Influencer marketing has seen a remarkable surge in recent years. Spending in the US, in particular, is expected to reach $5.14 billion by the end of 2023, according to Insider Intelligence research. Insider Intelligence also estimates that in 2023 alone, 78.6% of marketers will embrace influencer marketing, reflecting the growing recognition of this marketing strategy. And with a forecast growth of over 14% through 2025, the signs are clear: Influencer marketing is still rising.
Affiliate marketing, often closely associated with influencer marketing, is also being touted as an opportunity for broader growth within the space. However, the reality is slightly more complex.
One of the main challenges with influencer marketing stems from the fact that the majority of fees in influencer campaigns are paid in upfront sponsorship, rather than on a pay-for-performance basis. In addition, performance in affiliate marketing is usually measured based on conversion or sales metrics, but because influencer marketing campaigns typically use link tracking and conversion attribution across social platforms, quantifying their direct effect on conversion rates can be difficult. As a result, Partnerize found that there is less than 25% convergence between affiliate and influencer marketing.
How can marketers effectively work with influencers in the affiliate channel?
A multidimensional influencer strategy calls for the integration of affiliates and ambassadors. However, it also begs the question: How can marketers effectively work with influencers in the affiliate channel? Is it possible to collaborate on a pay-for-performance basis, and what methods work best?
The landscape of influencer strategy is shifting and, while exciting, it also presents some developmental challenges. As long as the focus remains heavily on sponsorship fees, the difficulty of precise measurement exists. It’s no doubt a shiny strategy, yet evidence to substantiate the success of various influencer strategies isn’t quite there yet.
Partnerize has long emphasized the need to target specific opportunities with influencers that fit your brand’s unique needs and demographic with a reach that can expand your audience and increase your possibility of conversion, rather than painting with a broad brush or taking a one-size-influencer-fits-all approach. Instead, more attention should be paid to the creator ecosystem by placing emphasis on long-tail influencers, who don’t command premium sponsorship fees but are actively seeking opportunities for fair compensation.
The “long tail” of influencers refers to nano- and micro-influencers, who typically have under 10,000 and 100,000 followers respectively. This segment is experiencing significant spending growth, with a remarkable 220% for nano-influencers and nearly 70% for micro-influencers, per Partnerize internal data, signifying an essential shift in the industry.
These smaller influencers present a unique opportunity for brands. Their willingness to work on performance-based commercial structures makes them valuable partners. Recent data underlines the significant value these micro- and nano-influencers offer to brands, transcending the traditional affiliate and partnership marketing models.
And working with these smaller influencers comes with many benefits. First, they often have higher authenticity and trust built with their audience, a vital factor that shouldn’t be underestimated. Second, engagement rates are more favorable, especially among those with under 10,000 followers; they also provide niche-specific audiences, offering the benefit of built-in, dedicated followers. Finally, they are cost-effective, offering competitive ROI.
As the influencer market continues to evolve, the opportunities and challenges are becoming equally more apparent. While the integration of affiliate and influencer marketing presents some obstacles, the rise of micro- and nano-influencers offers new pathways for authentic engagement and cost-effective strategies. The future of influencer marketing appears bright, with the potential for innovative approaches that embrace the unique attributes of the ever-expanding influencer landscape.
For more information on how Partnerize can help you navigate your influencer strategy, reach out to us at email@example.com.
—Maura Smith, CMO and Global Vice President, Marketing, Partnerize
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