OliviaThe marketing industry is changing rapidly, and influencers have become a marketing channel in their own right. As with anything new, there’s been a lot of confusion around how influencer marketing works. So, as a marketing professional, I did some instagram stories to (hopefully) explain just that – and as I got so many messages thanking me for how useful they were, I thought putting my main points and answering some of the more popular questions in a blog post would be helpful.
Before we dive in, a couple of points to note. Firstly, I’m writing from experience of working with big brands (smaller brands/companies may operate differently). I am pretty impartial because I earn very little from my Instagram/blog – it’s now how I make my money (I’ve done a couple of sponsored posts last year and use the occasional affiliate link. It definitely costs me more to host this blog than I’ve made!).
So, the main points I mentioned in my instagram stories:
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Marketing Teams will be allocated their budgets in advance.
In big companies especially, marketing is an integral part of business planning as it impacts sales forecasts hugely. Therefore, marketing budgets are set around 12-18 months ahead, and marketing plans produced 6-12 months before activity. This might seem irrelevant to influencer marketing but it is really important to understand. -
If you don't spend your budget, it'll be taken away and you won't get it back.
In most big companies, anyway. -
This means rigorous marketing plans are produced and budget is split by channel in advance.
So in very simple terms, a year ahead, marketing teams will be working out what they spend this budget on to achieve their objectives - in terms of campaigns and the channels (whether it's TV/Radio/Email/Direct Mail/Door Drops/PR/Search/Affiliates/Social, etc). -
So, if you stop influencer marketing, this budget will be spent elsewhere.
Because budget needs to be spent to get sales. If you pull influencer marketing, it'd go back into other forms of (usually digital) marketing.
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The majority of marketing or media channels are owned by very rich people, or very big companies.
There aren't many marketing channels which are benefitting the small guys. So if you, as a consumer, don't click on affiliate links so that budget isn't being spent - it'll just go back into another media channel - and odds are, it'll be owned by Google or Facebook. So, I personally think it's pretty rubbish that people are saying they don't like or want to engage with influencer marketing - as inadvertently you'd be putting that money back into a huge corporation (who may or may not be managing their tax in an ethical way).
Say you’ve seen some lovely dungarees on a blogger on Instagram, and they have an affiliate link for them. But you decide that you don’t want to use that affiliate link (which is totally your call); you go on Google instead and search ‘black matalan dungarees’ and click the first link you see. There is a very, very high chance that the top result is sponsored and Matalan have just paid Google instead of the blogger you saw the dungarees on. You can see in the screenshot below it says ‘sponsored’ in the corner. What’s more, Matalan will pay Google even if you don’t go on to buy the dungarees – Google search ads are what we call ‘pay per click’. The vast majority of affiliate marketing, however, is a small percentage of commission paid if you buy the item and don’t return it.
Even if you don’t click the sponsored link on Google, but go directly to the website to purchase, brands will still struggle to attribute your purchase to the influencer or blogger. So, as a marketing team, we’re likely to assume that purchase came from a bigger advertising channel like TV if it’s on at the same time. This means that when we’re looking at channel performance, we’ll think influencer marketing hasn’t worked and therefore we wouldn’t invest in it as much in the future, meaning that money is going into channels owned by the ‘big guys’ rather than the small, independent influencers/bloggers. Marketing is performance driven and results are always analysed against campaign objectives in detail (campaign objectives aren’t always sales based but could be, for example, to increase brand awareness).
Some of the most common questions I've been asked:
Influencer marketing includes gifting, sponsored posts, paid for posts and affiliate links. One Roof Social has a great blog post about the differences between them and the ASA regulations on each, click here to read.
Mostly, influencers will be signed up to affiliate networks who will give them access to a portal where they will go in and get the links. Sometimes, especially if it’s a smaller brand, it might be done through a tracking link which has a few extra numbers/letters in it to indicate where it’s come from. It’s worth noting, all commission has to be approved by the brands before being paid out, to check for duplicates, returns, etc. so it takes 90 days before any commission is paid. Most also have minimum threshold for payment so it will take a long time before an influencer/blogger actually sees the money.
It’s dependent on the affiliate network they use/belong to but it is very, very unusual for influencers to be paid per click rather than per sale.
Put simply, an affiliate network is a middle man between brands and affiliates.
I believe RewardStyle was set up by an influencer couple and ShopStyle is owned by Rakuten who are a big digital marketing technology company. Most smaller affiliate networks/collectives will still go through AWIN (used to be called Affiliate Window) who are a global affiliate network which most brands use. Yes, still a big guy but at least the small guys are getting a cut!
AWIN Wiki’s jargon buster is a great place to start to understand the differences between different types of affiliate marketing – click here to go there.
I find this an impossible question to answer as this is totally dependent on your brand, objectives and audience. Influencers might not even be the right marketing channel to use – a lot of businesses go wrong early by investing in the wrong channels. Sometimes, the less ‘sexy’ channels could be the right ones!
There isn’t a huge amount of accurate information (in my opinion) out there about influencer and affiliate marketing, hence me trying to myth-bust. But here are some of the better influencer/affiliate marketing articles from around the internet:
- Call out Culture and the Rise of the Watchdog – One Roof Social (ORS is my first port-of-call for anything specifically influencer marketing related!).
- How Affiliate Marketing is helping Brands go Global – Marketing Week (this is from 2017 but still some interesting points in there. You have to register but it’s free!).
- Seven steps to plan & manage your affiliate marketing campaigns – Econsultancy (also a 2017 article but the points discussed are still relevant if you’re a brand!)
Have any more questions, or think I’ve missed something? I’d love to hear from you in the comments below!
Olivia xx
Very comprehensive! Great post. Bookmarked for later reference too.
Thanks, I’m glad you found it useful Arati!
This is such a great post! Thank you for sharing!
Ah thanks, Kelly! Glad you found it useful 🙂