Category: Affiliate Marketing Tips

How influencer marketing is changing the way brands advertise

The popularity of influencers and creators is constantly on the rise across the digital marketing landscape. 

Influencer marketing continues to be a trending topic for online retailers and brands, with over 75% of marketers investing budget for 2022, and influencer budget expected to represent 17% of all ecommerce spend by 2025.  

This trend has resulted in significant changes to advertising strategies. To understand why, let’s first look at what influencer marketing is.

Defining influencer marketing

Influence does not necessarily equal popularity. Popularity suggests large followings, subjecting content to a big audience. An influencer or creator is someone who can affect consumers’ thinking or behavior. They have developed a rapport with their audience, and the audience trusts their opinion and authority for authentic recommendations. The basic principle is as follows: An influencer says, ‘Buy this product.’ The consumer is then compelled to go out and make the recommended purchase.

While some creators are quite popular and come with large followings, micro-influencers (those with smaller, niche audiences) can be just as effective at driving sales (and, in fact, are recommended as target content partners for brands,) as an influencer with 5,000 followers may drive more revenue than one with 500,000, depending on how engaged their audience is.

How influencers affect consumers’ decisions

For someone to be considered a verifiable influencer, it’s not as simple as calling yourself one. It can be a long process to build that coveted authority. There are two main factors that comprise an creator’s toolbox.

Reach

This is all about how large of an audience an influencer has. Again, reach is not enough on its own, as influencers can still make an impact with a smaller following. Furthermore, campaigns that receive cross-platform exposure will have more reach than those confined to a single medium. An example of this is an Instagram post that is also shared via Instagram Stories, as a separate Facebook post, and linked to via Twitter. 

Authority

The audience must trust the creator is credible in what they are saying so they fully buy in to their expertise. Great creators have a high level of engagement with their audience because they have that established trust.

Along that same vein, it’s not about persuading someone to buy a product. It’s about genuinely demonstrating how this is the right product for the target audience. Influencers deliver their message with confidence and passion. They use quality content that focuses on the needs of their audience rather than on sales-y messaging.

Finding the right partner

Identifying the right influencer or creator for your brand is a careful process of observing current activity and keeping an eye on the market for new players… while also focusing on quality, not quantity, when choosing whom to establish relationships with.  

Aligning with partners you believe in and who are good representatives of your brand is a low-risk, cost-effective investment. All of today’s leading influencers and creators (who perhaps now have their ownbrand and products) were once just starting out.  

These partners can also be part of your current customer base, as they have already shown a loyalty to your brand and know your target audience. One recommendation we have is ramping up your gifting efforts to optimize the activity of these individuals. 

If you’re unsure of how to monitor influencer activity to find new partners on your own, there are tools available for you to use. SocialMediaToday recommends free tools like FollowerWonk and Kred. These tools can search for influencers that match your keywords, as well as investigate their reach and authority.

Working with creators

It has previously been difficult for brands to work with creators and influencers within the affiliate channel, due to minimal reporting and tracking options. By incorporating influencers into your affiliate marketing strategy, platforms like ShareASale can offer clear, numerical visibility into the value influencers bring to a brand and allows you to pay on a performance basis. This means you have a support system to connect with the right content partners and track their activity. Most important, you only pay for results, so the investment risk is low.

How influencers have changed the face of advertising

In the past, the popular opinion for digital marketing best practices was to put products in front of a large audience directly from the advertiser. The challenge with this was only a small percentage of that readership was likely to be interested in the product, resulting in fewer leads and conversions than the marketer would have liked. To overcome this, marketers started looking for targeted leads that would be seen by individuals who had already expressed an interest in the type of product they were selling, and thus would be much more likely to buy their offering.

Enter influencer marketing. Influencer marketing is no longer considered a fad or phase, but an important pillar of a retailer’s digital marketing strategy. 

Influencer marketing allows brands to access new groups of people who could easily fall in love with their product or service. What this means for advertisers is that it is no longer good enough to advertise your wares. Instead, you need to make them desirable while getting in touch with buyers who you know will love your products. Influencers help you do this.

What’s more, creators are admired by their audience. It’s not quite the world of hero-worship, but people do look up to influencers and want a little bit of what they offer as part of their own world.

A strong business investment

Individuals today are constantly bombarded with advertisements and product placements, generally resulting in a background noise that is switched off and ignored. It’s difficult to get people to pay attention to your brand and your products.

This is what makes influencer marketing such a strong business investment, as it works on the premise that consumers don’t necessarily see this type of promotion as a direct product advertisement. When an influencer starts talking about a new product, people take notice. This information stands out in a crowded and competitive world.

Are you ready to get started with influencer marketing? Email ShareASale@ShareASale.com today.

The post How influencer marketing is changing the way brands advertise appeared first on ShareASale Blog.

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‘The juice is not always worth the squeeze’: Publishers evaluate cost-per-click pricing models in their commerce businesses

The first quarter of 2022 wasn’t the most successful for some publishers’ commerce businesses. But a few media companies are hoping to avoid this downward trajectory with new pricing models for affiliate deals. Execs hope this strategy will to bring in more retail partners and take advantage of their audiences’ changing online shopping habits.

Called cost-per-click (CPC), this pricing model awards a publisher a small fee from a retailer based on the amount of traffic it refers to the brand’s website or product page, regardless of whether that reader actually made a purchase. This, on average, earns a publisher less revenue than they would get from a more traditional affiliate commerce model, like cost-per-acquisition (CPA), where the publisher earns a commission on any purchases made from the links in its coverage. A CPC deal earns publishers on average $3,000 to $5,000, according to several execs.

But attracting new retail brands makes up for any potential revenue loss, according to execs with Vice Media Group and Leaf Group’s Hunker, which are each experimenting with the CPC model. It also gives publishers new insights, including which emerging trends and products consumers are interested in before they reach the point of purchase. Not all commerce sites, like The New York Times’ Wirecutter, however, are convinced. The Times’ team has opted for a CPA model, with leadership believing that a CPC model requires too much work from its team because of how involved direct deals with retailers can be.

Weighing the cost 

When Wirecutter tested CPC pricing, each deal on average earned about $3,000 to $5,000, according to Leilani Han, the brand’s executive director of commerce, a range that was enough to put the nail in that strategy’s coffin. Han did not disclose what an average CPA deal earns for the company, but they tend to be much higher, depending on the commission rates and the prices of the products from each retailer.

“The workflows that are involved with us actually setting up a new partner, and getting them onto the site and optimizing with them, there’s a fair amount of manual work involved. And so for us to be doing that with a brand that’s going to be on a smaller scale-side, we really have to look at what the opportunity cost is relative to our internal resourcing,” said Han. “The juice is not always worth the squeeze.”

Hunker on the other hand is in the early phase of testing CPC pricing, but only uses it when it’s run through the same affiliate management networks that CPA models operate on. That’s because of how easy it is to toggle between CPC and CPA pricing structures based on narrower factors like product or distribution channel, unlike a direct deal with a retailer, according to Eve Epstein, svp and gm of Hunker.

For example, platforms like social media tend to see more clicks from consumers and fewer conversions, so Epstein said it makes sense to test CPC pricing there, versus allowing CPC pricing across all of the distribution platforms, like newsletters and the website.

“It’s incredibly important that [these tests] remain a quasi editorial practice because I think it requires that level of understanding of what our audience responds to and understanding intent,” said Epstein. 

CPC rates are also significantly lower than CPA commission rates, Epstein added, though did not disclose exactly what the average discrepancy is, but she said a lot of money can be left on the table if CPC deals are overused or used on the wrong platform. 

That ballpark of $3,000 to $5,000 is accurate for CPC deals at Vice Media Group as well, according to chief digital officer Cory Haik, though she justifies the lower revenue point with the added value of insights and data learned from measuring audience response to the products, brands or trends that are covered within that commerce content. 

“If you do [these deals at a high] volume, it adds up. But it’s also, from a strategic perspective, more meaningful to say, ‘This is interesting to our audience, this is a product we would pursue in a different way,’” said Haik. 

Currently, the lion’s share — roughly three quarters — of Vice Media Group’s affiliate revenue comes from CPA deals, said Haik. The next largest contributor comes from flat-fee deals, which from Q1 2021 to Q1 2022 increased by almost 1,000% in the number of deals executed, and CPC deals make up the remainder, she added. Overall, the company’s commerce revenue is up 40% year-to-date from the same period in 2021.

Bringing in new brands

Haik said her team first started testing CPC pricing eight months ago within Refinery29’s commerce business as a way to work with new brands and smaller retailers that are not a part of affiliate networks or don’t distribute through marketplaces like Amazon.

And for a company like Vice Media Group, many brands that would be of interest to its audiences are newer or trendier, and they want a brand like Refinery29 to test new products and retailers as they emerge, Haik added. So by restricting itself to only working with large retailers in affiliate networks, it limits the potential for commerce revenue earned from covering smaller brands. 

“Something that’s new and we might not have a 100% favorable review, we’ll do a cost-per-click [deal] because at the end of the day, the audience will decide if … it’s worth their [money] or not,” said Samantha Baker, vp of commerce and partnerships, who spoke about this model during Digiday Media’s Commerce Week event last month. 

The data learned from clicks to those smaller brand sites is also valuable to Haik’s team as well.   

“[CPC] allows us to see, is this a retailer that’s interesting? Is there any audience connection there? And then [if there is], we can maybe restructure that deal in a different way. So it’s a great environment to kind of test and learn,” Haik said, adding that eventually these brands can be pulled up to a higher yield CPA model if the CPC tests are successful. 

To date, R29 has been the only brand under Vice Media Group that utilizes CPC pricing because it provides the most learnings at scale, Haik said.

The marketing play 

Other retailers have asked for CPC pricing as a cheaper alternative to digital marketing, or as a way to avoid restrictions on platforms like Facebook and Instagram.  

Categories considered more “taboo,” such as sexual wellness, tend to ask for CPC rates, Baker said. “Those brands might not be able to traditionally advertise so they’re looking for awareness, not even necessarily conversion [from these deals],” she said during the event.

What you don’t get from CPC rates is insights on what content led to conversion, however, which is one of the most important success metrics to Wirecutter’s core business priority: driving commerce revenue.

“It’s a good way [for small brands] to get some skin in the game and to be able to access some publishers that [they] might not be able to otherwise. But I don’t know that there’s really that long term value there, either,” said Han. “For them, they’re going to have very limited data on whether or not that clip is actually driving performance. It could totally blow out a budget if you don’t know what’s actually driving success.”

For the small- to mid-market retailers earning under $1 million per month that Ben Zettler, a digital marketing and e-commerce consultant, works with, they are getting hit by increased CPMs for digital ads on Facebook and Instagram without seeing conversions increase, making this form of marketing unsustainable, he said. Affiliate marketing is an alternative avenue to reaching readers, but it comes down to whether this is something retailers with less budget flexibility will trust to move the needle.

“Affiliate marketing is hard because you can end up giving a lot of revenue and commissions where you don’t necessarily intend to,” Zettler said. “The types of brands that I see that go for the awareness plays are not the mid- to low-tier brands. [Those] brands are going to say, ‘OK, I have $5,000 [for marketing], how much money am I making from that.’”

The post ‘The juice is not always worth the squeeze’: Publishers evaluate cost-per-click pricing models in their commerce businesses appeared first on Digiday.

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