Brands looking to be successful, drive sales, and increase their market reach in today’s increasingly competitive market need to implement some form of affiliate or influencer marketing in their overall marketing strategy.
According to a survey by Rakuten, more than 80% of brands utilize some form of affiliate marketing. Additionally, an INC. survey found that 40% of US brands cited affiliate programs as their top customer acquisition channel.
Finally, a survey by Influencer Marketing Hub found that 66% of brands plan to increase their influencer marketing budgets and that they earn $5.78 for each dollar spent on influencers on average, with some even making upwards of $18.
But, not all brands are created equal and neither are the marketing strategies they choose to utilize. Though the two marketing strategies are similar in function, some key differences set affiliate and influencer marketing apart and make each a better fit for brands depending on their goals.
Today, we’ll cover the fundamentals and talk about the importance, similarities, and differences of these two marketing strategies and how they can help brands.
What Is Affiliate Marketing?
Affiliate marketing is when an affiliate signs up to an affiliate program that a brand offers — usually on an affiliate marketing network or platform like Refersion — to promote their products or services on a commission-based payment model.
The affiliate then promotes the products or services using a unique affiliate link provided by the brand, driving traffic to the company’s website. If the traffic consists of leads who purchase the product or service, the affiliate receives a percentage of the sale (commission).
From a business perspective, it’s a highly lucrative marketing strategy. It effectively expands the brand’s marketing team by hiring affiliates through third-party companies that receive commissions only after successful purchases.
What Are the Advantages of Affiliate Marketing for Brands?
By utilizing affiliate marketing, brands can reach new loyal customers in new audience markets they previously had no access to. According to a recent report by Awin, 37% of online shoppers made their first purchase from a brand using an affiliate link.
Additionally, the initial investments are minimal for brands looking to start an affiliate marketing program. Brands only pay their affiliates after successful purchases. This means that brands can effectively partner with multiple affiliates to promote their products and services at no added costs.
The customizable commission structures for affiliates are another benefit for brands that need flexibility. There are various commission structures in affiliate marketing programs, such as pay-per-purchase, pay-per-lead, or even per-click. Brands only spend money on guaranteed results by paying per-purchase.
Additionally, if brands want to incentivize affiliates even further, they can set up bonuses or tier-structured commissions based on performance. On the other hand, brands looking to simply drive brand awareness and exposure can pay affiliates commissions per-click to their website.
What Are the Disadvantages of Affiliate Marketing for Brands?
Although the benefits of running an affiliate marketing program are plentiful, there are things that brands should be mindful of.
For starters, brands can experience inconsistent results if they partner with multiple affiliates while not utilizing all the features and data that reputable affiliate networks offer. Additionally, if brands aren’t running their affiliate marketing programs on robust and respected affiliate networks, they run the risk of encountering fraudulent affiliate practices.
For example, this can be in the form of fraudulent bot traffic that imitates user clicks on affiliate links or purchases made using stolen credit card information that are then refunded or canceled at a later date.
What Is Influencer Marketing?
Influencer marketing is when brands work with creators (influencers) to endorse or promote their products in exchange for payment. Influencers have a dedicated social media following and are often seen as industry experts in a given niche. Promotions and endorsements often come in the form of branded content and sponsored posts on the influencers’ social media accounts.
Influencer marketing works because today’s consumers trust influencers much more than faceless brands. Influencers have taken the time and effort to build up trust with their followers, so their product endorsements hold much more value to today’s consumers. According to a report by Rakuten, an astounding 80% of consumers have purchased something that was recommended by an influencer.
What Are the Advantages of Influencer Marketing for Brands?
According to a report by Rakuten, an astounding 80% of consumers have purchased something recommended by an influencer. By partnering with the right influencers, brands can reach new and relevant audiences.
Brands can also save time as they don’t need to provide any content, as influencers know what resonates with their followers. Influencer marketing is a powerful tool for building trust and credibility that brands can use to raise brand awareness, reach new customers, and drive sales.
Brands on a budget can also benefit by working with micro-influencers that generally charge less than your average Facebook or Instagram sponsored post.
What Are the Disadvantages of Influencer Marketing for Brands?
Brands that partner with the wrong influencers can do more harm than good to both their sales and brand image. For example, if brands partner with influencers running too many promotions with too many brands, their efforts can come off as inauthentic. Also, though partnering with micro-influencers can be affordable, collaborating with respected influencers can be quite costly.
Affiliate and influencer marketing offers endless possibilities and benefits for brands. As a brand, knowing what your goals are will pave the way for your decision when choosing which one works best for you.
Regardless of your choice, Refersion makes managing and tracking your influencer and/or affiliate marketing programs simple and easy. Our goal is to grow your brand awareness and sales, providing you with all the support needed every step of the way.