Despite budgetary constraints and the global economic downturn, marketers have adopted a smart move to stay afoot in the influencer marketing landscape. Instead of shelling out upfront payments, marketers have adopted a sales-based payment model-an affiliate program for influencers.
Under affiliate influencer marketing, you compensate creators based on the sales made by the affiliate links — unique links or discount codes — included in the content. These promotional codes help in tracking conversions driven by each influencer. So that you only pay after the campaign goals are met.
“Sales-based payment models can offer significant advantages. For starters, they can reduce upfront costs, which allows for larger marketing campaigns. They also provide a safety net—if the campaign underperforms, you’re not saddled with high costs. Most importantly, it incentivizes influencers to deliver, as their earnings are directly tied to their performance,” says Harry Johns White, Marketing Manager, NBA Blast website in affable.ai’s Influencer Marketing Spring 2023 Report.
Nisarg Shah, CEO and Co-Founder, affable.ai agrees as he explains this hybrid model further in Your Digital Marketing Coach Podcast. He says “Influencers are amazing affiliates because they give you both the ability to reach a massive scale even if people don’t buy, and at the same time, they give you the ability to convert. So if I’m a brand wanting to work with influencers and give them products, I might as well create an affiliate program out of it. This could include trackable links or discount codes and, depending on the channel, other different strategies.”
“The affiliate as a channel gives brands more control as they are able to actually track dollar to dollar the return on the investment they’re making. Especially during recession times, it becomes very important because they want to spend on performance-based campaigns rather than just reach-based campaigns,” says he.
But like every influencer strategy, this one too has drawbacks to it. Affiliate influencer marketing might be a profitable solution for brands, but it can be an unfair practice for influencers. It can compromise content authenticity, discourage smaller influencers, and focus only on short term results.
In such cases, a hybrid payment model that combines elements of sales-based compensation with other metrics like reach or engagement may be more appropriate. A hybrid influencer affiliate program is a mix of fixed rate and performance-based payments. Under this model, you pay influencers for their time and effort in creating quality content and compensate them for every conversion they make.
“Not all influencers are open to being affiliates only. They are open to the idea of having a hybrid structure where you still have some sort of paid collaboration, and then you incentivize them with an affiliate strategy. Right now, what we are seeing in the market is brands and influencers are in a binary relationship. Brands push for pure affiliate collaborations, and influencers ask for purely paid collaborations. But the balance is where you merge it and hype,” explained Shah.
The affiliate influencer model is an excellent strategy to adopt if you want to run compelling campaigns on a budget. It empowers you to turn influencers into brand advocates and run always-on influencer campaigns, all while following a mutually-beneficial payment model.
This Weekly Shorts is written by the editorial desk of affable.ai