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Whether you’re a business owner or a marketing professional, you’ll probably have the same goals in mind. Ultimately, you’ll need to increase metrics like reach, engagement and retention in order to boost your brand’s revenue. The problem some businesses find is that they try to look for a ‘one size fits all’ solution. Unfortunately, that doesn’t exist.
Different businesses, products and even different goals all require alternative methods. Affiliate marketing and influencer marketing are both channels that can help you reach new audiences, increase brand awareness and boost sales. So, they’re very similar and they share many overlaps. However, there are some clear differences between them.
Here, we’ll break down those differences and help you to understand which could fit your business best (hint: you don’t have to choose just one!).
What is affiliate marketing?
Affiliate marketing is where you partner with other companies or individuals to promote your products or services, and reward them on a performance basis. These partners are known as affiliates or affiliate marketers.
Normally, you’ll pay affiliates a commission on any sales they help your business generate. However, you can also reward them at other consumer touchpoints, such as paying them each time they send a certain amount of traffic to your website, or each time their promotional activities lead someone to sign up for your mailing list.
Because you pay affiliates based on performance, affiliate marketing relies on being able to track the results of an affiliate’s promotions. In other words, you’ll need a way to understand which affiliates have helped you to achieve which sales. Otherwise, you won’t know which affiliates to pay, or how much to pay them!
To make this possible, the affiliate will normally get given a unique link. This is known as a tracking or affiliate link, and the affiliate will use it when they promote your product (in fact, affiliates are legally required to disclose affiliate links so that consumers know that they’re being advertised to).
When a consumer clicks the link in an affiliate’s promotion, a small file named a cookie ends up being stored on their device (sound familiar? You know, the pop-up on your browser which says ‘allow cookies’?). If that consumer then goes on to make a sale through the link, your business will be able to tell where that consumer came from so that you can pay the affiliate. Simple!
Affiliates can be both individuals or other organisations. They can also promote your products in many different places, from a blog or website to social media, paid advertising, email marketing or even just sending their tracking link to friends and family via WhatsApp!
What is influencer marketing?
Okay, let’s start with answering this question: what actually is an influencer? The term itself does get a little bit thrown about these days so it can be misunderstood.
An influencer is someone who has the power to affect the purchasing decisions of others – normally because they’re an authority on a specific niche and they have an active following. As you may have noticed, this is pretty vague – so, influencers can be anything from celebrities to individuals with a large social media presence, to bloggers. However, they’re particularly renowned on social media platforms like Instagram and TikTok.
Influencer marketing is when a business works with influencers (often through influencer marketing platforms like Upfluence and Klear) to leverage their reach and to utilise the power they have over their followers' purchasing decisions. This carries with it a whole lot of informational and branding potential, allowing brands to build credibility and to boost sales, as an influencer ‘influences’ their followers to purchase a product.
Let’s give you an example. This is Olivia. Olivia is living every Gen Z’s dream because she is a famous influencer. Olivia spends her time editing YouTube videos, answering emails and posting photos of herself captioned with #ad.
Now, for what we’re talking about in this article, the last part of that is the most important. Olivia often posts photos and videos where she is speaking about, or even wearing, a particular product. When she posts this, it’s likely that hundreds of her fans are going to go out and buy the same thing. That’s influencer culture for you.
As social platforms are notorious for influencers, influencer marketing is often a key part of a brand’s larger social media marketing strategy. To give you an idea how powerful this approach can be, the influencing marketing industry was set to be worth $13.8 billion in 2021, according to Startup Bonsai.
Where do affiliate marketing and influencer marketing overlap?
There is some overlap when it comes to the two different types of marketing. The first is that affiliate marketers can also be influencers, and influencers can also be affiliate marketers. In fact, the majority of affiliates will have a following and the ability to affect buyers purchasing decisions.
However, the affiliate marketers and influencers are different in some aspects because not all influencers are paid on a performance basis, which means that not all influencers are affiliates.
Influencers can be paid a flat fee for promoting your brand or product. They could actually end up signing a sponsorship or brand ambassador deal. Alternatively, they may agree to promote your product in return for a free or exclusive item. Lots of brands send influencers free products in the hope the influencer will post to their followers about it, but there’s no guarantee of this.
Social media isn’t always the best place for affiliate marketing, because it can be harder to pay influencers based on performance. There’s not always an easy way to tell whether a post or story has converted into sales. On top of this, platforms like Instagram restrict where you can post links, and you can’t necessarily rely on a tracking link to tell you how successful an affiliate’s promotion has been.
That said, it is something which is doable. For example, you could pay a social media influencer on an affiliate basis, such as per like or per follower. Want to know more about using affiliate marketing on Instagram? We’ve got a really handy guide which expands on this overlap.
What are the benefits and disadvantages of affiliate marketing?
Affiliate marketing is an extremely powerful tool. Saying that, it may not be the best fit for all businesses. Have a read of some of the benefits and disadvantages here.
- Low risk: With affiliate marketing, you only pay for the results you get. This means you don’t have to worry about the risk of spending money on an unsuccessful campaign.
- Low cost: Because you only have to pay for results, affiliate marketing tends to be very cost-effective once you’ve invested in actually creating an affiliate programme. In the UK, it has an ROI ratio of 1:16, which means for every pound spent on affiliate marketing, you get 16 back (according to Awin).
- Reach a targeted audience: With affiliate marketing, you can choose to work with affiliates whose niche and following matches your target audience, or who can help you to reach new markets. This means you can market your products or services to highly-targeted individuals.
- Easy to measure: One of affiliate marketing’s biggest strengths is that it’s centred around tracking and measuring an affiliate’s activities, with technology at the heart of its innovations. This means you’ll be able to understand which affiliates are bringing the most value to your business and analyse what methods are working best.
- Tried and tested: Affiliate marketing has been in the game for over 20 years now – read our dedicated guide to learn more about the history of affiliate marketing. There’s a reason it’s still around! Affiliate marketing is a safe bet as it’s been proven to work.
- Constantly growing: Even though affiliate marketing isn’t the new kid on the block anymore, it’s still growing and increasing in popularity. According to Hosting Tribunal, spending on affiliate marketing will grow by 10% in the next few years.
- Stiff competition: With so many brands out there, it can be hard to compete for the attention of the most successful affiliates. This means it can be time-consuming finding and reaching out to affiliates who may never get back to you.
- Lack of relevancy: Brands that use affiliate networks to find affiliate marketers and run their affiliate programmes can struggle with a lack of relevant affiliates available to choose from. Affiliate marketing relies on working with affiliates whose target audience closely matches yours, so this can be a big issue.
- Low-quality affiliates: Some affiliate marketers will use dishonest tactics to get consumers to click on their links and get a commission they don’t deserve. They may not disclose their affiliate links, or they may give out fake voucher codes to encourage clicks. To combat this, it’s important to set up a fair and robust attribution model and to choose the affiliates you work with carefully.
What are the benefits and disadvantages of influencer marketing?
Much like affiliate marketing, influencer marketing has both pros and cons - the most prominent drawback being the potentially high cost. Although we believe that the positives of influencer marketing tend to outweigh any negatives, it’s good to know what to look out for when deciding whether this type of marketing is the right fit for your business.
- Instant trust: If you manage to pair with the right influencer, instant trust could be a huge bonus for your business. More and more people are demanding to see a product or service being used in real life before they press the buy button. Influencers are a great way of easily showcasing your product or service in the real world. In fact, according to the Digital Marketing Institute, 70% of teenagers trust influencers more than traditional celebrities.
- Unparalleled reach: Social media has the automatic advantage over any of the other traditional types of marketing, purely because it can offer your business an unparalleled reach. Although not all influencers are on social media, ‘influencer culture’ and social platforms have become synonymous. Pretty much everyone has a social media account nowadays, so by partnering with social media influencers, your business could reach thousands, possibly millions, of people with little effort.
- Increasing in popularity: Influencer marketing is growing at a rapid pace. It was reported by Google Trends that people searching for the phrase ‘influencer marketing’ grows by 5,000% every single month (source: Startup Bonsai).
- Attainable for any brand: Influencers don’t have to have a huge following. Instead, micro-influencers who have as few as 1,000 followers on social media in a highly-targeted niche can be just as impactful for your business. This means there are influencers out there for every brand, no matter how big or small.
- Tailored to your brand and audience: By choosing carefully the influencers you work with, from their audience to the platforms they use, you can target an audience that’s highly relevant to your brand and product.
- Creates a shortened sale cycle: When you’re a business an individual hasn’t heard of before, they may have reservations about buying from you. However, when using influencer marketing to your advantage, the cycle between someone finding your product or service, and buying is made significantly shorter. It’s been reported that over 49% of consumers actually depend on influencer recommendations.
- Can be costly: Highly successful and popular influencers don’t come cheap. In fact, depending on how many followers they have, they could put a large dent in your bank account – if you want Beyoncé to post a paid partnership on Instagram, it will probably bankrupt you. However, smaller brands can still benefit from influencer marketing by finding micro-influencers in their niche.
- Fake followers: You might see that an influencer has 100,000 followers on Instagram and think they’d make a great partner. However, fake followers are becoming more and more of a problem on social media platforms. Influencers with a lot of fake followers will have little to no reach, which means your product or service won’t see any conversions. Be selective in the influencers you choose to work with. A massive giveaway is often found in their follower-to-engagement ratio.
- Harder to track and measure: Depending on your agreement with an influencer, influencer marketing is often harder to track and measure than affiliate marketing. If an influencer simply posts a picture of themselves wearing your product, you’ll find it hard to understand which of your sales relate to that promotion as there’s no tracking link to allow you to follow your consumer’s journey to a purchase.
- Riskier: Influencers aren’t necessarily paid based on performance (although they can be!). This means you’ll face a greater risk that you’ll end up paying for a promotion that doesn’t result in any conversions.
So, which one fits best with my business?
Now you’re up to date with the ins and outs of both affiliate marketing and influencer marketing. So, we bet you’re desperate to know: which one is the best fit for me? Well, only you can really make that call.
If you want a guarantee that you won’t have to pay for an unsuccessful marketing campaign, affiliate marketing may be your preference. After all, with affiliate marketing, you only pay based on performance, so you’ll only ever have to empty your pockets when you get the results you’re after. On the other hand, if you’re more concerned with building trust and brand credibility, then influencer marketing could be the right fit.
Just remember though that it’s not necessarily a case of choosing between the two. Influencers will often be happy to work on an affiliate basis. And many affiliates would also call themselves influencers.
In fact, affiliate marketing and influencer marketing can sometimes be even more powerful when you develop a marketing strategy that utilises them both. You can run more than one campaign at once, and you can give yourself the flexibility to make adjustments to your partner marketing plan depending on your short-term and long-term goals, and the ever-changing needs of your customers.
Affiliate marketing vs influencer marketing: Final thoughts
Both affiliate marketing and influencer marketing are effective ways of strengthening ROI and increasing sales and conversions when used correctly. However, both can also harm your business if managed badly.
The only way to make either marketing method succeed is to choose the right influencers and affiliates for your business – partners that are highly relevant and share your target audience. Which is where Breezy can help! Just book a demo to see how you can quickly find hundreds of potential partners that you can sort and filter based on relevancy, reach and more.