Jon Claydon, Chief Development Officer at Acceleration Partners, discusses the trends and changes marketers need to stay on top of as technology enables them to integrate influencer marketing into their wider strategies, and measure campaign impact and ROI.
Over the past several years, influencer marketing has experienced explosive growth as brands seek out creators to help them increase revenue, amplify reach and target niche audiences – especially among young consumers. However, if the trend is going to keep up its meteoric rise, it needs to evolve to keep up with the marketing industry’s changing needs.
To run effective and profitable campaigns in the future, marketers need to keep an eye on these changes and adjust their strategies accordingly. Among the most important of these trends is the convergence of influencer and affiliate marketing.
Two worlds collide
In affiliate marketing, brands partner with online publishers to drive traffic. This can be through any number of partnership types, including content, loyalty, coupon, mass media, and more who are compensated after delivering on a desired action (eg sale, lead, new customer).
Influencers, on the other hand, are any online entities with a social media presence, particularly large followings on Instagram, YouTube, and/or TikTok. They’re typically compensated differently than affiliates, with these arrangements covering everything from free products to regular cash payments in exchange for developing content.
Until now, these two partnership marketing strategies have largely been kept separate. But as brands look to tighten their budgets amid an uncertain economy, they’ve started asking important questions about their influencer programmes’ efficacy and return on investment (ROI).
This is where the increasing emphasis on affiliate strategy comes into play.
A matter of metrics
There’s little debate about the broad effectiveness of influencer marketing. We’re all familiar with the “TikTok made me buy it” trend, after all, and this is backed up by the stats. A recent survey found 74 per cent of consumers between 18 and 24 rely heavily on social media influencers, while upwards of 90 per cent of Gen Z start their purchase behaviour by looking at influencers.
When it comes down to measuring the success of influencer programmes, however, things are less obvious. Until now, results have traditionally been judged in terms of so-called “vanity metrics” – things such as reach, engagement, social impressions and shares. While these can be valuable, especially if a campaign is focused on building awareness, it has always been hard to link these numbers to sales and deduce a true idea of ROI. Brands need a way of accurately measuring their bottom-line impact and understanding which campaigns are really paying off – and which ones aren’t.
Advances in technology represent a way to achieve this. New software tools can effectively integrate influencer marketing into affiliate marketing programmes, allowing brands to accurately attribute conversion and revenue from influencers. This helps them see what’s effectively driving sales to justify their spending on influencer marketing.
Influencer partnership marketing
With this new ability to close the loop on tracking outcomes, brands are better equipped to integrate influencer marketing into their broader partnership marketing ecosystem. This presents a huge opportunity for brands to leverage influencers’ reach to achieve marketing objectives, engage new audiences, and drive better results.
When integrated, influencer marketing and partnership marketing can amplify each other’s impact. Influencers typically have a well-defined target audience, so partnering with them can help brands reach their desired demographic more effectively. In addition, influencers already have a relationship of trust with their followers that can transfer to the brand they are promoting. This can lead to higher conversion rates and increased sales.
Influencers are also known for their ability to create authentic content that doesn’t feel like an ad, which makes them an ideal partner for promoting a brand, product or service in a relatable way.
Navigating influencers by audience size
Influencer marketing with macro-celebrities rarely spills into the affiliate space because they are typically paid fixed fees for guaranteed content. But when brands work with nano- and micro-influencers, influencer marketing and affiliate marketing intersect.
With the micro and nano segments, brands often use an affiliate-type commission or CPA model for compensation alongside, or as a substitute for, product gifting and fixed-fee arrangements. As macro conditions continue to push brands toward driving outcomes from their marketing initiatives, influencers themselves are broadly adopting affiliate compensation models as an alternative revenue stream to traditional compensation methods. Hybrid payment models (eg, cost-per-action + flat fee + product gifting) are becoming more of the norm.
Advances in technology now make it possible for brands to find, connect, manage and pay large groups of influencers at scale and hone in on what’s effectively driving sales, such as which influencers are generating the most conversions or originating purchase behavior that ultimately attributes to other channels. This frees up brands to focus on building stronger relationships with their roster of influencers and to analyse data to see the role and value a partner plays in the path to conversion. Investing in a platform that shows the waterfall effect and every step of the consumer journey is necessary to help make smart decisions on where to invest, especially with influencer marketing.
An intertwined future
It’s never easy to predict what lies ahead, but signs point to a path where affiliate and influencer marketing are very much intertwined. These industries are converging rapidly as brands realise there are ways to create more outcome-driven influencer programmes.
With the need for cost-effective marketing, the influencer marketing space will be more integrated with affiliate marketing and vice versa. Technology, new strategies and awareness will be critical for brands to take advantage of these two worlds combining.
Chief Development Officer