UK advertisers spend £50m on gaming affiliates in 2012
Gaming is responsible for 6% of UK online performance marketing - market is dominated by insurance and credit card comparison sites.
Online gaming is the fifth highest-spending sector for Online Performance Marketing (OPM), research by accounting firm PricewaterhouseCoopers (PwC) on behalf of the Internet Advertising Bureau UK (IAB) has found.
Calling it the UK’s “hidden economy”, UK advertisers spent £814m in 2012 on affiliate marketing, one part of OPM alongside lead generation. This was found to generate £8bn in sales, equal to a return on investment of £11 for every £1 spent.
Driven predominantly by insurance and credit card comparison sites in the financial services sector (45% of OPM expenditure) and clothing and accessories and electrical and computing advertisers in retail (20%), the five top OPM advertising sectors are completed by telecoms and media (10%), travel and leisure (9%) and gaming (6%).
In 2012, UK consumers conducted approximately 100 million direct transactions to the value of £8bn as a result of affiliate marketing, and submitted 70 million enquiries (indirect transactions) which resulted in £1bn in lead-generated sales. This means OPM drives around 5-6% of all UK ecommerce retail sales, the research added. In addition to the convenience and cost-savings common to internet transactions, OPM is one of the reasons consumers can access so much informative content free of charge online, the IAB said in a release.
Though the channel is pervasive, OPM is not credited with its contribution to the economy, it added. Tim Elkington, director of research and strategy at the IAB, said: “Despite around 3,500 advertisers and 10,000 publishers engaging in Online Performance Marketing it still has the air of a ‘best-kept secret’. This is particularly surprising, considering each year it drives more than two online purchases for every UK adult and causes the equivalent of every UK person to fill out a form showing interest in a product “ generating £11 of revenue for every £1 spent.”
Driven mainly by insurance and credit card advertisers, the finance sector is the biggest spender, accounting for 45% of OPM expenditure in 2012. A significant proportion of the finance sector’s revenues generated by OPM comes through price comparison sites.
The study estimates that between 2008 and 2012, advertising expenditure on OPM, as a whole, grew by 57% due to lead generation spend increasing by 136% and affiliate marketing spend increasing 50% over those four years.
Suppliers of OPM services and technology estimate their revenue will grow by 25% in 2013 “ a combination of market share gain as well as market growth “ while advertisers estimate they will spend 5 to 10% more on OPM in 2013.
Anna Bartz, Senior Manager at PwC, says: “Economically challenging times have seen marketing budgets squeezed and greater evidence required of return on investment. As a result, we expect that the attractiveness of paying for advertising based on an extremely measurable and specific consumer action will see more advertisers using Online Performance Marketing as a key channel for driving sales.”