Influencer marketing has quickly become one of the top ways for brands to target their ideal consumers, and it’s no surprise why. According to McKinsey, influencer marketing programs generate two times the sales of paid advertising, and Deloitte found customers acquired through influencer marketing programs have a 37 percent higher retention rate.
But while more and more brands are tapping into the power of influencer marketing, a crucial question remains: What’s a better model, affiliate or sponsored influencer marketing? The short answer is, there are pros and cons to both, and of course, it also depends if you’re on the brand or influencer side. Here’s a brief breakdown of the options and the pros and cons:
Affiliate Influencer Marketing: The Pros
With affiliate influencer marketing, brands compensate creators for each transaction generated by the creator’s own marketing efforts. Brands using this model pay creators a commission on the sales they generate, meaning creators must drive traffic that ultimately converts to earn a payout from their brand partner. From the brand side, affiliate influencer marketing can be a great option if budgets are tied purely to direct responses, or if a brand is testing a new type of creator relationship for the first time. A brand only pays a creator for the sales they generate for the brand in this model.
For creators, an affiliate model allows for more flexibility, as they’re not obligated to disclose the content they’re producing is sponsored. Once a creator receives an affiliate link, they can post it to numerous times throughout the link’s lifetime, to continue driving traffic to generate sales and commissions. This also means creators have the opportunity to make a lot of money off an affiliate deal, if they’re good at driving conversions.
Affiliate Influencer Marketing: The Cons
With affiliate influencer marketing, brands have less input and control over a creator’s content. Brand and creators agree to guidelines for the relationship, but brands oftentimes have minimal purview into how and when their product is being featured or the opportunity to see the content before it goes live. This can be risky and lead to a misrepresentation of the brand or incorrect product information. Affiliate influencer marketing programs also require a certain level of management and “policing” to ensure links aren’t being posted outside of the placements specified by the brand.
For influencers working with an affiliate model, the primary con is that they’re only paid if/when they produce a sale. Creators won’t be compensated for their time spent researching, creating or distributing content. Payment requires their audience to click on the affiliate link, so content can sometimes come off as overly promotional, with a lot of “click now” calls-to-action versus a more organically incorporated feature. Not receiving what their video content is worth can be frustrating for creators, making future collaborations more difficult to secure as a result.
Sponsored Influencer Marketing: The Pros
Sponsored influencer marketing allows brands to pay flat fees to creators rather than making payment contingent on a sale. For brands, the major pro of this model is that it allows for greater creative control of sponsored content. Brands and creators work collaboratively to create content that fits both their needs, and brands can feel confident creators will be distributing on-brand depictions of their product in a highly organic way. With this method, it’s not atypical to see high view counts, with high click through and conversion rates as well.
When brands work through the Grapevine platform, not only do they have the opportunity to converse with creators to ensure they’re both on the same page, but also view unlisted content before it’s live for the public. Creators are only human, and sometimes it takes a second pair of eyes to identify small tweaks/changes that can make a big difference for a brand.
The big pro for influencers working on a sponsored model is that they’ll be paid for all of their time spent working for a brand (not just for the sales they bring in). It also allows creators to get more creative with the way they incorporate products into their videos, which typically results a more organic video with better performance. Sponsored models also have a tendency to spur ongoing relationships between brands and influencers, rather than one-time partnerships. This can result in a more supportive and trusting content creation process for both sides, and a more profitable business venture for creators.
Sponsored Influencer Marketing: The Cons
For brands, there’s really only one con to sponsored influencer marketing: it costs more upfront since it requires paying influencers a one-time, flat fee versus only paying if/when creators close a sale. It can (understandably) be a scary investment to make – with flat fees, there’s the potential to lose an investment if a video doesn’t perform. However, that’s the exact reason why we chose to build the Grapevine platform – to give marketers the tools they need to feel confident in their influencer marketing decisions. We utilize data and analytics from historical performance and match that up with contextual data from our team of influencer marketing pros to match brands with the best creators for their goals.
For influencers, working with a sponsored model means they’re required to disclose their content is sponsored. There is a subset of every audience that is adverse to sponsored content, but there are also far more who understand creators need to make money to support their channel! Many creators and brands also view upfront disclosure of sponsorship as more beneficial than eluding to or excluding that creators are making money off of the purchases their audience is making.
What’s Right for You?
Making the choice that’s right for your business depends on your goals. If you’re willing to relinquish a certain amount of control of your branding and how your product is being promoted, an affiliate model could be right for you. If you want more flexibility, and are looking to build a long term relationship with creators, flat-fee sponsorship may be more your speed.
At Grapevine, our business favors the sponsored influencer marketing model because of the security if offers to both brands and creators. Relationships are created easily and able to flourish in the sponsored influencer marketing space. It’s “safe” for both brands and creators. But, we know we aren’t always right…
We turned to someone who knows both sides of the fence well – Morgan Simon, the Senior Marketing and Business Development Manager at Schaaf-PartnerCentric (SPC), an Affiliate Marketing Agency that also supports influencer marketing via a new program they call REACH.
We asked Morgan about SPC’s stance the topic of affiliate vs. sponsored influencer marketing, and she described to us their agency’s approach, which incorporates a blend of the two. “We find that engaging with a publisher in a sponsored influencer model initially, then partnering with them in an affiliate model ongoing can be a good option, as true influencers can be difficult to recruit as affiliates initially,” says Morgan.
At the end of the day, the model that works best for each brand is determinate on their goals – here’s our recap of the pros and cons:
Affiliate or Sponsored Influencer Marketing on the Web
When we look at the industry, it seems like the tides may be shifting toward influencer sponsorships, rather than affiliate deals. Pinterest recently banned all affiliate links on their platform, as they felt the model was harming users’ experiences with too many link redirects, irrelevant Pins and broken links.
On the influencer side, a recent survey from GroupHigh found that nearly 70 percent of influencers prefer monetary compensation over free products, ads or affiliate deals, and only 3.6 percent of influencers prefer affiliate models.
Still, we recommend walking through the pros and cons of both affiliate and sponsored influencer marketing before signing any deals. Because, while we at Grapevine use and recommend the sponsored approach, it behooves brands and influencers alike to understand the financial and creative implications of both and select the model that best meets their current needs.
Have any thoughts or tips to share on the topic of affiliate or sponsored influencer marketing? Tell us below!