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Influencer and Affiliate Marketing

Influencer marketing—a form of social media marketing that capitalizes on people or organizations with large followings who exert some sort of influence over others because of their expertise or charisma—has become both a marketing and a societal phenomenon. There were more than 3.7 million ads by influencers on Instagram in 2018, and some estimate that the market will reach US$10 billion by 2020 (Wired 2019). Ninety percent of Instagram campaigns in 2018 used micro-influencers, influencers who have somewhere between 1,000 and 100,000 followers (HubSpot 2019). Micro-influencers represent about 25% of the Instagram user base, or about 250 million people (Mention.com 2018). While most micro-influencers charge a few hundred dollars per post, top ones can charge upward of US$50,000.

Although influencers can be used throughout all RACE stages, they historically have been used as an awareness generation channel. Even today, most of the main objectives reported by brands for the use of influencers relate to the Reach stage, such as improving brand awareness, share of voice, reaching new audiences, and managing reputation (Fipp 2017). Over the last few years, there has been a trend toward moving marketing budgets away from top influencers to micro-influencers, who are believed to have a stronger connection with their followers and thus generate stronger engagement (Wired 2017).

Ideally, when planning for an influencer campaign, firms should aim to choose influencers who correspond to the size of their business. It is easier for smaller firms to create relationships with micro-influencers, and these individuals might support the firms’ goals if a trusting relationship can be established. To facilitate the internal management of influencer campaigns, it can be useful to create influencer personas, i.e., personas that represent the kind of influencer the firm should aim to recruit for their campaigns. Firms should aim to find influencers that align with their brand identity, can resonate with the brand’s customers, and can help the firm achieve their objectives (i.e., perhaps different influencers can help achieve different objectives, whether it is reaching a wide number of consumers, generating leads, or converting leads to customers). Firms should also support influencers’ efforts by providing marketing materials. Some influencers might want to work with firms to align the firm’s interests and objectives with theirs. For example, many influencers report only taking on clients that represent their values or whose products they already like. When choosing influencers, ask yourself:

  • Who are their followers? Are their followers my targets?
  • Are they real?
  • Do they release quality content? (That can be matched with your product?)
  • Have they worked with your category? With a competitor?
  • Do they promote products often? How do their followers react?
  • What platforms are they on?
  • Can you use their content?
  • How long does their content stay online?

Two main routes exist for recruiting influencers: using influencer agencies, networks, or platforms, which centralize interactions between a firm and many influencers or contacting influencers directly. If reaching out directly, make sure to send personalized messages that clearly show that you understand who the influencer is and why you see a fit between your brand and the influencer’s brand. Different influencers have different goals: some might want to push products they strongly believe in, some might want to be a positive influence on their followers, and some might be in it for the money (Kozinets et al. 2010). This should play a role in how you “sell” your campaign to an influencer.

The main payment structure for influencers is pay per post, which varies depending on the domain or the influencer. In 2017, according to influence.co, payments averaged US$217 per post, which could be broken down as follows, with influencers with fewer than 1,000 followers commanding 83$ per post and those with more than 100,000 followers, 763$ per post. Posts mediated by The Influence Agency cost more, ranging from 2,000$ to 10,000$ per post by influencers with more than 100,000 followers. Blog collaborations are priced by the number of monthly impressions the blog receives:

  • 10,000 monthly impressions: 175$
  • 100,000 to 500,000 monthly impressions: 500$
  • 500,000+ monthly impressions: 1,000$ to 5,000$

Other payment structures include pay per lead, pay per engagement (when a user performs an action associated with a post, such as a click, a comment, or a share), or pay per view.

Influencers like Zoella often create a revenue stream by participating in affiliate programs, an “agreement in which a business pays another business or influencer (‘the affiliate’) a commission for sending … sales their way” (Hubspot). There are many different approaches to affiliate marketing, such as comparison-shopping websites, coupon websites, email lists, or reward websites (Authority Hacker 2020). Affiliate marketing differs from influencer marketing in that it is overwhelmingly focused on the Convert stage: Since pay is typically associated with making sales, affiliates aim to convert people to sales. There are, however, affiliate programs that pay per lead (and hence participate in the Act stage) and others that pay per visit (and hence participate in the Reach stage).

Affiliate marketing works as follows: An advertiser, a company that sells a product or a service, offers to pay a third party (e.g., a blogger or a coupon website) to help them promote and sell products and services. The affiliate conducts online activities in order to sell products or services. For example, Figure 5.20 shows a blog post in which Zoella presents her “10 scary reads” for Halloween. Each book is associated with the affiliate program Reward Style. Let’s say a reader reads this blog post, likes the sound of a book, clicks on the link for that book, and purchases it: Zoella will then receive a small percentage of the sale for helping make this sale happen.

Figure 5.20 Affiliate Marketing Example

Described in text

You can typically easily identify whether a link is part of an affiliate program or not. For example, for Zoella, the link looks like this: https://rstyle.me/+U7XZh4aYDVf0s7elU5SykA. We can thus see that it is associated with the Reward Style program. Affiliate programs will create different types of links, which typically include the publisher (affiliate) website ID (or PID), the ad id (AID), and the shopper (or visitor) ID (or SID). This allows tracking of sales across publishers, ads, shoppers, and reward affiliates accordingly.

The two main payment structures that exist for affiliates are the following:

  • PPS (pay per sale): The advertiser pays the publisher a percentage of the sale that was created by a customer referred by the publisher (revenue sharing model).
  • CPA (cost per acquisition/cost per action/cost per lead): The advertiser pays only when an advert delivers an acquisition after the user clicks on the advert. Definitions of acquisitions vary depending on the site and campaign. It may be a user filling in a form, downloading a file or buying a product.
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