International Expansion through Affiliate Marketing: the Publisher Perspective

Abstract

Objectives of the Study

Online publishers have traditionally faced challenges with creating sustainable revenue streams. Affiliate marketing, a performance-based online marketing model, is growing rapidly in popularity. This marketing model has emerged as a relatively new revenue model for online publishers, and as a prospective channel to reach foreign markets and target foreign audiences. The objective of this thesis is to study from the publisher's perspective, how engaging in affiliate marketing shapes the process of international expansion of an online publisher. The aim is to study the prospects of this model in terms of the achievable speed, scale, and scope of international operations, and to provide general practical insights into the affiliate marketing process from the publisher's point of view.

Academic background and methodology

The academic base for the research is founded on literature from the field of company internationalization and affiliate marketing. Three streams of literature on internationalization were reviewed, from traditional theories explaining incremental internationalization, to more recent theories explaining the rapid internationalization of international new ventures, and the internet-enabled internationalization. Thereafter affiliate marketing, its parties, model, and benefits, were covered in depth. The theories of internationalization and the affiliate marketing model were combine into a tentative framework, which was tested through a qualitative case exploration on a case publisher company.

Findings and conclusions

The thesis contributes to both academia providing a fresh perspective on internationalization theories, and to practitioners providing valuable insights on the dynamics of affiliate marketing. The main findings are that the network-dependent nature of affiliate marketing implies a heavy reliance on partner networks and their knowledge in internationalization. Failure to build appropriate relationships is a major barrier to entry, as these relationships can be exploited to reduce market uncertainty and compensate for lack of market knowledge. Additionally, the study shows that an online publisher can experience rapid internationalization in terms of time, scale and scope.