Although many consider affiliate marketing and influencer marketing to be the same, the two should not be confused. Affiliate marketing has been around for a while before influencer marketing skyrocketed in popularity. Business owners can benefit from both of these strategies, although they differ in many ways, including how they are developed, the costs they involve, what goals companies can achieve through them, and what their return on investment is. So which approach can work for you and what are the main differences between affiliate vs influencer marketing? In this blog entry, we'll go over the essential features of both marketing tactics so you can determine whether to use one - or both - of them.
What Is Affiliate Marketing?
Affiliate marketing is a type of performance-based marketing in which affiliates or publishers (individuals or businesses) receive a commission from advertisers (also called merchants) after promoting their goods using an affiliate link.
Exactly how does this work? There are multiple programs that publishers can join and upon receiving a unique link they can start promoting a brand’s products on various platforms, like social media, blogs, or their own business websites. When users visit one of these sites and click on the links or ads featuring the product, they are directed to the brand’s store or product page through the affiliate link. Affiliates are paid a commission or flat fee once a customer takes action and the details of the transaction are attributed to them.
Affiliates are remunerated differently depending on the campaign goal and the product or service they promote.
Most affiliate partners earn fees from the sale of physical products through their unique links. This type of compensation is known as Pay-Per-Sale. PPS campaigns aim to increase revenue and sales.
Another frequent payment model is the Pay-Per-Lead where publishers are paid a flat fee for each webinar subscription, whitepaper download, or any other action that converts regular users into leads. It isn’t hard to figure out that these programs focus on generating leads.
The third choice is Pay-Per-Click, where compensation is not based on actual purchases but rather on the number of clicks on an ad. These programs aim to generate website traffic to the merchant's webpage.
Types of marketing affiliates
Blogger and the host of the ‘Smart Passive Income’ podcast, Pat Flynn broke down affiliates into three categories.
Unattached: The affiliate advertises the products of an industry in which they don’t have any authority or relationship with customers. It's an extra source of revenue for people who lack the time or motivation to build their online presence or community but would like to earn passively.
Related: The marketing affiliate already has some expertise in the topic and established an online presence either on social media or in the form of blogs, vlogs, or podcasts. Consequently, promoting a product whose industry they know makes them trustworthy. Nevertheless, they don't have first-hand experience with the product.
Involved: They have a good command of the niche and used the product or service themselves and would recommend it to their audiences. The personal involvement of the publisher or an honest review makes this type of affiliate campaign appealing to users.
What businesses should choose affiliate campaigns?
This digital marketing tactic is usually used by large e-commerce companies with lots of products, like Amazon and Walmart in order to drive traffic and sales. Brands (both companies and influencers) selling digital products, including ebooks, software, and online courses can also leverage affiliates to promote these products on their platforms. Service-based businesses, like travel agencies, hosting providers, insurance companies or deal aggregator websites as well can benefit from this solution.
Pros and Cons of Affiliate Marketing
Listed below are some advantages and disadvantages of affiliate marketing for businesses.
Pros
Boosts sales: The affiliate marketing strategy is the best option if your goal is to increase sales or conversions. People or entities who possess knowledge of your industry are likely to drive more purchases than uninformed individuals.
Cost-efficient: Unlike other marketing solutions, you won't have to pay publishers upfront, but instead only if a desired action is performed.
Expanded reach: You can work with several partners at the same time and thus expanding your reach.
Diverse channels: You can reach customers through various channels, including multiple social media outlets, blogs, and websites.
Trackable and measurable: Affiliate campaigns involve unique links or codes which enable brands to track the performance of each publisher. With this knowledge, they’ll be able to pick and reward top-performing partners and prioritize platforms that yield more conversions.
Feedback on the product: Affiliates who have used or tested your products can provide valuable reviews and evaluations that will help you improve your goods.
Overall, affiliate marketing programs are easy to scale.
Cons
Requires high-margin products: To offer your marketers a decent commission, you need high-margin products and services. Obviously, you can figure out the commission after deducting your costs. The average affiliate rates vary between 5 and 25%.
Ad hijacking: Rouge affiliates may create ads that are similar to yours by duplicating the title, wording, and terms and deceiving buyers.
Fraudulent or false engagement: Some publishers may engage in fraudulent activity, like fake leads or misleading advertising in order to gain their earnings.
Income depends on affiliates: The amount of revenue you earn from this method entirely depends on the performance of affiliates. It is, therefore, critical to choose people and businesses as partners that meet your expectations.
Wrong affiliates: Basically, promotions from people with little or no knowledge of your products seem unreliable and dishonest. This can damage your brand's reputation.
Inconsistent brand representation: You have limited control over how your brand and commodities are promoted across numerous platforms. Your brand consistency may suffer as a result.
Tools for Setting Up and Measuring Your Affiliate Campaign
As with any marketing program, you’ll need tools to look for affiliates, provide them with unique links, and build, manage, and track your campaigns. The right tools not only help you understand and measure your progress but also save you a great deal of time and effort. Let’s take a look at some of the tools that can aid you.
Search and recruitment: Affiliate network platforms cover multiple niches and products and connect merchants with affiliates. ShareASale, ClickBank, Amazon Associates, and eBay Partner Network (EPN) are the most popular network tools.
Link management: Tools like these facilitate link creation and management with features like link cloaking, shortening, and link analytics. Pretty Links, Geniuslink and ThirstyAffiliates are among the most popular ones.
Link tracking: With these tools, advertisers can create unique affiliate links or tracking codes that publishers can use to promote products. They track sales, conversions, clicks, and other metrics. Some of the most preferred tracking systems are Refersion, Post Affiliate Pro, and HasOffers.
Data analytics and reporting: Analytical tools, like Google Analytics monitor traffic and conversions, while reporting tools like Supermetrics can help you combine data from different sources and generate a comprehensive report.
Full affiliate marketing lifecycle: Affiliate management platforms are complex suites that come with a variety of tools and cover your complete cycle of affiliate marketing efforts from search and recruitment to tracking and reporting. Along with tracking and attribution features, many of them offer fraud prevention functionalities as well. UpPromote and Kartra are all-in-one affiliate softwares.
What Is Influencer Marketing?
Essentially, influencer marketing involves taking advantage of public figures' authority and influence to spread the word about a company's products and services. Content creators, or influencers, have an audience on one or various social media platforms with whom they have developed a rapport. Through their content, they can easily promote products or highlight a brand's attractive features in an exciting and creative way.
We differentiate several types of influencers based on their size, niche, or platform. Influencer selection requires taking into account the brand's needs, expectations, and budget, as well as analyzing the creator's performance and relationship with their followers.
Types of influencer campaigns
Brands can choose from several types of campaigns based on their objectives, intended outcomes, and target audiences. These are some of the most common types of influencer campaigns.
Sponsored or paid posts: The most common collaboration type that can involve creators publishing image posts or videos about a product. Sponsored posts can serve many goals from growing engagement to boosting sales. Influencers are paid a flat fee for their work.
Giftings: Brands gift product samples or offer access to exclusive services to influencers, who in turn may post about these experiences. Giftings are a great way to create buzz around a product line or introduce new brands on social media. They are relatively low-cost, however, it’s crucial to know that not every influencer accepts freebies as remuneration for their work. After the usage rights are agreed upon, influencer reviews, tutorials, unboxing videos, and product showcases can be repurposed across multiple channels.
Influencer whitelisting: Influencers allow brands access to their accounts, so brands can run targeted advertisements there. Businesses can target specific users via influencer whitelisting without cluttering creator audiences' feeds.
Giveaways or contests: Creators can promote giveaways on their social media platforms and encourage their followers to participate. The prize is provided by the business. Establishing clear entry rules is essential. Giveaway campaigns are the most preferred technique for growing social media followers and engagement rates.
Influencer events: Organizing behind-the-scenes tours or product launches can generate buzz around a brand or product. It is an excellent opportunity to strengthen relationships between brands and influencers and create great content.
Brand ambassadors: A long-term partnership between a business and brand advocates who love and regularly recommend a brand’s products to their audiences. These programs can positively impact customer loyalty and increase reliability.
Influencer takeovers: During takeovers, influencers take control of a brand’s social media account and share their unique perspective with the brand’s audience. Takeovers provide a great opportunity to extend the reach and increase engagement.
Pros and cons of influencer marketing
Companies should weigh the benefits and drawbacks of influencer marketing before diving in.
Pros
Precise targeting: Influencers have an audience who align with their niche and share their interests. Through influencer promotions, businesses can reach distinct users who are truly interested in their products.
Increased brand awareness: Influencer marketing allows businesses to tap into creators’ existing audiences and enhance visibility.
Social proof and authenticity: Creators’ opinions and reviews carry more weight than traditional ads and provide validation for people.
Established reputation: Brands can build their reputations and become authoritative entities in their industries by partnering with thought leaders and experts.
High-quality content: Content produced by influencers can provide a fresh perspective on topics and be visually appealing and informative.
Cons
Fake followers and engagement: In spite of the decrease in influencers who inflated their follower base and boosted engagement with unethical methods, brands should still evaluate influencers based on engagement and audience authenticity.
Hard to measure ROI: Engagement metrics are easier to monitor, but linking influencer performance to sales is more challenging. To evaluate the effectiveness of each creator, businesses need to use clear tracking processes and attribution models.
Influencer selection: To select the right influencers, a significant amount of time and effort must be invested. In addition to meeting business requirements, they should align with the brand's values.
Costs: Influencer marketing may become a costly venture if companies work with high-end creators and celebrities or team up with misaligned influencers who generate low ROI.
Tools for Managing Influencer Marketing Campaigns
Discovery and analysis: Tools for identifying the right creators include social listening tools, in-app analytics of social media platforms, influencer marketplaces, and influencer marketing platforms.
Relationship management: CRM systems, content collaboration platforms, and several influencer marketing suites allow businesses to manage influencer relationships and coordinate communications.
Outreach and messaging: While creating the first message is critical, many tasks related to the onboarding and negotiation processes can be handled by email marketing tools, email sequence and outreach solutions. Influencer marketing platforms and marketplaces also offer functionalities and templates to contact creators.
End-to-end solutions: Comprehensive influencer marketing platforms offer a range of features that streamline influencer vetting, messaging and relationship building. These platforms allow companies to build and monitor campaigns and analyze their performance with shareable reports.
You Can Track Affiliate Marketing Campaigns with HypeAuditor
Influencers can work as affiliates who drive potential customers to your product pages through specific affiliate links. The good news is that you can measure influencer campaigns as well as monitor affiliate campaigns with HypeAuditor. Our platform supports integrations with Shopify, Magento, and WooCommerce stores for tracking sales. You can generate affiliate links and create customized promo codes per campaign or creator. We will measure clicks and orders once the campaign launches and display them in your reports.
You may also set up tracking for a custom store within HypeAuditor by providing UTM parameters. You can create promo codes and monitor performance in Google Analytics. As soon as you link your store to our suite and creators accept your proposal, your affiliate links and discount codes will appear on the influencer cards.
Differences Between Influencer and Affiliate Marketing
Each approach serves distinct goals
An affiliate marketing campaign's main objective is to increase conversions, such as sales. Additionally, they often focus on growing website traffic and generating leads.
In contrast, influencer marketing enhances brand awareness, establishes credibility and authority of the business in a certain niche, and helps users become loyal to the brand.
Different metrics to measure
Since the two approaches serve different purposes, different metrics should be measured. Affiliate marketing involves monitoring website traffic, CTR (clickthrough rate), conversion rate and conversions. Based on the campaign, you may track clicks, subscriptions, downloads, or sales. Also consider ROI (return on investment), AOV (average order value) CLV (customer lifetime value), and revenue when analyzing your success.
As influencer marketing partnerships can aim to accomplish a variety of goals, numerous KPIs need to be tracked. Businesses primarily measure influencer programs by assessing reach, views, impressions, brand mentions, and sentiment, along with engagement, CPE (cost per engagement), and engagement rate. Next comes the conversion rate, the number of sales, CPA (cost per acquisition), and ROI (return on investment) if other means such as promotional codes and affiliate links were also employed to boost sales.
Payment structure
Affiliate marketing is a commission-based process. An affiliate receives a flat fee once a specific action is performed or a percentage of every purchase made by a customer.
Businesses pay influencers fixed rates for the various types of content they provide - which in some cases brands have to pay in advance to creators regardless of the number of conversions they generate. Smaller influencers accept non-monetary compensation as well, in the form of free products or access to exclusive events.
Audience reach
Affiliate ads can reach a broader audience since they are present on multiple channels besides social media outlets.
On the other hand, influencer marketing is successful at targeting specific audiences, even close-knit groups. Moreover, creator endorsements generate valuable engagement from users, as well as the opportunity to interact with influencers to learn more about a product.
Diversity of channels
Affiliate marketers aren't necessarily active on social media. The reach of affiliate marketing extends beyond social media, since blogs, personal websites and even podcasts can advertise merchants' products.
The vast majority of influencers have built their followings on one or more social media channels and, therefore, successfully target young audiences. At the same time, very few publish content outside social media networks.
Content creation
Affiliate marketing's main focus is to drive purchases. These ads have a clear call to action and are explicitly promotional in nature. It is common for brands to provide affiliate marketing partners with banners, product images, logos and text links to their services and products.
Even though brands can provide guidelines to creators on how to maintain their brand's image and integrity, influencers tailor ads and promotions to their followers' tastes. The content they share showcases a brand's products in a more organic and relatable way.
Nature of relationships
Individuals and businesses join affiliate programs to promote other companies’ products and receive commissions. This relationship is more transactional and clearly aims to grow revenue.
As for influencer marketing, brands should pay more attention to vetting creators and forming relationships with them. The primary aim of influencer collaborations is to establish credibility and trust. The best way to accomplish this is to find individuals who represent the brand authentically and seamlessly feature their products.
Should Brands Integrate Affiliate and Influencer Programs?
Affiliate marketing and influencer marketing both have unique advantages, but combining the two can amplify your results. By leveraging both strategies, brands can extend their promotional channels and exposure, and reach multiple age groups and diverse customers. Influencers are highly successful at increasing brand visibility, recognition, and anticipation, but affiliates excel at growing sales. Combining both approaches allows businesses to accomplish more objectives simultaneously.
All in all, brands can achieve maximum reach and credibility by connecting influencers and affiliates, increasing the chances of reaching prospects at different stages of the buying cycle and resulting in more revenue and sales.
