How influencer marketing is embracing affiliate marketing tactics

Influencer marketing is going through a reevaluation by brands that are eager to track the financial success of what has long been measured by followers, likes, comments and shares. To this end, brands are increasingly shifting their influencer strategies to integrate sales-based payment models rather than simply paying flat fees to creators. Though affiliate marketing has historically been separate from brands’ influencer marketing strategies, the line between the two marketing realms has become blurred. More brands are turning to creators to push products to their followers with affiliate links, which allow influencers to earn a percentage of the conversions they drive through those links. The links also have the added benefit of enabling brands to track metrics with a tangible business impact, such as sales. “Since there's so much money being pushed into creators, some brand executives and leadership have started to wonder what the ROI really is,” said Lindsey Gamble, associate director of influencer innovation at influencer marketing platform Mavrck. “We're getting impressions, we're getting content from these creators, but what does it really mean?” Most brands incorporating affiliate linking into their creator partnerships have embraced a hybrid approach to working with influencers, offering an upfront payment to a creator for a set of social media posts and then incentivizing them to generate additional revenue, of which creators get a cut, through affiliate links. In recent months, the majority of brands coming to influencer marketing agency Digital Voices have asked specifically about this payment structure, said Jennifer Quigley-Jones, the agency’s CEO and founder. Check out the latest Ad Age events and award programs She pointed to looming economic uncertainty as the key factor fueling brands' growing interest in this more cost-effective influencer payment model. “At the moment, I'd say most of the briefs we get coming in are like, ‘What's the cost per acquisition or the return on investment going to be?’ And it's really interesting to be hearing that from day one,” she said. “Brands are asking us much more if, instead of paying a big upfront fee, they could pay 50% upfront and then 50% commission—which means space for affiliate platforms to step in.” More news: #TikTokMadeMeBuyIt trend put to the test According to Influencer Marketing Hub’s 2023 “The State of Influencer Marketing” report, hundreds of brands have restructured their influencer payment systems to base their payouts to influencers on a revenue-sharing model rather than solely on the flat fees for social media posts that have previously characterized brands’ work with influencers. Of the 3,500 marketers Influencer Marketing Hub surveyed for the report, 53% said they compensate influencers based on the “percentage of sales” they drive through their social content, up from 42% of marketers who reported using that payment system in 2022. And, notably, only 19.6% of this year's respondents said they pay creators a flat rate for their content—a stark difference from the 49% of marketers who reported doing the same in 2022. “With a true affiliate program, you're only paying creators based on what they drive—so, you're only really spending dollars based on conversions,” Gamble said. Amid continuing economic turmoil, this lower upfront cost approach to working with influencers—one that doesn’t require brands to pay astronomical fees for a single Instagram Reel or a TikTok video—has become very appealing. “By being able to have that tracking mechanism where we have these typical vanity metrics but we also have conversion-related metrics—like the clickthrough rate and the conversion rate—we’re able to see how creator content is truly impacting the consumer purchasing journey,” he added. Brands look to affiliate platforms The affiliate marketing industry is projected to keep growing and hit $14.3 billion globally in 2023, according to Influencer Marketing Hub. As a result, affiliate-centric platforms such as Mavely and LTK have seen an uptick in demand. “Major retailers—who historically have made affiliate marketing less of a focus, or who haven’t really done influencer marketing—are starting to shift, and they’re starting to say, ‘Hey, channels like Meta and Google aren’t working as well as they used to. We need to figure out another channel we can use,’” said Evan Wray, CEO of Mavely, referring to Meta and Google’s introduction of anti-tracking features. @mavelysocial ‼️ Diversifying your income as a content creator is the key to longevity when it comes to your brand and business. Booking brand deals is one way to generate income, but it is often times inconsistent. Tapping into other revenue streams like affiliate linking and providing services such as ebooks and online courses are a great ways to create passive and CONSISTENT income when monetizing your social channels. To learn more about affiliate marketing sign up for Mavely and head to our blog for more information. #affiliatelinking #affiliate #monetization #monetize #influencerstrategy #influencertips #contentcreator #mavely ♬ no - kenzie !! 🤍 Macy’s, Kohl’s and Old Navy—three brands that joined Mavely within the past few months—declined to comment for this story. Similarly, LTK is seeing surging investment from brands into its creators. Though LTK has existed since 2011, half of brands’ spending with the platform has come in the past two years alone, said Stephanie Sandbo, VP and head of brand partnerships at LTK. “Especially in this economic environment, marketers aren’t wanting to put money in places where they don't feel really confident about what the return is going to be,” Sandbo said. “Having this commission-on-sales model allows us to really directly answer that question—like, this particular creator, if you're trying to drive sales, makes sense for your business, because we can see that he or she is already driving those sales for you as a brand or retailer or for your competitive set.” More from Ad Age: Tinx and Rod Thill share advice for brands A hybrid approach The majority of the brands leaning into affiliate programs are treating them as a supplement to traditional influencer marketing campaigns rooted in engagement and social media impressions, rather than a replacement for these influencer partnerships, said Maira Genovese, founder and president of agency MG Empower. Since 2017, her agency has overseen influencer marketing campaigns for brands such as Bumble and Chopard. MG Empower also recently started piloting an affiliate marketing platform with two brands and 100 influencers in response to the growing interest in affiliate programs Genovese has heard from brands. In the coming months, MG Empower will begin offering both influencer and affiliate marketing capabilities to clients. “Affiliate [marketing] is becoming bigger and bigger with influencer marketing, especially when it comes to nano- and micro-influencers. They're the ones that [are] actually contributing to sales—they’re the talents that can convert,” she said. “When you go to mid-tier, macro- and mega-influencers, it’s more for awareness—to tap into their communities. When it comes to a brand wanting to convert, micro and nano influencers are the right tiers to work with. They convert 45-50% more than a macro- or mega-influencer.” Several brands branching into affiliate marketing, such as Urban Outfitters, have added these commission-based creator partnerships as a component of their overarching work with influencers. And because brands don’t need to pay these influencers upfront to secure their participation in an affiliate program, they can “launch and test organically … before putting paid dollars behind a partnership blindly,” said Cara Browning, digital marketing manager of affiliate at Urban Outfitters, which started up its affiliate marketing efforts through Mavely in August 2022. @lilymull1s i am obsessed #urbanoutfitters i love you #haul #clothinghaul #gifted #affiliate #foryoupage #foryou #fyp ♬ original sound - lil On LTK, some brands have experimented with this hybrid influencer-affiliate campaign model, Sandbo said. These brands typically invest flat fees into a set of creators for dedicated posts promoting their brand, and then provide affiliate links to these creators to give them the opportunity to earn additional revenue, she said. The growing adaptation of a dual influencer and affiliate strategy is part of a natural maturation of marketers’ approach to influencer marketing, Mvrck’s Gamble said. While brands have been willing to spend large sums on influencer campaigns and accept the murky return on ad spend they earned through those partnerships, those brands are now pulling back and honing in on influencer relationships that spur clear, trackable performance, which is where affiliate marketing has come in, he said. Affiliate linking and social media Social media platforms such as TikTok have played a crucial role in the modern, influencer-driven iteration of affiliate marketing. The rise of the #TikTokMadeMeBuyIt phenomenon, for example, has led many creators on the platform to embrace TikTok’s power as a social commerce medium and begin including commissionable links to platforms like LTK and to their Amazon Storefronts on multi-link landing pages featured in their TikTok bios. More news: TikTok hauls help dollar stores win with Gen Z And, in March, TikTok began piloting an in-app affiliate program as part of its ongoing rollout of TikTok Shop—a marketplace integrated into the app—in the U.S. This affiliate marketing program is designed to enable creators to earn a cut of the sales revenue they drive directly through TikTok, rather than requiring them to link to outside platforms. @jeneen_sahtout ♬ original sound - Jeneen sahtout With product recommendations and affiliate linking already serving as characteristic elements of TikTok, this affiliate marketing program makes sense for TikTok, and can provide both the platform and brands with more trackable data about the specific creators and videos driving sales, Gamble said. “There’s been so many cases of brands’ products selling out [due to TikTok] … but there’s not always a ton of data around it. But with that trackable link, TikTok—or any platforms or brands that are running affiliate programs—have real data points that tell them how many conversions and sales were generated.” The prevalence of affiliate links on TikTok—and especially their adoption by prominent creators—has shifted creators’ perspective of affiliate marketing, too, said Julia Belkin, a creator and content marketer. In 2014, Belkin began sharing coupons and discounts with followers on her Instagram, @freebies_and_more, and later expanded her content to include affiliate links and platforms including TikTok. When she started out, “people used to get almost angry if you promoted an affiliate link,” she said, but “now, people know and accept that if you’re promoting a deal, you’re going to get your cut.” @freebiesandmore #walmartfinds #walmartclearance #walmartdeals #clearancefinds #clearanceshopping #clearancehunter ♬ Boy's a liar Pt. 2 - PinkPantheress & Ice Spice “I started my Instagram account way before affiliate marketing was even really popularized,” Belkin added. “Maybe beauty and fashion bloggers were doing it, but certainly not bargain hunters like me. I didn't make anything off of Instagram for a really long time. But when I joined TikTok in 2020, during the pandemic, that's when everything really changed for me. That was when I started really taking affiliate marketing seriously.” Now, she sells an average of $20,000 to $25,000 worth of products monthly that include affiliate links on just the affiliate platform Mavely, she said. The commissions she earns from those sales comprise 45% of her total income—and she expects that percentage to jump to 65% by the end of 2023. With both brands and social platforms such as TikTok and YouTube increasingly honing in on affiliate programs—largely due to their cost-effective and measurable nature compared to traditional, engagement-based influencer campaign models— commission-based models are primed to play an increasing role in the influencer marketing landscape moving forward. “Brands are recognizing that influencer marketing is no longer just this golden child,” LTK’s Sandbo said. “It's no longer something that they're testing and learning—it’s something that they know is going to actually drive impact for them. And anybody who's trying to see a return on their investment in this space needs to be able to actually see that black and white data.” Sign up for Ad Age newsletters From influencer marketing to agencies, get the latest news and analysis delivered to your inbox Click here

How influencer marketing is embracing affiliate marketing tactics

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