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How much of the company's revenue is generated by affiliate marketing?
Hello and thank you for asking Wonder! I understand that you are seeking the percentage of a company's revenue that is made up by affiliate marketing, with a preference for single-product, SAAS startups. The most helpful sources that I found were articles from TechCrunch and cleverbridge. In short, there are no exact figures given for this specific company profile. However, the figure stated for the software industry is 10% to 15% and the overall, general figure is 5% to 15%.
AFFILIATE PORTION OF REVENUES
During my research, I found that there were no examples of revenue percentages that were completely specific to single-product SAAS startups. The value of sales that a company generates from an affiliate marketing program is dependent on a number of factors, such as the quality of the affiliates, the price point of the product(s), the website's ability to convert traffic, and more. However, there are a number of examples and suggested ranges.
Daniel Saks, the co-CEO and founder of AppDirect, wrote a TechCrunch article regarding selling SAAS. A number of sales channels are discussed, which include affiliate marketing. He refers to Shopify as one of the best examples of an affiliate program in the SAAS industry. In 2012 and 2013 (more recent figures were not provided), their affiliate sales made up around 23% of their revenues. Their total paid to affiliates was over 100% more in 2013 than it was in 2012, due to the increased affiliate activity.
A subscription billing solutions company, cleverbridge, decided to address both the good and bad sides of affiliate marketing from the viewpoint of the companies with the programs. As a part of this article, they addressed the revenue percentage that companies in the software industry can expect from their affiliate marketing programs. This was 10% to 15%, but they do caution that this is when affiliate programs are properly used by the company. They state that affiliate programs are a good way for a company to expand their customer base and increase revenues. While costs can be an issue when starting a program from scratch, affiliate platforms can resolve this for companies just starting off or on a tight budget.
Acceleration Partners supports the figure given by cleverbridge, citing 5% to 15% as an overall, not software-specific, benchmark for the percentage of revenues a company should expect from affiliate marketing. They also state that it is cost-effective and can raise the average order value, in addition to resulting in more traffic, conversions, and awareness.
Kissmetrics specifies that affiliate marketing is a good marketing channel, especially for startups. Some of the reasons they state for this are the fact that it can be cost-effective, you're only paying for results, affiliates may be better advertisers, and the fact that you'll have a better idea on what your cost per acquisition will be.
Rakuten Marketing, which has an affiliate network previously known as LinkShare, went to Forrester Research for a survey on affiliate marketing. The results of this survey showed that most of the advertisers (80%) spent more than 10% of their marketing budget on affiliate marketing. However, this survey was not limited to single-product SAAS startups.
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To wrap it up, there are no revenue figures for affiliate marketing when it comes to single-product SAAS startups. However, the revenue figure stated for companies in the software industry is 10% to 15%, with 5% to 15% being stated as a general benchmark.
Thank you for asking Wonder! Please let us know if we can help you with anything else!