How Influencer Marketing is Shifting to an Affiliate Model

Traditionally in affiliate marketing, brands have experienced challenges trying to run influencer marketing campaigns within the affiliate channel. Over the past couple of years, we have seen the demand for influencers rise. As influencer marketing has emerged as a viable marketing channel, brands are wanting to capitalize on it. However, in their effort to incorporate influencers into their marketing mix, brands have run into several challenges in trying to marry these efforts within their affiliate marketing strategies.

Influencers want (and deserve) to get paid for their work, and have typically required an upfront, flat fee payment or free product. Depending on the influencer, these fees can be quite large. Many small- and mid-sized brands may not have the budget for this; smaller sized brands are often more hesitant to spend such a significant amount of money on a marketing channel that leans more heavily on brand awareness versus performance tied to a specific action.

Another difficult challenge for brands looking to run influencer marketing in their affiliate programs is that there are specific return on investment (ROI) goals they are trying to hit, which are usually centered around sales. In influencer marketing, the focus is often on helping brands raise their brand awareness (top-of-funnel), and not on driving bottom-of-funnel sales.

Due to the realities of COVID-19, many brands have had to adjust their goals and overall growth strategies, while taking a much closer look at their marketing channels than ever before. Through this process, many brands have been reallocating their marketing budgets toward initiatives that have more assurance of returns. Influencer networks are recognizing this and have begun to evolve around the concept of performance to help address brands’ increasing ROI expectations.

The Rise of Influencer Networks

Influencer networks are companies that can offer a breadth of resources, giving brands access to thousands of influencers. Before being allowed to join a network, each influencer is thoroughly vetted. This partnership setup can save brands the extensive time and effort it takes to search for individual influencers that they deem to be the right fit for their unique audience.

If influencer networks sound very similar to sub-affiliate networks in affiliate marketing, that’s because they are. Looking at them through this lens, influencer networks can be thought of as niche sub-affiliate networks, where the influencer serves as the affiliate.

A key difference between sub-affiliate networks and influencer networks is that sub-affiliate partnerships have traditionally been performance-based, whereas partnerships with influencer networks may not be. However, this is starting to change.

COVID-19 Impact

COVID-19 has encouraged brands and retailers to drastically rethink where their money is being spent—particularly their marketing dollars.

While top-of-funnel brand awareness channels, such as influencer marketing, were a nice-to-have pre-COVID-19, many brands have come to the realization that it’s critical to focus marketing spend on bottom-of-funnel channels at this time.

This is especially true of marketing channels where payment is made only after a desired outcome has been driven. As such, many companies have significantly shifted their marketing budgets to affiliate; some channels, like influencer marketing, are feeling the impact.

The Evolution of Influencer Networks in Affiliate Marketing

Prior to COVID-19, influencer marketing leaned more on leveraging influencers to drive brand awareness and tap into their targeted audience.

Now, to stay relevant in a shifting economy, influencer networks are starting to see that fewer companies are inclined to pay high fees on a channel where results aren’t tied to specific key performance indicators.

So, influencer networks must adapt. For some, this will mean being more flexible with their payment terms to accommodate performance-based compensation models. These evolving influencer networks are creatively and diligently working to meet the needs of both their influencer clients and their brand partners. Hybrid payment models (e.g., cost-per-action + flat fee + product gifting) are becoming more of the norm.

Client Success with Influencer Networks in Affiliate

Acceleration Partners (AP) has helped clients successfully partner with influencer networks on a performance basis.

Fitness Brand and Influencer Network Partnership

A fitness brand, whose affiliate program is managed by AP, has traditionally focused on working solely with content affiliates. The brand was also following the trends within influencer marketing and decided that this fit into their strategy. After evaluating several options, the brand chose to partner with an influencer network that was able to work via a competitive cost-per-action (CPA), requiring no high upfront fees and basing decisions on highly sophisticated, data-driven processes.

This influencer network uses proprietary artificial intelligence tools to pinpoint the right influencers for the brand based on their target audience and demographics, and creates a unique, customized pricing model for each partner. The brand was also willing to be flexible to maximize the partnership with the influencer network, agreeing to a CPA that is more than three times their standard rate. Since the brand did not have to occur any high upfront fees or provide free product, this reduced risk for the brand.

The influencer network and fitness brand spent quality time together at the start of the partnership setting goals and expectations, and having open, honest dialogue.

The primary goals set included:

• Scaling their content program while staying within their budget.
• Raising brand awareness in an organic way.
• Increasing revenue with clear transparency into Return On Ad Spend.

The results the influencer network drove for the brand surpassed expectations. The partnership generated over $500,000 in revenue during the length of the campaign, and the influencer network has become one of the brand’s top five partners in their affiliate program.

The influencer network was also willing to be accommodating and adapt as the partnership progressed. They were transparent with the brand about performance, sharing which influencers were driving results and which were not, and provided insight into each piece of influencer-created content that was published.

Women’s Intimates Brand and Influencer Network Partnership

Another Acceleration Partners client, a women’s intimate apparel brand, has an affiliate program that is predominantly comprised of content affiliates. Similar to the fitness brand, this brand’s goal was to continue to find a delicate balance between brand awareness and revenue growth, while strategically selecting partners that were in line with their audience. This led the brand to partner with one of the industry’s leading influencer networks.

This influencer network has been able to uniquely partner with brands within affiliate on a percentage of sale basis, essentially bridging the gap between what had been two disparate marketing channels. This influencer network requires a higher than average CPA (typically 15% or more) to be part of the platform, along with flat fees when brands opt into targeted placements and influencer campaigns.

Much of the brand’s promotion strategy centers around seasonal, holiday and key company events. Due to budget limitations, the brand chose to run a few short campaigns with this influencer network. In September 2020, the brand launched an anniversary campaign, purchasing a few flat fee placements, including email sends and display ads. The network worked closely with the brand to understand their campaign goals and select the right target audience, relying on data from past campaigns to ensure they were properly aligned.

The results were much higher than expected—the display ads increased the brand’s revenue by 26%, and the email send resulted in a staggering 1,000% increase in revenue during the campaign timeframe. The brand now considers this influencer network partner key to their overall affiliate strategy, and they turn to this partner any time they are looking to promote special events or new product launches.

They have found that open communication and alignment on goals is key to a successful partnership.

What’s Next for Influencer Marketing?

Ultimately, it all comes down to flexibility and the ability to adapt to a rapidly changing landscape.

Influencer networks that want to stay relevant and meet the evolving needs of companies are gravitating toward performance-based partnerships. The ones that will be most successful in years to come will embrace customized solutions, clear communication and performance that’s easily tracked and tied to brands’ goals.

Want to learn more about influencer marketing and how you can bring it into your affiliate program? Contact our team!