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Influencers and Their Role in the Affiliate Marketing Mix

Influencers and Their Role in the Affiliate Marketing Mix

A key skill for the modern marketer is being able to evaluate and adapt new digital marketing technologies. In no time at all, entire new industries sprout up around the latest digital buzzword. Knowing when to jump on the bandwagon and when to let it pass by is essential.

The current digital darling, influencer marketing, is generating the usual set of questions and unknowns. Should it be fully embraced and what is its role in the affiliate marketing mix?

The affiliate model

In traditional affiliate marketing, a merchant partners with affiliates, such as publishers, companies, people, bloggers, vloggers or organisations, to promote their brands, offers, deals or sales. This gives the merchant an additional promotional channel. Instead of doing all the working of promoting their products alone, they can activate partners to help them.

In return, affiliates are paid a revenue share of the sales they helped generate. This compensation structure consistently makes affiliate one of the most cost-effective marketing acquisition channels. That’s because brands are only paying for sales, not for traffic.

The influencer model

Conversely, influencers get paid a flat fee to promote the brand. Or they might get free products in return for their endorsement instead.

While influencers may be expected to meet unofficial traffic and sales targets, they do not share commissions from any final sales. This makes the influencer marketing model fundamentally different from the affiliate one. Companies are essentially paying for the “cachet” that influencer endorsement can bring to a product. They pay to affect the decision along the buying road rather than the final click that takes the sale.

Drawing comparisons

Affiliate marketing programs are often designed for customer acquisition and incremental revenue growth, whereas influencer marketing tends to be more focused on the brand messages, value and awareness. This impacts how companies use them. If they have an established product supported by a solid brand, they will favour affiliate marketing programmes in the overall marketing mix. And if they have a new or unknown product, they will prefer the influencer one.

This makes sense because it aligns the economic incentives of the merchants and the promoters. From the perspective of an influencer, who wants to spend time and energy promoting an unknown or untested product unless there is a guarantee of a financial payoff later? And, from the viewpoint of the merchant, what's the point of paying for a lot of “buzz” if it doesn’t lead to any sales?

Combining the two

Both affiliate and influencer marketing programmes work, but until recently they’ve been considered as separate and entirely different approaches. That is despite the fact that the original concept for “influencer marketing” predated the era of bloggers and online celebrities.

In fact, influencer marketing is something that used to exist firmly as a part of affiliate marketing over a decade ago, before the rise of more conversion-oriented publishers, including voucher code and cashback sites. Only it wasn’t called “influencer marketing” back then. The concept was similar – at that time, content sites aggregated products and relevant content to drive search volumes to brands. Even without anyone else to convert the sales, amazingly, content sites made money.

What’s changing now is how merchants utilise influencers. They have a better understanding of how they impact the customer purchasing decision. They know that the value of the influencer is not at the point of sale, where the conversion takes place, but earlier in the process, when the customer is first beginning to choose between various competing products.

Ultimately, there needs to be a re-alignment of incentives, such that both merchants and influencers feel rewarded. Influencers want to feel valued and respected as a marketing partner rather than just a free marketing opportunity, while merchants wish to add value to the brand and support the customer’s sales journey, as well as drive final sales.

New role

While a mix of influencer and affiliate marketing is not for all brands, there is a growing number of success stories. For certain brands that are keen to highlight their heritage or their founding story, and for those with products that can only be understood as part of a broader “journey,” influencer marketing can be integral to driving customer understanding of their product. Influencers can explain how it works and what the benefits are, while simultaneously underlining the its exclusivity or desirability.

In short, influencers can become a significant part of affiliate marketing. For merchants, they command a voice within a community of consumers who trust their opinion and will weigh their recommendations much more heavily. For advertisers, the reach that these influencers can provide now comes with the added benefit that their brand automatically gains credibility if an influencer recommends and works with that brand.

Putting it all together

To see how influencers can play an important role within the affiliate marketing channel, consider the example of a leading high street fashion brand. The UK fashion-forward retail brand decided to partner with top fashion bloggers. It was exactly them who were best suited to showcase the full range of the company’s clothing and accessories. The company launched a dedicated influencer hub and the internal communications team worked to coordinate top fashion bloggers, focusing on seasonal trading periods for maximum brand coverage.

In this case study, the leading fashion retailer re-aligned the economic incentives for the fashion bloggers. In return for additional coverage, the company would pay each blogger site a ‘top-up’ payment when they drove intent that ultimately led to a sale they didn’t convert on a last-click basis. This is important because it marks a sharp departure from the last-click cost-per-acquisition model of the traditional affiliate channel. It recognises the role that these influencers have on the customer journey through to purchase.

The high street retail brand team understood that; even if the influencers were not responsible for actual final sale, they were still “sales facilitators.” They were driving people to check out product ranges they might not typically consider. Furthermore, they were potentially leading to sales where people were buying entire outfits, not just a single fashion item.

Choosing the right model

Brands that recognise how influencers can play a major role within the affiliate channel can see significant dividends. Not just in terms of awareness, but also sales. The key is being flexible with their commercial model, so that they can truly value content affiliates as a serious part of the marketing approach.

Now is the time for brands to take a more balanced two-pronged approach to their affiliate campaigns. The first is stick to the last-click, cost-per-sale model to drive sales. It works. The second is for the brands looking to drive sales intent at an earlier stage. Let’s think differently and recognise the contribution that these influencers make to both the brand value and the sales journey. By re-evaluating commission payments and restructuring them, the overall return on investment doesn’t have to suffer and affiliate campaigns might become a more authentic reflection of the channel’s diversity.

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Gemma Robinson

Gemma Robinson

Gemma is relationships director at Type The Hype , a UK blogger network. With over 10 years experience in beauty, fashion and content driven e-commerce, Gemma is at the forefront of blogger monetisation with a huge understanding of blogging from both a brand and bloggers perspective.

Read more from Gemma

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