Ad inflation drives brands toward affiliate marketing

Rising acquisition costs push brands to performance-based, AI-enabled partnerships.

Brands are accelerating investment in affiliate marketing as inflation in digital advertising costs erodes the efficiency of traditional channels and forces marketers to seek more accountable growth levers.

According to Impact.com, 74% of brands globally have increased their investment in affiliate marketing, with many now generating between 11% and 30% of total revenue from affiliate channels. The shift comes as global ad spending surpassed US$1 trillion in 2024, intensifying competition and driving up customer acquisition costs across paid media.

Adam Furness, Managing Director APJ at Impact.com, said rising costs elsewhere are a key catalyst behind the renewed focus on affiliates. As a result, brands are prioritising channels that offer clearer returns and incremental revenue. “About 74% of brands globally have increased their affiliate investment. They're looking for more efficient channels,” Furness said. “There are strong ROIs in the affiliate channel. And if I look at Singapore, specifically, 61% attribute more than 21% of their revenue from affiliate programs.”

Artificial intelligence is playing a central role in improving efficiency and scale. The report found that 97% of brands are already using AI to enhance affiliate performance, including predictive analytics and partner optimisation. “It boils down to AI removing the guesswork,” Furness said, noting that technology is helping brands address persistent challenges such as tracking, analytics and program scalability.

Creators are also taking a larger share of affiliate budgets as brands look for full-funnel impact. Nearly 60% of brands plan to allocate at least a quarter of their affiliate spend to creators, reflecting growing confidence in influencer-led performance. In Singapore, the shift is even more pronounced. “48% plan to dedicate 25 to 50% of their affiliate budget to influencer partnerships, and 12% actually intend to allocate over 50%,” Furness said.

The renewed emphasis on affiliates also reflects frustration with legacy attribution models, with 94% of brands re-evaluating how performance is measured across complex customer journeys. For Furness, the appeal of the channel lies in its ability to deliver beyond awareness. “They've become valuable, not just for the branding component, but all the way through to the acquisition side of marketing,” he said.