Is Affiliate Marketing the less risky way to work with influencers?

Investing in Influencer Marketing can be intimidating for marketing teams as they need to demonstrate a secure and quick return on investment. Affiliate marketing seems like an obvious choice because influencers are only paid when conversions occur. This approach offers a certain financial security, but it has significant limitations that should be considered.

How many influencers actually accept this type of compensation? And what are the long-term effects on content and the community? In this article, we will explore the concept of affiliate marketing, highlighting three reasons why it may be advantageous to consider alternative collaboration methods with influencers. Specifically, we will present the solution that Roundabout has validated with its users, a method that manages to reduce risk and harness all the best benefits of Influencer Marketing.

What is Affiliate Marketing?

Affiliate marketing is a model in which influencers promote third-party products or services through affiliate links. The brand and the influencer agree in advance on the commission amount and the tracking and collection methods. Influencers receive a commission only when a user makes a purchase through their link.

This model is based on the idea that influencers can drive conversions through their influence on the target audience. It is an easy-to-implement and track methodology that does not require significant upfront costs and offers flexibility. Is it the best approach?

Three reasons why considering another method makes sense:

Limited acceptance by influencers:

Not all influencers accept compensation based solely on conversions. Many influencers prefer to receive fair compensation for their work, regardless of sales results. This reasoning is not wrong, especially for products that require significant exploration, thus creating content that requires substantial effort.

Additionally, even if a content piece does not generate immediate sales, it still has promotional value in terms of awareness, consideration, and endorsement. Consequently, the affiliate model may exclude high-quality influencers who can bring significant value to your Influencer Marketing strategy.

Limited control over content and practices:

Focusing solely on conversions often leads to a decline in content quality. Influencers may be tempted to promote products or services that do not align with their values or their audience's expectations.
This can damage the trust and authenticity of the influencer, negatively impacting your brand's image and audience trust. Moreover, performance-based payment does not allow you to have real control over the output. While you can and should provide a comprehensive brief with macro guidelines, you cannot verify or direct the communication of the content once it has been produced.

Similarly, it is not easy to control the potential use of fraudulent practices that manipulate transactions, spam, and false email lists.

Long-term effects:

While affiliate marketing may offer immediate results, it is essential to consider the long-term effects, particularly the inconsistency of results. Building an authentic relationship with the audience takes time and commitment. The affiliate-based approach may not foster long-lasting relationships with influencers and their audience, limiting the potential for exponential growth over time, which is the true wonder of Influencer Marketing.

Roundabout's Solution: The Optimized Ambassador Program

To overcome the limitations of affiliation, reduce risk, and maximize the potential of Influencer Marketing, Roundabout has developed a process called the "Optimized Ambassador Program."

This is a long-term strategy (starting from 1 year) that focuses on strengthening conversions throughout the entire funnel, encompassing both branding and sales. This is because expecting today's consumers to immediately react to purely sales-driven content without exploring, comparing, and analyzing what they can find online is an unrealistic expectation.

The level of online brand maturity within your specific target audience is closely related to the speed and size of online sales (with any marketing channel, not just influencers).

Therefore, the optimized ambassador program considers continuous full-funnel work that tests and optimizes the entire strategy each month.

Let's give an example: your brand is not entirely new in the national market, but it's not among the top 3 brands that come to mind for your target audience when they think of a product like yours. So, you start with a medium-low level of branding and decide to work with 72 influencer ambassadors over 1 year to increase awareness, consideration, and ultimately, sales.

By setting up continuous work, you activate 6 influencers per month and assign them a tracked full-funnel storytelling. In the first month, you activate the initial 6 influencers, collect and analyze the results they achieve. In the second month, you re-engage 50% of the best performers from month 1 and add 50% new influencers with optimized characteristics based on what you learned during the initial activity. Continue with the same approach in the following months, and within the first 6 months, you will have:

• Tested, validated, and understood the exact characteristics of influencers that are perfect for your brand.
• Minimized the investment risk.
• Achieved an effective ROI that allows you to scale your activities and results.

Many clients at Roundabout have validated and succeeded with this methodology. One example is Skinlabo, which managed to achieve an x8 ROAS in the first year of activity.

Conclusion

Although affiliate marketing may seem like an enticing solution to reduce the risk of investments in Influencer Marketing, it presents significant limitations that should be considered. The optimized ambassador program offers an innovative solution focused on building long-term relationships and producing authentic, high-quality content.

To achieve lasting results and maximize the potential of Influencer Marketing, we recommend thoroughly evaluating the real pros and cons of the strategy, so you can choose the solution that truly fits your goals.