Affiliate marketing and influencer marketing are among several strategies brands use to reach potential customers. Both involve outsourcing marketing to third parties and, when done right, can drive sales, generate leads, and build brand awareness.
However, the two marketing strategies are very different in their approach. Brands also compensate affiliates differently from influencers.
If you’re a brand or an aspiring online marketer confused about these two, then you’re in the right place. In today’s article, we’ll discuss the difference between affiliate marketing and influencer marketing. You’ll also see practical examples of both.
How does influencer marketing work?
Influencer marketing is a digital marketing strategy that involves partnering with influential social media personalities who have substantial followings on one or more social media platforms to promote your business.
In exchange for a lump sum or, in some cases, merchandise, an influencer will willingly promote your products or services to their audience. These marketing campaigns, in combination with the persuasive power of social media influencers, give your company brand exposure that ultimately results in leads or sales.
The point of influencer marketing is to leverage the trust an influencer has built with their audience. Influencers typically hold a degree of sway, so if they promote a product, their followers will likely trust their recommendation. For this reason, influencer marketing can be an incredibly powerful strategy for lead generation or to raise brand awareness.
Italian blogger and fashion designer Chiara Ferragni is an example of an influencer. She has 29.5 million followers on Instagram. She occasionally promotes other companies’ products.
From a brand perspective, you must choose the right influencer for your influencer marketing campaigns to work. For starters, there needs to be an audience overlap. The influencer’s audience should mirror your ideal customer profiles. They must also have genuine followers and decent social media engagement.
Another factor crucial to understanding how influencer marketing works is the type of influencers you can work with. There are four types of influencers, each distinguished by their follower count.
Nano influencers
Nano influencers have between 1000 and 10,000 followers. Their modest followership makes them the most affordable influencer you can partner with. Nano influencers are usually in the early stages of building an audience.
Micro-influencers
A micro-influencer has followers whose headcount falls between 10 and 50,000. While you don’t need a substantial budget to partner with them, their audience size is nevertheless indicative of a progressing career.
Macro influencers
A social media personality with between half a million and a million followers is a macro influencer. Even though they aren’t the most expensive influencer, they can charge significant fees. However, they provide significantly higher brand awareness, making the investment worthwhile.
Mega influencers
Mega influencers have over one million followers. You’re basically in the celebrity range at this point. As you can imagine, you’ll need deep pockets to work with these influencers. Kylie Jenner is the perfect example of a mega influencer. At the time of writing, she has 398 million Instagram followers. As of 2018, Ms. Jenner charged up to $1 million per paid post.
Choosing the right influencer marketing pros for your campaigns will depend on factors like your budget and whether your audiences align.
For an aspiring online entrepreneur, the different types of influencers show that you don’t need millions of followers to start making money. You can do it with an engaged audience of just a few thousand.
Benefits of influencer marketing
Influencer marketing offers several benefits, including the following.
Increase brand awareness
f you’re a brand new player in a market, influencer marketing offers the quickest way to build brand awareness from nothing. An influencer’s product plug or brand mention can arouse curiosity about your offering.
Market to an already engaged audience
When using influencer marketing, you can bypass the arduous task of building an audience from scratch. The influencer comes with an already engaged audience for you. Thus, you simply compensate them for exposing your brand to their followers.
Gain credibility
Influencer marketing lets your brand tap into the trust the influencer has built with their audience. As such, your brand will appear more credible in the eyes of your potential customers, letting you bring in leads and boost sales.
Long-term partnership potential
Influencer marketing doesn’t have to be a one-and-done affair. If you have a substantial budget, you can create brand ambassador programs to tap into an influencer’s star power over an extended period.
Stellar results
According to recent surveys, influencer marketing provides $5.20 for every $1 you spend. That’s good ROI and one of the most impressive benefits of influencer marketing.
An influencer marketing campaign can be a quick means of increasing brand awareness. But let’s now look at what affiliate marketing has to offer.
How does affiliate marketing work?
Like influencer marketing, affiliate marketing involves partnering with digital content creators to promote your products or services. The major difference is that the people who sign up for (and create content around the goods and services) your affiliate program don’t have to be influential. Almost anyone with a website or social media account can be an affiliate marketer.
Companies incentivize their affiliate marketing campaigns by paying affiliates a commission whenever the affiliate’s marketing efforts result in a specified action.
You can read about the two most common commission arrangements in the following paragraphs.
Pay-per-sale model
A pay-per-sale affiliate marketing program pays the affiliate a percentage of a product’s sale price when a customer purchases based on the affiliate’s referral. It’s common for product-based companies to pay affiliates in this way.
GetResponse offers a pay-per-sale commission arrangement, for example.
As an affiliate, you can earn 40%-60% of the subscription fee the customer you’ve referred pays every month for up to 12 months.
The program has a 90-day cookie window, meaning affiliates will earn a commission if the customer purchases within 90 days of visiting the GetResponse site through their link.
Pay-per-lead model
Pay-per-lead affiliate marketing is common with service-based businesses. It’s a performance-based marketing strategy that involves paying affiliates who generate leads for your business.
Unlike pay-per-sale programs, the leads don’t have to pay for a service before the affiliate becomes eligible for the commission. Getting the lead to click through the affiliate link will suffice. Brands can either pay affiliates that help generate any type of web traffic or make their commission payouts contingent upon whether they send qualified leads.
Brands can either create affiliate programs and have that direct connection with their affiliates or join an affiliate network like CJ Affiliate and Awin. That also means that affiliates have two options. You can join the affiliate programs of all the companies you want to promote or sign up for an affiliate network, giving you access to multiple affiliate programs at once.
Typically, the affiliate marketer gets an affiliate link that helps them (and the brands) track the number of leads or sales their marketing efforts generate.
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Benefits of affiliate marketing
Affiliate marketing strategies can benefit businesses in various ways.
Result-based payment
Affiliate campaigns are excellent because payouts are contingent on results. Unlike influencer campaigns, you don’t have to pay your affiliate marketers upfront. Only when their efforts result in sales, clicks, leads, etc., do you compensate them. This arrangement means you can reduce costs and channel the savings into other paid advertising options to increase revenue.
Pay from your sales
This benefit is specific to pay-per-sale affiliate marketing. Since the model means that your affiliates get paid when their efforts result in a sale, their commission payments will come from the customer’s purchase. As such, you can pay the affiliate their commission without significantly impacting your operational costs.
More opportunities for reach
Unlike influencer campaigns, which are typically confined to social media posts, an affiliate marketing campaign can take multiple forms, including search engine marketing, social media marketing, email marketing, and more. This arrangement gives your products or services increased brand exposure, as your affiliates can do their brand promotion almost anywhere on the web and in any given niche.
Straightforward KPIs for measuring success
Unique referral links are central to affiliate marketing, as they help track affiliate sales and leads. When an affiliate’s audience buys through their unique referral link, it leaves no doubt as to whether they’re eligible to receive a commission. Similarly, you can easily see how a pay-per-lead campaign performs without relying on vague metrics like website traffic.
Affiliate marketing offers many other benefits and is worth considering if you have a limited marketing budget.
Affiliate marketing can be a better career for online entrepreneurs than influencer marketing because you don’t need to be influential to get started. Read our step-by-step affiliate marketing guide to learn more about it.
Fundamental distinctions between influencer marketing vs affiliate marketing
Here are a few more fundamental differences between affiliate and influencer marketing.
Purpose
We’ve mentioned that affiliate and influencer marketing can result in sales and leads. While that assertion is true, the two strategies tend to serve different purposes.
In the case of affiliate marketing, the purpose is to drive leads when you’re a service-based business and sales when you’re a product-based one. You’ll use those two metrics to measure whether or not your program is successful.
In contrast, the purpose of most influencer campaigns is to create awareness. This goal makes influencer marketing suitable for new brands or promoting new product lines.
Businesses usually require both affiliates and influencers to scale their growth, so there isn’t much of a choice here. It’s more about finding a good balance and integrating the two.
On the other hand, if you intend to be a marketer, you’ll need to think about this – influencers get a guaranteed lump sum upfront. This is great. However, with affiliate marketing, you can earn recurring commissions for many months/years to come.
Target audience and platform
As previously mentioned, influencer marketing and affiliate marketing happen on separate platforms. The former happens on social media sites like Instagram and YouTube.
Meanwhile, affiliate marketing can happen on almost any platform you can think of, including social media sites (including Pinterest), emails, and personal websites. This gives the affiliate more ways to promote their affiliate links.
Naturally, the two strategies target audiences at different stages of the customer journey.
In the case of influencer marketing, the audience is at the awareness stage of your marketing funnel. In other words, these people know they have a problem and are looking for products to solve it.
In contrast, affiliate marketing targets prospects closer to the purchase stage of a marketing funnel. These customers are on the verge of buying and are trying to choose between multiple offers, yours included.
Cost
Finally, the cost of creating an affiliate marketing vs influencer marketing campaign distinguishes the two marketing strategies.
With influencer marketing, you’ll have an upfront cost in the form of the influencer’s fee, which you may pay all at once or in tranches.
Also, how much you spend on influencer marketing is based on the addressable market, i.e., how many people you want to reach. This will influence the type of influencer you’ll use, i.e., nano vs macro-influencers, and the number of influencers you’ll use.
Affiliate marketing is the slightly more cost-effective option since most payments are contingent on the affiliate producing pre-specified results. For example, if their marketing doesn’t result in a sale, you won’t have to pay a dime in commission.
But how much of the sale should you give away as commissions? This will depend on various factors, including brand recognition. For example, Amazon has a massive brand presence, so it can get away with smaller affiliate commissions. For brands with little brand presence, offering competitive commissions is crucial to the success of your affiliate program.
Learn more about the major differences between affiliate and influencer marketing on our marketing podcast – Operation: Automation:
Examples of influencer marketing and affiliate marketing differences
In this section, let’s examine some examples highlighting the differences between influencer and affiliate marketing.
Canva
Canva is one of the most popular graphic design tools. The platform utilizes both influencer and affiliate marketing to get in front of its target audience.
Canva uses different types of influencers for their influencer marketing campaigns. However, none of these partnerships is quite as remarkable as their collaboration with Guy Kawasaki, the famous marketing specialist. Guy Kawasaki joined Canva to become their Chief Evangelist.
In addition, Canva rolled out an affiliate program to promote its premium plans.
This program allowed others, including bloggers, to earn commissions from their marketing efforts. Above is a blog post with affiliate links reviewing the Canva design tools.
Adidas
Adidas is a big name in the sports and fitness industry. The brand partners with all kinds of influencers, from smaller-to-medium Instagram and TikTok influencers to celebrities and football stars like Lionel Messi.
The Adidas partner program allows online marketers to earn commissions for each sale they send to their official website.
The program also allows marketers to promote the products on personal blogs and social media.
In conclusion
Influencer marketing is excellent for companies that need to establish credibility and get in front of large audiences fast. However, you must choose the right influencer to run successful campaigns.
On the other hand, affiliate marketing is excellent for brands that want to attract more leads that are either ready or close to converting. However, you must create a competitive affiliate program to attract the best affiliates.
For aspiring online entrepreneurs, both influencer and affiliate marketing offer viable options to make money online. You can get started with influencer marketing with just 1000 followers on your social media account as long as the audience is engaged. Affiliate marketing also has a relatively low barrier to entry. You can start with social media channels like YouTube, which could be cheaper than running a blog.
There you have it. That’s how affiliate marketing and influencer marketing are different.
FAQ’s
What are the disadvantages of influencer marketing?
Influencer marketing can be costly, especially if you decide to work with a macro or mega influencer. Additionally, you need to be careful not to fall prey to fraud, as some influencers inflate their follower base using fake followers.
Can you use affiliate and influencer marketing simultaneously?
Yes, you can run an influencer marketing campaign while getting affiliates to market your product or service. Having both marketing strategies will give your brand more reach.
Which is better? Creating a proprietary affiliate platform or joining an existing network?
Both options have their pros and cons. The benefit of owning your platform is that you don’t have to adhere to an existing platform’s rules. However, it can be expensive to build and maintain. Meanwhile, joining an existing network means you don’t have to deal with the costs associated with platform ownership. The disadvantage of exercising this option is that your program will be at your chosen network’s mercy.
