Influencer marketing can be hard to track, but statistics show that it’s one of the best ways to reach your target audience while simultaneously...
Influencer Marketing vs. Affiliate Marketing
We have had many requests for a blog post that covers influencer marketing vs affiliate marketing. So here we will show you...
After such a great response from our blog about ambassador programs vs affiliate programs, we have had many requests for a blog post that covers influencer marketing vs affiliate marketing.
As you may have guessed, all of these types of marketing are very closely related. Here are some of the differences between influencer and affiliate marketing, and how they can be used together.
Influencer Marketing vs. Affiliate Marketing
Influencer marketing is a type of consumer-to-consumer marketing that involves partnering with key influencers (people who have an online following of your target audience), to help promote your product or service.
With the rise of social networks, influencers can come in many shapes and sizes—from YouTube stars with hundreds of thousands of followers, to your friend from the gym with a few thousand followers, to animals that have millions of followers (think Doug the Pug or Lil Bub).
Having spent years running influencer marketing campaigns for clients, I find “micro-influencers” to be one of the best options. (Click here to learn more about micro-influencers.)
You can partner with these influencers in a variety of ways. There are paid collabs, in which influencers are paid to post about your product. And there are gifted collabs, in which you gift your product to an influencer in exchange for their post.
When deciding between these two agreement types, you should consider value exchange. Meaning, the value of what the influencer will receive (either payment or gifted product) should be aligned with the required actions you are asking of the creator.
Typically, more (or more complicated) required actions should merit a higher value incentive. Think: videos vs photo posts.
If you want more information on how to partner with influencers, check out our blog about how to start Instagram influencer marketing.
The last way you can compensate influencers is through affiliate marketing. Affiliate marketing is when you partner with another individual or entity to promote your product and offer them a commission in exchange for actions taken.
Originally, affiliates were other companies and websites that would promote your product online. Now, with the rise of influencer marketing, this tactic can be used as another way to provide compensation to influencers. This can be a great win-win, because the influencer only gets paid if their content leads to an action (like a product sale).
Although this seems like a great combination, there are a few downsides:
1. Need sufficient margins - If you are paying your influencers entirely based on sales, it can actually de-motivate them if your affiliate program is not enticing enough. For example, if you have a low-margin product, this may not be a good option because you won’t be able to pay the influencers enough per item to keep them motivated. For this, you may want to couple an affiliate program with a flat fee.
2. Tracking - If you have any experience with digital marketing, you know that tracking attribution can be extremely challenging. This is particularly true in today's online environment. Between privacy updates and consumers opting out of data tracking, a lot goes unseen.
Not to mention, the most common affiliate marketing tracking happens through coupon codes or trackable links. The problem with these solutions is that it takes many touches before a consumer makes a purchase—meaning they may see an influencer post about a product in August and not buy it until December.
Bottomline: this type of attribution doesn't tell the full story, so if you are relying on coupon codes or affiliate links to determine the ROI or success of your affiliate program you are likely missing critical insights.
3. Management - The more affiliates you have, the more time it takes to manage and properly pay them out. There are programs out there that can help you with this, but make sure you figure the program cost into your budget. Check out our blog about influencer management agencies vs. in-house management for more information.
Whether or not you choose to compensate your influencers through affiliate marketing should depend on your brand’s specific needs.
If the guidelines above are something your company can easily integrate into your marketing, then affiliate marketing could be the best option for you. If not, remember that you can begin your influencer marketing with another form of payment, such as product gifting or gift cards.
Remember that influencer and affiliate marketing can happen together or independently of each other. If you need help figuring out how to build a program that is right for your company, contact us to talk to an influencer campaign specialist.