Instead of paying influencers a flat rate, many brands are using affiliate links to share revenue with creators who bring in customers.
- Affiliate links provide brands and influencers with a revenue-sharing model that rewards creators for the number of customers they can draw to the brand.
- Rather than paying creators a flat fee for social-media content, brands pay influencers a percentage of the conversions that come through the affiliate links.
- Micro-influencers with smaller followings could provide greater benefits for brands looking to prioritize conversion rates.
Why it’s news
Affiliate programs have become huge side business for many people and thus increasingly appealing to brands as they look to find new revenue streams and reduce costs in an economically uncertain market.
Of 3,500 marketers, more than half reported that they pay their influencers based on a percentage of sales, The Future Party reports. That is an increase from last year, when 42% said the same.
Just 19% pay their influencers through a flat rate. Last year, around 49% used this method.
Many brands are finding greater success with micro or nano-influencers. These content creators have smaller audiences—just a few thousand followers rather than tens of thousands.
Prominent influencers can bring significant attention to a brand, but companies have found that these smaller content creators have higher conversion rates. Micro and nano-influencers convert 45% to 50% more consumers than macro-influencers.
With smaller audiences, these content creators can feel more personal and trustworthy to their followers. This feeling of trust and a close relationship may make consumers more likely to purchase their suggested products.
Brands want creators who can help consumers on their purchasing journey, and the personal touch can be a valuable contributor to making a sale.