For a while now, companies have been hiring people to promote their products/brands in exchange for a commission, known as affiliate marketing.

The affiliate marketer gets a payment tied to realized sales. In turn, this creates an effective partnership, as both sides are motivated to put in efforts and monetize their work.

Affiliate marketing allows companies to effectively target and penetrate a market by selecting the perfect representatives for their brand. In the past, these people were usually traditional bloggers and general ads. However, today, we can spot another trend – using influencers as affiliates.

Before we get into details, let’s see why firms use affiliate marketing.

The Benefits Of Affiliate Marketing

According to Statista, U.S. affiliate marketing spending was recorded at $5.4 billion in 2017 and is estimated to reach $8.2 billion by 2022.

No doubt, it’s a significant increase compared to other industries. And it’s for a reason!

In continuance, you can find the top five ways how companies benefit from using affiliate marketing.

Low Costs

Affiliate marketing implies low start-up and ongoing costs. Affiliates develop their marketing content, so there is no need for an advertising team or renting space. Also, in commission-based programs, the company only pays the affiliates for the sales they generate. Consequently, there is a low risk of loss. So, it’s a win-win situation, especially for entities with tight budgets.

Targeted Marketing

The choice of an affiliate determines the audience he/she will attract. If the company makes a good choice of a representative, it will end up with targeted traffic, including individuals who are very likely to purchase their products.

High ROI

Compared to other marketing efforts, affiliate marketing has proven to deliver a higher return on investment. To understand why that is so, you need to think in terms of a cost-benefit analysis.

The costs are low, as they are tied to conversions. Also, the targeted traffic is very likely to accept the affiliate’s suggestions, especially if they are a person of influence. In other words, the costs are a portion of the benefits (conversions). So, the company always ends up with a profit.

Reputation

Apart from financial benefits, affiliate marketing can also bring a company a reputation boost. People are inclined to believe third party’s opinions. That’s why companies incorporate customer testimonials, reviews, and affiliates in their marketing strategies.

Flexibility

Last but not least, affiliate marketing leaves space for adjustment. More precisely, companies can quickly scale, either increase or decrease their marketing efforts, depending on their needs and resources.

Now that you are aware of the benefits of affiliate marketing let’s see how to achieve them.

New Influencer-Driven Way of Affiliate Marketing

As mentioned before, we can spot a shift in the choice of affiliates. But what led to this change of representatives?

The problem with using traditional bloggers and publishers as affiliates occurred because most of them forgot about the concept of a ‘top brand.’ More precisely, a significant number of affiliate marketers broadened their portfolios with famous brands, including even competitors, for increased income. In turn, many people stopped relying on their words and suggestions.

Traditional advertising no longer cuts it because customers today, especially the younger Gen Z demographics, base their decisions on trust. They want to believe that recommendations stem from true intentions and are not money or commission-driven.

The Concept Of Influencer Marketing

Influencers create a loyal following base on social media by providing creative and quality content. They form relationships with their followers based on trust.

A high-quality influencer will never recommend or advertise a product they wouldn’t use themselves. People are well-aware of this fact. Therefore, an influencer can be a perfect ambassador for a company.

Influencer marketing is also beneficial due to the way the affiliates promote your brand/products. They combine their review, guide for use, and call-to-action in a comprehensive post, such as an image, video, reel, Instagram story, etc. In other words, influencers, as affiliates, guide the customers through the entire sales funnel.

An Increase in Influencer Marketing

Make no mistake; influencer marketing has been around for decades. Do you remember Britney Spear’s $7–8 million promotional deal with Pepsi from February 2001? We can go even a few years back when former President Ronald Reagan became a spokesperson for Chesterfield Cigarettes.

Social media has further increased this trend. Platforms, such as Instagram, Tik Tok, or Youtube, have facilitated the process and provided an opportunity for almost anyone to implement influencer marketing at lower costs.

In other words, companies have spotted the potential in influencer marketing, and we have the stats to prove it.

Influencer Marketing Hub has surveyed over 5,000 marketing agencies, brands, and other relevant professionals to gather the following data:

• 90% of respondents consider influencer marketing as an effective marketing form
• 67% of respondents use Instagram for influencer marketing
• 75% of respondents intend to dedicate a budget to influencer marketing in 2021
• 65% of marketers increased their influencer marketing spending in the last year

Big Commerce has also provided some valuable stats:

• Instagram is the most important and impactful channel
• Instagram posts are the first most used format, Instagram stories are the second
• Snapchat is the least preferred channel
• Almost 90% of marketers consider influencer marketing’s ROI comparable to or even better than other marketing channels

According to Forbes, “Influencers Are The New Brands.” More precisely, MuseFind has provided data indicating that 92% of customers trust influencers, whereas only 47% use the traditional ad methods.”

Benefits of Influencer Marketing

Influencers are the perfect choice for affiliate marketing because they:

• Have the power to influence their followers based on trust
• Provide engaging content, adding value to your brand
• Give authentic insights in the form of user-generated-content
• Instantly present your brand to new audiences
• Produce high conversion rates

How To Choose An Influencer?

When it comes to choosing the right influencer for your company/brand, you need to consider several evaluation criteria. The most apparent factors include the number of followers, relevance, traffic, rating, and reputation.

In addition, we would recommend applying the following tips:

• Select an influencer that would typically use your brand/product
• Evaluate whether your and the influencer’s target audience are aligned
• Provide a content script for the influencer (at least at the beginning of your cooperation)
• Make sure they aren’t promoting your competition
• Set clear terms, objectives, and a timeline
• Avoid overly promotional content, go for a more discreet strategy instead
• Set up a proper tracking system for the commissions
• Consider offering exclusive affiliate rates to your top influencers

Final Thought

Without a doubt, we can say that influencers have changed the affiliate marketing game. Even so, this is not bad news. On the contrary, companies benefit from the influencers’ boost on their affiliate marketing strategies. The critical aspect in using influencers as affiliates is to choose the best representative for your brand. We are ready to help you out with affiliate software to make sure your every click, action and sale is tracked, recorded and counted.

Some would say, “The bigger the name, the better the deal.” However, that’s not entirely true. You need to be looking for an influencer that is most relevant to your brand, one whose audience is close to your target and would choose your brand, even without further promotion or commission.