An affiliate program is a form of digital marketing campaign that started in the Philippines in the mid 2000’s when internet penetration is at its height in the country. According to internetlivestats.com, in 2002, there were roughly 3.5 million internet users in the Philippines brought by 75% user growth based on the previous year. Significantly, in 2010, there were already 23.3 million internet users in the country during when the internet penetration rate is 25%.
Before affiliate marketing was internet advertising. Companies partner with websites that can attract audiences that exactly fits to their target market. With a fixed fee ranging from 2,000 to 20,000 pesos, a company can advertise its products and services in a website via banner ads, text plug exposure arrangements and banner ad rotation system.
With the introduction of AdSense and AdWords by Google to the global audience, web publishers and independent bloggers in the country were given better opportunities in earning online revenues. The launching of these web-based products also marked the introduction of a newer advertising model – the affiliate program.
The first few companies that introduced affiliate programs to millions of Filipino digital marketers were Google, Amazon and eBay. Google AdSense became a popular internet advertising program in 2006, the same year when Google also launched their Blogger.com platform to the world. A blogger, an individual or group who write blogs and publish them on website, can own a blog site by spending little to nothing since registering an account with Blogger.com is totally free. In just a few steps, Google AdSense affiliate banner ads can be made to appear into the blog site. At this point, the blogger can then start generating income out of blogging.
Amazon established its affiliate programs in the Philippine’s internet market between 2004 and 2006. eBay, one of the largest auction sites today, made its entry in the later part of the decade when it introduces eBay Partner Network, Selling Instructor Program and Trading Assistant Program. On the same year, WordPress, another popular blogging platform, became an alternative to Blogger.com by many Filipino bloggers and web publishers.
Boom of Digital Marketing
The boom of digital marketing in the Philippines was observed from 2008 to 2012, the period when internet access grew by over 500%. New players in the affiliate marketing sector emerged. Some of the well-known companies that offered their affiliate programs that time were Lazada, ClickBank, and Zalora. Zalora’s affiliate program pays its affiliates with commissions ranging from 6% to 16% of every product sold. Lazada has a category-based commission structure: 5% for electronics, 8% for non-electronics, and 10% for fashion products. ClickBank, a US-based online retailer and one of the leaders in digital eCommerce, began to introduce its affiliate program in the Philippines in 2009.
Impact of Social Media and Mobile Web
Filipinos high-level engagement on social media somehow created a shift in the advertising interest of many buy-and-sell companies. According to Comscore, Philippines was the number one country in the world for Facebook penetration in 2011. Adding to that, a 2013 report published by Global Web Index revealed that the Philippines has some of the highest levels of brand openness and engagement in the world, with 25.6% of the total internet users in the country.
In 2014, Philippines is 10th in the world for the percentage of the online population that access the internet from their mobile phones. This only means that there is also big potential in the mobile advertising sector in the country.
Many economists predicted that the rise of social media and growth of mobile web ecosystem are about to create “digital transformation” in the digital marketing industry in the country. In line with this trend, more companies will engage in eCommerce using smarter affiliate marketing methods that are characterized by real-time ads statistics.
The Future of Affiliate Programs
Philippines is on a digital boom. A recent survey shows that 83% of Filipinos say that their lives were made easier because of relevant advertising. Reports say that there is an 84.7% chance for business owners to reach their sales and marketing goals if they effectively used social media and other digital marketing channels.
Overall, advertisers, web publishers and even independent bloggers and internet marketers that are engaging on affiliate programs in the country will continue to encounter more growth opportunities in online advertising, eCommerce, social media marketing, and search engine marketing in the coming years. This foreseen growth is highly attributed to the rapid internet penetration, increased digital engagement and strong economic growth of the country – the state analysts call “perfect digital storm”.