cheap dupes, contributes to growing landfill fashion.

Even impacting Amazon, Teemu users spend nearly double the time compared to Amazon, prompting the e-commerce giant to lower fees for clothes under $20. However, some affiliates continue to promote mindful consumer choices innovatively. Examples include Refoorest, planting trees for site visits, and Axon Mobile incentivizing eco-friendly commuting. And another new promising solution for 2024 is spearheaded by Birl, who are introducing the circular economy to e-commerce through their smart resale system.

Visit Awin to discover more market insights and trends.

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How Nvidia Pivoted From Graphics Card Maker to AI Chip Giant

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How Nvidia Pivoted From Graphics Card Maker to AI Chip Giant

A decade ago, Nvidia was a major graphics card maker, vying with competitors like AMD and Intel for dominance. Now it’s an AI giant with 70% to 95% of the market share for AI chips, and the brains of OpenAI’s ChatGPT. It’s also the best-performing stock with the highest return in the past 25 years.

Why did Nvidia invest in AI chips over 10 years ago, ahead of the competition? CEO Jensen Huang and board member Mark Stevens, Nvidia’s two largest individual shareholders, talked to Sequoia Capital partner Roelof Botha to explain what Botha called “one of the most remarkable business pivots in history.”

Nvidia’s original product was 3D graphics cards for PC games, but company leaders noticed by the mid-2000s that the PC market was hitting a growth limit.

Related: Nvidia CEO Jensen Huang Turned Down a Merger Offer in the Company’s Early Days, According to Insiders. Here’s Why.

“We felt we were always gonna be boxed into the PC gaming market and always knocking heads with Intel if we didn’t develop a brand new market that nobody else was in,” Stevens explained.

Jensen Huang, co-founder and chief executive officer of Nvidia. Photographer: Lionel Ng/Bloomberg via Getty Images

That need for a new market intersected with a product Nvidia already had on hand: its graphics processor unit, or GPU, which could be used to power tasks outside of gaming. Researchers at universities across the world began exploring the graphics cards, eventually building advanced computers with them.

Related: Is It Too Late to Buy Nvidia? Former Morgan Stanley Strategist Says ‘Buy High, Sell Higher.’

Huang recalled meeting a quantum chemist in Taiwan who showed him a closet with a “giant array” of Nvidia’s GPUs on its shelves; house fans were rotating to keep the system cool.

“He said, ‘I built my own personal supercomputer.’ And he said to me that because of our work… he’s able to do his work in his lifetime,” Huang said.

Other researchers, like Meta AI chief Yann LeCun in New York, began reaching out to Nvidia about the computing power of its chips. Nvidia began considering the AI market when AI had yet to enter the mainstream and was a “zero billion dollar market” or a market that had yet to materialize.

“There was no guarantee that AI would ever really emerge because, keep in mind, AI had had many stops and starts over the last 40 years,” Stevens said. “I mean, AI has been around as a computer science concept for decades. But it had never really taken off as a huge market opportunity.”

Related: Nvidia Is ‘Slowly Becoming the IBM of the AI Era,’ According to the Leader of a $2 Billion AI Startup

Huang and other company leaders still believed in AI and decided to invest billions in the tech in the 2010s.

“This was a giant pivot for our company,” Huang said. “The company’s focus was steered away from its core business.”

Huang highlighted the extra cost, talent, and skills Nvidia had to account for with the pivot, as it affected the entire company. It took 10 to 15 years of effort, but that business decision led to Nvidia powering the AI revolution with an early ChatGPT partnership.

“Every CEO’s job is supposed to look around corners,” Huang said. “You want to be the person who believes the company can achieve more than the company believes it can.”

Related: How to Be a Billionaire By 25, According to a College Dropout Turned CEO Worth $1.6 Billion

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Nvidia Makes Up Half of Mark Stevens’ $8.8 Billion Net Worth

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Nvidia Makes Up Half of Mark Stevens' $8.8 Billion Net Worth

What if you invested in Nvidia 30 years ago, before it went public, and held on?

Venture capitalist Mark Stevens is currently one of Nvidia’s top individual shareholders, second only to CEO Jensen Huang. He invested in the AI chipmaker in 1993 as a new partner at Sequoia Capital. Stevens has been on Nvidia’s board for most of the company’s history, serving from 1993 to 2006, and then again from 2008 to the present. Nvidia went public in 1999.

Related: Is It Too Late to Buy Nvidia? Former Morgan Stanley Strategist Says ‘Buy High, Sell Higher.’

“There’s at least three times I can think of where we almost lost the company,” Stevens told Bloomberg. “Jensen has his famous saying of, ‘We’re 30 days away from going out of business,’ which is almost laughable today, but in the ’90s it was the reality.”

No one anticipated Nvidia going from a $8 million or $9 million Series A to a $3 trillion market cap today, Stevens said.

According to a Friday Bloomberg report, the over four million Nvidia shares Stevens owns are now worth about $4.7 billion and comprise over half of his $8.8 billion fortune. The rest of his net worth comes from his 6% ownership stake in the Golden State Warriors and other investments made throughout his venture capital career.

Related: Nvidia CEO Jensen Huang Turned Down a Merger Offer in the Company’s Early Days, According to Insiders. Here’s Why.

Though the AI boom has propelled Nvidia stock to new heights, Stevens says that it wasn’t easy to hold on in the early days. The chip market was crowded with competitors, and it was expensive to keep the best Silicon Valley talent.

Mark Stevens looking through a 360-degree display. Photo by Al Seib/Los Angeles Times via Getty Images

Nvidia currently leads the AI chip market, with tech leaders like Microsoft and Google believed to be among its biggest customers. Those clients could one day be Nvidia’s competitors, joining other chipmakers like Intel and AMD.

Huang said in June that Nvidia’s strategy in response to rising competition was to make AI chips with the “lowest total cost of ownership.” Tens of thousands of Nvidia’s chips are the brains of OpenAI’s ChatGPT.

Huang has the largest individual stake in the company, with 3.8% or over 934 million shares. He cashed in on $169 million worth of shares in June. Other Nvidia executives and directors have sold shares worth more than $700 million since the start of the year.

Nvidia has seen over 3,000% stock growth in the past five years, which has made early investors wealthy. Some long-term employees are reportedly in “semi-retirement” based on stock grants alone.

Related: Elon Musk Praises Nvidia CEO Jensen Huang’s Leadership Style: ‘Absolutely the Right Attitude’

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NLRB Drops Expanded Joint Employer Appeal

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NLRB Drops Expanded Joint Employer Appeal

The proposed expanded joint employer rule, which an International Franchise Association (IFA)-led coalition challenged in federal court, was defeated Friday when The National Labor Relations Board dropped its appeal of an earlier ruling in favor of the coalition.

Related: Considering franchise ownership? Get started now to find your personalized list of franchises that match your lifestyle, interests and budget.

“This announcement means that the latest attempt to implement joint employer is finally finished and represents a landmark victory for franchise small businesses in communities across America,” Matt Haller, IFA president and CEO, said in a statement. “The franchise business model is the best vehicle for American workers to generate upward mobility and create small business ownership from all walks of life. Make no mistake: while today’s news means the current threat is behind us, IFA will remain vigilant against any attempts to target the franchise model or our members.”

Related: Find Out Which Brands Have Ranked on the Franchise 500 for Longest, Earning a Spot In our New ‘Hall of Fame’

Some form of the Joint Employer Rule has existed for years, but in 2023, the NLRB expanded it in a way that directly impacted the franchise industry. Under the proposed expanded version of the rule, two companies — say, McDonald’s and a McDonald’s franchisee — could more easily be considered “joint employers” of the same employees. That would make McDonald’s legally liable for any labor violation committed by one of its franchisees, even though McDonald’s itself did not hire and does not manage that employee.

Although this is the end of this attempt to expand the rule, attorney Jim Paretti of labor relations law firm Littler Mendelson recently told Entrepreneur what the NLRB’s options are moving forward. “The short answer is that the board can keep trying to write a rule,” Paretti said. “They can go back to the drawing board, try again and write something more narrow.”

Read More: Bloomberg Law

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