Affiliate marketing budgets surge as brands seek cost efficiency

Affiliate marketing is seeing increased investment from brands globally as new research points to its effectiveness as a cost-efficient growth channel.

The findings arise from 'The Global State of Affiliate Marketing in 2025 Report', a recent study conducted by impact.com, which surveyed more than 1,500 marketers, creators, and publishers from eight countries, including Australia, the US, the UK, Canada, Singapore, France, Germany, and Italy.

According to the report, 74% of brands have increased their affiliate marketing investment in response to higher costs associated with other paid media channels. Among those surveyed, 71% of marketers now see affiliate marketing as more cost-effective than traditional marketing avenues, while 66% of respondents reported stronger return on ad spend (ROAS) through affiliate channels.

Australian marketers' responses are closely in line with global trends. The report notes that 71% of Australian marketers have increased their affiliate marketing budgets, while 83% rate affiliate marketing as the most cost-efficient approach compared to other tactics. An additional 80% of Australian marketers identified affiliate channels as delivering superior ROAS, underlining local alignment with the global shift towards performance-based strategies.

"The data shows a major shift in mindset. Brands are reallocating budgets based on what is driving measurable, cost-effective growth," said Adam Furness, Managing Director APJ at impact.com. "Affiliate marketing has matured from transactional relationships to strategic partnership programs. We're seeing marketers build sophisticated partner ecosystems that deliver across the entire funnel."

The report highlights five pivotal factors advancing the professionalisation of partnership marketing. These include diversifying partner types beyond the traditional affiliate model, increasing strategic investment, deploying AI tools, collaborating with creators, and refining measurement techniques. Brands increasingly elect to partner with creators, eCommerce platforms, and publishers to better reach consumers throughout the purchase decision process.

Among the most significant trends is the growing role of creators in affiliate marketing. The report reveals that 59% of brands intend to dedicate at least a quarter of their affiliate and partnership marketing budgets to creators, reflecting the formalisation of social influence as both a branding and performance mechanism. Nonetheless, a disconnect persists: while 26% of participating creators expressed a preference for flat-fee compensation, only 19% reported receiving such terms, pointing to higher creator demand than currently supplied by brands.

This shift is evident in practice at Castlery, an online furniture retailer, where partnerships with creators are now integral to performance outcomes.

"As customer acquisition costs keep rising, creators have become one of our most effective performance channels," said Sarah Ann Lim, Global Partnership Manager, Affiliates & Creators at Castlery. "We're seeing real ROI from partnerships that combine creative storytelling with measurable outcomes and we've evolved our compensation model to reflect that."

Technology adoption, specifically artificial intelligence, is heightening these changes. As noted in the research, 97% of brands now use AI in their affiliate marketing strategies, with applications focused on partner analysis, personalisation, and chatbot automation. However, the majority of brands report only having explored two to three possible AI use cases, signalling further potential for expanded AI integration.

Measurement and attribution approaches are also evolving, with 94% of brands experimenting with alternatives to conventional last-click attribution models. These efforts include implementing mixed-media and position-based models to better understand the value of each marketing touchpoint. However, tracking of key profitability metrics remains limited, with only 20% of brands monitoring Customer Acquisition Cost (CAC) and just 18% tracking Average Order Value (AOV).

The report also highlights the influence of geographic and cultural context on affiliate marketing strategies. For instance, influencer-led affiliate growth is projected to experience a substantial acceleration in Singapore, with a 37 percentage point increase expected. By contrast, the adoption of creator partnerships remains comparatively slower in France and Italy. Australian marketers are encouraged to watch these developments closely as local affiliate programmes look to broaden their scope internationally.

"Affiliate marketing is no longer a niche tactic. It has become a core part of the modern marketing mix," added Adam Furness. "But to unlock its full potential, brands need to back the right partners, adopt smarter tools, and shift from transactional thinking to long-term strategies."