British consumers spent a record £16.5bn in 2014 on products and services bought through price comparison, voucher, cashback, loyalty and product review websites – 14% more than in 2013 – according to the Online Performance Marketing study conducted for the Internet Advertising Bureau UK (IAB) by PwC.
The report, accompanied by YouGov consumer data, shows that almost four in five (79%) Britons online¹ have used one of these types of sites in the past six months. Cashback websites are the most frequently used – around two-thirds (67%) of people who’ve used them do so at least once a month.
Nearly six in ten use a voucher code site (57%) or a mobile voucher app (56%) at least once a month, while almost one-third (32%) visit a loyalty site to spend or redeem their points.
“Britons generate 10 million clicks every day in pursuit of getting a better deal or finding the right product – it’s an utterly ingrained part of today’s savvy consumerism. To put it in context, at £17bn it’s already as big as the beauty industry,” said Tim Elkington, chief strategy officer at the UK’s Internet Advertising Bureau.
“For instance, 81% of Britons online are aware to some degree how price comparison sites make money, and whilst the privacy debate continues, the reality is that nearly half are willing to share personal information online to get these deals and over a quarter do so at least once a month.”
Holidays/travel (cited by 21% of respondents) is where people are most likely to be trying to save money or looking for more information, followed by energy tariffs (16%) and car insurance (15%).
Of the £16.5 billion spent according to the IAB/PwC data, £15.4 billion was on purchases that involved a third-party content website that gets a referral fee for ‘introducing’ the purchaser to the seller (aka “affiliate marketing”).
The other £1.1 billion in sales was generated from the 30 million online contact forms people filled in – for example insurance and credit card forms on price comparison sites (aka “lead generation”).
Drives 10% of e-commerce sales, equates to roughly 1% of GDP
In the industry these types of activity are dubbed “Online Performance Marketing” (OPM), being unique in that advertisers only pay a publisher for an ad if it causes someone to complete an action, such as making a purchase or submitting contact details.
OPM drives 10%³ of all UK e-commerce retail sales and roughly 1%⁴ of GDP – the latter, an approximate 34% increase on 2013.
UK businesses spent £1.1bn on OPM activities – 8% more than in 2013 – equating to a return of £15 for every £1 invested.
“OPM has grown to a near-£17bn industry due to the fact that all parties continue to benefit,” said Dan Bunyan, Senior Manager at PwC. “Advertisers get new customers extremely cost-effectively, consumers save money and get access to free online content, whilst the publisher in the middle gets revenue through referral fees.”
Financial companies, driven by insurance and credit card advertisers’ use of price comparison sites, are the biggest spenders on OPM – accounting for 34% of spend – followed by retail (21%) and travel & leisure (19%) companies.