In 2020, just about everyone I know has heard of “influencers”. The term is so popular in today’s age that the word hardly necessitates quotations. If you’ve spent any time on Instagram, Youtube, Facebook, Twitch, or TikTok you’ve almost certainly noticed a fair share of sponsored content. Influencer marketing is becoming a major focus for brands as social media consumption continues to grow at record pace.
On the flip side of the coin, there is affiliate marketing. Affiliate marketing does not attract the same glitz and glamour as influencer marketing, yet it’s actually a larger industry. People unfamiliar with the industry may have little to no understanding of what affiliate marketing is, or how it operates. Some may be surprised to hear that it’s estimated 16% of all ecommerce revenue is driven by affiliate marketing. If you’ve ever google searched something like “best budget laptops in 2020” or “what gift should I buy for my teenager”, chances are you’ve been influenced by affiliate marketing.
In essence, influencer and affiliate marketing are quite similar. They’re both strategies for baking advertisements directly into media. Rather than placing a banner ad next to the content your target audience is trying to consume, affiliate and influencer marketing allows advertisers to blend media and promotion. They are both powerful channels, and the conversation here should be less about focusing on one or the other, but rather understanding which strategy is better suited towards your current goals.
Basics of Influencer Marketing
Influencer Marketing is focused on partnering with influential individuals like celebrities, models, household names. This concept is not new – for centuries, brands have been partnering with celebrities to advertise. What has changed is the introduction of social media, and with it, the ability for anyone with a smartphone and appealing content to garner an audience of (and influence over) hundreds of thousands of people. Anytime someone can maintain a large audience – there’s an opportunity to advertise. Today, brands are pouring billions of dollars into advertising through social media-based influencers.
As for how Influencer Marketing works, the Influencer-Brand relationship lifecycle typically looks something like this:
An advertiser will discover an influencer who aligns with their brand and has a significant audience
The advertiser will reach out with an offer for partnership, typically in exchange for a flat-fee based on the number of expected posts/stories/etc.
The advertiser and influencer will sign a contract with these terms, and the influencer will begin developing content that aims to bridge the gap between their typical content and an advertisement.
The influencer will post the content (clearly displaying it as a sponsored post), and the brand will begin measuring the success of the partnership.
How to measure Influencer Marketing success:
Typically, influencer marketing campaigns are primarily focused on brand awareness. Brands look to get exposure to relevant audiences commanded by influencers – but often these campaigns are not directly tied to revenue generation. Success in influencer marketing is most often measure by:
Social Media Engagement: measure the number likes, comments, shares, etc.
New Traffic or Followers: measure the increase in new social media followers on the brand’s profile, as well as traffic sent to the brand’s website
Lead Generation: less common, but if the influencer was asked to link to a lead magnet or sign-up form, brands will measure success on the new leads generated.
Basics of Affiliate Marketing
Affiliate marketing is less focused on influential people, and more focused on building partnerships with blogs, publishers, companies, and networks that have built an audience around your target consumer. You may not realize it, but companies like PC Mag, Business Insider, and CNET are all massive affiliates. Like influencer marketing, they make money from building content around products and services that advertisers pay them to promote.
Unlike influencer marketing, affiliate marketing typically runs on a performance-model. That is, an advertiser only pays an affiliate when that affiliate is able to successfully drive a sale, action, or lead. Consequently, the goals of affiliate marketing campaigns are most often oriented around driving sales or leads.
Affiliate marketing programs typically rely on a tracking technology, such as Impact, Refersion, or TUNE. These solutions integrate with shopping carts and forms to allow advertisers to track when an affiliate has successfully driven a sale or lead. When affiliates sign up for an advertiser’s program, they’re given a unique affiliate link to use in their promotion. When a consumer clicks the affiliate link and makes a purchase or submits a lead form, the affiliate earns a commission.
The Brand-Affiliate relationship lifecycle depends on if you’re keeping your program in-house or relying on an Outsourced Program Manager (OPM) or sole Affiliate Network. For the purpose of this article, we’re going to outline the brand-affiliate relationship lifecycle for an in-house program:
A brand discovers affiliates either through affiliate recruitment agencies or in-house recruitment.
The brand will reach out with an offer for partnership, typically a revenue share or commission based on the sales or leads they drive.
If the affiliate wants to join the program, they can sign-up with the brand’s affiliate tracking software (Refersion, TUNE, Impact, etc). Once signed up they will get access to their unique tracking link.
The affiliate will then work to promote that link through various channels – often content-oriented.
The brand will then measure the success of the program with their affiliate tracking software, and pay out commissions as the affiliate drives sales or leads.
How to measure Affiliate Marketing success:
Order Value: Is your affiliate enabling consumers to buy more product past your typical average order value? Are they buying higher value product?
Sales: Check your affiliate tracking software to see if you are meeting your sales targets through the affiliate channel!
Leads & Traffic. Are you getting more leads? More traffic? With the right affiliate tracking software, affiliate marketing can actually help boost SEO.
As you can tell, Influencer and Affiliate Marketing are quite similar – with just a few small differences that can go a long way. Here’s the questions to be asking if you’re deciding what strategy is best for your current goals:
Do you have budget for upfront payment to partners? If not, Affiliate Marketing will be better suited as you often only pay for performance.
Do you want to associate your brand with influential people on social media? Or do you want your brand talked about on blog posts, articles, reviews, or other web-based content.
What is the goal of your partner marketing campaign: Brand Awareness or Sales?
Either way – both strategies are powerful in promoting your brand. Partner Recruitment Agencies like Grovia can recruit and activate a combination of affiliates and influencers, so you can get the best of both worlds!