Influencer Marketing VS Affiliate Marketing

June 14, 2024
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12 Min
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Peter Nettesheim
| Author
Nicole Ryder
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How does affiliate marketing work?

Affiliate marketing leverages advanced technologies to track referrals and ensure affiliates are accurately compensated for their promotional efforts. This seamless process involves several key technologies working in harmony.

Tracking Links

Unique URLs generated for each affiliate to monitor their referrals. In most cases the link adds UTM parameters (Urchin Tracking Module) through which the conversion event can be tracked. 

Cookies

Small data files placed in a user's browser to record referral details and track user actions. Cookies allow advertisers to track conversion events even if the conversion event occurs at a later point. This happens for example if a prospective customer clicks on the affiliate link and looks at the website but doesn’t purchase right away. A couple of days later they complete the purchase. In that case the cookie saved in their browser is able to pass over the UTM (which is saved through the cookie) and the conversion can still be attributed to the respective affiliate / influencer.

Voucher / discount codes

Besides tracking links, personalized voucher / discount codes can be an effective way to increase attribution in affiliate marketing (more on attribution later). Each affiliate / influencer gets their own voucher code. Everytime this voucher code is being used at checkout the sale will be accounted to the respective affiliate. 

Affiliate Networks

Platforms that connect affiliates with merchants, providing tools for link generation, tracking, and reporting. Examples can be Influencer Hero, Awin or Refersion. 

Tracking Software

Monitors user activities, ensuring accurate attribution of conversions to the corresponding affiliates. These are software companies providing the tools for brands and affiliates to keep track of earnings. Examples are Influencer Hero, Goaffpro or UpPromote. 

Payment Systems

After the affiliate has earned his or her affiliate an important process is processing the payouts. Affiliate software providers often offer this feature within their platform.

How to track affiliate performance

If you decide you want to get started with influencer and affiliate marketing it is important to understand how you can track the affiliate performance of your influencers. 

Manually create UTM links and use Google analytics

One way to track the performance is by creating UTM links manually. Google for example offers this easy to use UTM builder through which you can create UTM links. The link would be long and doesn’t look great so we recommend to set up a redirect so you can create personalized links. It could look like this: www.mybrand.com/jessica. This links would then redirect to the UTM link you created. In most cases the easiest way to set up these redirects is within your CMS. This can be Shopify, Wordpress, Webflow or any of the other providers. Once you share the UTM link with your influencers / affiliates and they start posting you can track the performance in Google analytics. Follow the steps below to set this up. 

Log in to Google Analytics

Go to Google Analytics and log in with your account credentials.

Navigate to Acquisition

In the left-hand sidebar, go to Reports > Acquisition > Traffic acquisition. This report gives you an overview of how users arrive at your site or app.

Filter by Campaign

Use the filter option to select your campaign. You can use the search box to find specific campaigns tracked by UTM parameters.

Use the Explore Tab

For more detailed analysis, use the Explore tab to create custom reports. You can use dimensions like Session Campaign, Session Source/Medium, Session Default Channel Grouping, etc.

Set the Date Range

Ensure you set the correct date range to analyze the data for the period you are interested in.

Use affiliate marketing software to track performance with influencers

Tracking affiliate performance manually is time intensive and can be complex which is why we recommend using affiliate marketing software to keep track of things. These platforms provide the tools to create affiliate links, discount codes and also provide dashboards which can be accessed by both the brand as well as the affiliate / influencer. 

Best affiliate software to track performance with influencers

There are various options you could choose from. If you want to use affiliate marketing for influencer marketing the best options available are:

  • Influencer Hero
  • Go Affiliate Pro
  • UpPromote  

To read more about the best affiliate marketing software you can access our article here.

Tools used for influencer marketing

As previously mentioned affiliate marketing is used within influencer marketing and is thus only a small part within the whole process of influencer marketing. Influencer marketing often involves the following steps: 

  1. Influencer discovery 
  2. Influencer outreach 
  3. Campaign Management 
  4. Collecting the posts and UGC 
  5. Processing payments 

Each of these steps can be streamlined and automated using software. We recommend using an all in one influencer marketing platform where you can manage everything in one place. Some options are: 

  • Influencer Hero 
  • Upfluence 
  • Grin 
  • Aspire 
  • Tagger 

To read more about the best influencer marketing software access the full article here. 

Important metrics to analyze with influencer marketing

  1. Audience growth 
  2. Engagement rate: use our free engagement rate calculator
  3. Audience size 
  4. Fake followers: use our free fake follower check 
  5. Verified accounts 

Our data scientists analyzed over 10K commercial influencer post to determine the correlation between different metrics and conversion. You can access the full research on the metrics which impact ROI here.  

To analyze all the above metrics conveniently while browsing the web you can also use our free influencer audit chrome extension here

Attribution and tracking in influencer and affiliate marketing

What is important to understand is that attribution is rarely 100% in digital marketing. With affiliate marketing even when using the most advanced tracking tools there is always a part which gets lost. Some of the reason tracking is getting lost: 

Using a different browser

Imagine a prospective buyer sees an influencer posts and clicks on the affiliate link which is included as a link sticker in the influencer story post. The cookie is correctly placed in the browser. The prospect uses Safari on his or her Iphone. A few days later they remember about your product, open their laptop and complete the purchase. On their laptop they use Chrome as a browser which means that the cookie is not saved which disables the system to pass over the UTM link. The result is that attribution gets lost. 

Accessing a website without clicking on the affiliate link

A common way attribution gets lost especially when affiliate marketing is used with influencers is when the customer does not click on the affiliate link but accesses your website in a different way. 

This can frequently happen for example if the influencer also tags your Instagram next to adding the affiliate link in a link sticker on Instagram. A lot of people will go to your Instagram page first and access your website through your link in bio hence the affiliate link won’t be able to track. If you then also offer a discount directly on your website or through an email popup the customer might use that code in which case both the affiliate link and the discount code won’t be able to track the sale. 

Pros and cons of affiliate and influencer marketing

When we compare influencer marketing and affiliate marketing as separate marketing strategies we are referring to the more traditional affiliate marketing model where brands can sign up on platforms like Awin or Refersion VS Influencer marketing as a whole.

How to combine affiliate and influencer marketing to maximize results

The good news is that affiliate and influencer marketing are not mutually exclusive. Like we mentioned before, when it comes to affiliates, influencers can make great publishers. And an affiliate model can be a great way to compensate influencers. This approach combines the authentic engagement and trust of influencer marketing with the performance-based incentives of affiliate marketing. By merging these strategies, brands can build a performance driven influencer program. 

We often refer to the 80/20 principle in influencer marketing. As typically only a small group of influencers / affiliates you work with generate the majority of the returns it is recommended to keep your cost low in the early stages (first time collaborations with new influencers). The reason is that you ideally want to “test” influencers first to see if they are able to convert their audience into paying customers. Affiliate marketing is a great way to incentivise influencers and at the same time keep your cost low and hedge your downside. Offering free products + an affiliate commission is often a great way to ask for an initial post allowing you to analyze the data first before offering larger fixed payments. 

Once you identify your performing influencers you ideally want to build long lasting relationships with these influencers and welcome them as a brand ambassador. The larger the group of performing influencers the bigger your business. By continuously using affiliate links and personal discount codes you are able to continue to monitor the performance of your influencers and allocate budgets accordingly in order to maximize ROI. 

Conclusion

In conclusion, understanding the distinct roles and benefits of influencer and affiliate marketing is crucial for crafting a successful marketing strategy. While influencer marketing leverages the authenticity and reach of social media personalities, affiliate marketing focuses on performance-based outcomes with measurable KPIs. Combining both strategies can maximize brand visibility and drive conversions. By carefully selecting compensation methods and tracking performance through appropriate tools, businesses can optimize their marketing efforts and achieve their objectives efficiently.

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Traditional affiliate marketing platforms VS Influencer marketing platforms

Traditional affiliate marketing platforms are marketplaces which connect brands and advertisers with publishers. As a brand you can sign up on these platforms through which you will be included in their marketplace. Publishers can then find you on these platforms, see how much affiliate commission you offer and start creating content and publish articles around your product or service using a personal affiliate link to start earning commission. Examples of these affiliate marketing platforms are Awin and Refersion. 

Influencer marketing platforms on the other hand offer a more proactive approach enabling brands to source through a database of influencers and publishers and then contact these influencers for a partnership. These platforms are often structured to effectively manage these relationships and other aspects related to social media influencers like capturing the content and sending products. Examples of such influencer marketing platforms are Influencer Hero, Grin or CreatorIQ.

Influencer Marketing VS Affiliate Marketing

Influencer and affiliate marketing are often terms which are used interchangeably. They are both used to achieve certain marketing objectives but also have key differences. Influencer marketing is a broader term used to describe the process working with influential content creators and publishers while affiliate marketing is the technical method which is often used within influencer marketing to track certain performance KPIs based on which the influencer / publisher is compensated. To understand the differences better let's first take a look at the definition for both influencer and affiliate marketing.

Influencer Marketing Definition

Influencer marketing involves collaborating with influential individuals, known as influencers, who have a dedicated social media following and the ability to impact their audience's purchasing decisions. These influencers create and share content that promotes a brand, product, or service, leveraging their trust and rapport with their audience to drive engagement, brand awareness, and sales. This strategy focuses on authenticity and organic promotion to reach target demographics effectively.

Affiliate Marketing Definition

Affiliate marketing is a performance-based strategy where affiliates, typically bloggers, influencers or website owners, promote a company's products or services through unique tracking links. Affiliates earn a commission for each sale, lead, or action generated through their promotional efforts. This method relies on measurable outcomes and incentivizes affiliates to drive targeted traffic and conversions, making it a cost-effective way for brands to reach a wider audience.

Key differences and overlap between influencer and affiliate marketing

The key difference between influencer and affiliate marketing is that influencer marketing refers to the overall marketing process of collaborating with influencers whilst affiliate marketing is the technical process used to track performance based on which the influencer is being compensated. In short affiliate marketing is used within influencer marketing and thus can be part of influencer marketing.

These terms are often used interchangeably as the term: “building up an affiliate program” could refer to building relationships with “affiliates” which are often influencers, bloggers and publishers. 

Compensation

What is important to understand is that affiliate marketing can be a part of influencer marketing but doesn’t always have to be. Whether it does or not depends on the way the advertiser decides to structure their influencer program.

Different ways influencers can be compensated

  • Affiliate commission 
  • Fixed payments 
  • Free products 

These are the three main ways influencers can be compensated by brands and advertisers. It is frequent practice especially with larger more known influencers to work with fixed payments instead of affiliate commissions. The influencer gets a fixed amount for a certain number of posts promoting a brand's product or service. In that case affiliate marketing is not part of influencer marketing. 

In other cases brands might offer an affiliate commission in which case affiliate marketing would be part of that specific influencer marketing campaign as it  will be used to compensate the influencer based on certain marketing KPI’s. 

Different ways affiliates can be compensated

Affiliates can be compensated through various models, each tailored to specific marketing goals and performance metrics. The way this is structured often depends on the product or service a company offers. 

Cost Per Sale (CPS)

Affiliates earn a commission for each sale generated through their referral link. This model aligns with revenue generation goals, ensuring affiliates are rewarded for actual purchases. In most cases the brand or advertiser offers a % of the sale generated by the influencer or publisher. It is however also possible to offer a fixed amount for every sale generated irrespective of the amount of the order being referred.

Cost Per Lead (CPL)

Affiliates receive payment for each lead or potential customer they bring in, such as sign-ups or registrations. This method focuses on generating qualified leads rather than direct sales. This process is often used within B2B SaaS or B2B services as the conversion is more difficult to track if the process involves a sales meeting. 

Cost Per Click (CPC) 

Affiliates are compensated based on the number of clicks their referral link receives. This model aims to drive traffic to the advertiser's site, regardless of conversion.

Cost Per Action (CPA)

Affiliates earn a commission when a specific action, like downloading an app or filling out a form, is completed. This versatile model can encompass various performance metrics.

Each compensation method offers unique advantages and can be tailored to the specific goals and strategies of both the affiliate and the brand.

Bloggers VS social media influencers and affiliate marketing

Although the technical term “affiliate marketing” simply refers to the way publishers and content creators are being paid based on specific marketing KPIs, people often refer to traditional bloggers when talking about affiliate marketing. When the internet exploded the first big medium through which affiliate earned commission was through websites and creating content through a blog. Legacy platforms such as Awin for example still heavily focus on the traditional affiliate model which connects brands with website publishers (bloggers). 

With the rise of social media however a new form of affiliate marketing evolved. As video gained much more traction, content creators and publishers which focused on platforms such as Instagram, Tiktok and Youtube were able to capture the attention of people enabling them to monetise this attention through affiliate marketing. Youtubers for example simply add an affiliate link in the description box allowing their audience to purchase products or services through which the Youtuber earns a commission. Today the term affiliate marketing is not platform specific and can be on any medium. 

FAQs
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