Report: Walmart suspends affiliate program with MagicLinks, Rakuten

Dive Brief:

Walmart suspended influencer affiliate programs with social commerce site MagicLinks and e-commerce giant Rakuten, according to a report in Business Insider.
"We regret to inform you at that at this current time WMCA (Walmart Canada) has requested to pause their affiliate program,” said an email from Walmart Canada sent on March 24. “We hope to bring back the program ASAP once the market levels out a bit, and things return to a more normal state. However, we do not currently have a date for the return."
MagicLinks confirmed the temporary suspension in an email to Business Insider.

Dive Insight:

Walmart's rationale for cutting its affiliate marketing program is not clear from the information available. It could be a cost-cutting measure in response to the COVID-19 pandemic, but it could also be a way to reign in a channel with a reputation for being a free-for-all prone to high levels of fraud.

Yet, Walmart isn't alone in cutting affiliate programs, per the Business Insider report, which notes that retailers Macy's, Patagonia and Victoria's Secret have taken similar steps. These moves are likely to impact the ability of influencers and other creators to generate revenue.

Prior to these moves, there were signs that influencer affiliate marketing was experiencing a spike, with RewardStyle, an affiliate platform for influencers, experiencing a 30% increase in sales in March, according to Business Insider. Some influencers may have been shifting their focus to affiliate marketing as brands have pulled back on influencer marketing during the pandemic.

Publishers could similarly take a hit if the pull back on affiliate marketing continues. These development come at a time when publishers are already getting hammered on the revenue side as marketers cut down on ad spend and block ads from running on coronavirus-related stories. Walmart has halted some of its affiliate programs with Vox Media and BuzzFeed, Business Insider said, citing a report in The Information.

The news also comes as 65% of CMOs are already preparing for budget cuts due to COVID-19 shutdowns, per a new Gartner report.