Since 2017, the affiliate marketing industry has grown by over 83% and is projected to reach a global value of $40 billion by 2030. Similarly, the influencer marketing industry is currently valued at $24 billion.
Traditional advertisement no longer works as well as it used to. Consumers’ purchasing behaviors have shifted, and many now make decisions based on influencers and social media recommendations.
Both affiliate marketing and influencer marketing have significantly boosted sales and conversions for e-commerce and DTC brands.
But which approach is right for your business?
In this article, we’ll explore the key differences between affiliate marketing and influencer marketing to help you choose the strategy that will maximize your ROI and drive growth.
Influencer marketing is a type of social media marketing that involves endorsements and product placements from influencers—individuals who have a dedicated and substantial following on social media platforms.
These influencers create and share content that promotes a brand, product, or service, leveraging their trust and rapport with their audience to drive engagement, brand awareness, and sales. This strategy focuses on authenticity and organic promotion to reach target demographics effectively.
The influencer marketing industry is growing at a fast speed. These are the main benefits of using influencer marketing for your business:
Influencers often have strong relationships with their followers, who view them as authentic and relatable figures. This is why over 69% of consumers trust the product recommendations they get from influencers.
By partnering with an influencer, you can generate more trust and credibility in your brand, as its recommended by someone who they admire and trust. This dynamic can lead to increased brand loyalty and a higher likelihood of conversion, as consumers feel a personal connection to the recommendation.
Influencer marketing tends to be more cost effective than traditional advertising, offering a higher ROI. Data shows that businesses make $6.50 for every $1 they spend on influencer marketing. And 3% make $20 or more.
Brands can work with influencers of various sizes to fit different budget constraints while still achieving impactful results.
Generating conversions is one of the key reasons why brands use influencer marketing as their main strategy. Over 51% of marketers say that influencer marketing helped them acquire better customers.
The reason behind this is that by working with influencers, you can precisely target your desired demographic. This ensures that the marketing efforts reach the most relevant audience.
Affiliate marketing is a performance-based strategy where affiliates, typically bloggers, influencers or website owners, promote a company's products or services through unique tracking links.
Affiliates earn a commission for each sale, lead, or action generated through their promotional efforts. This method relies on measurable outcomes and incentivizes affiliates to drive targeted traffic and conversions, making it a cost-effective way for brands to reach a wider audience.
Affiliate marketing is rapidly becoming one of the most effective strategies for brands to drive conversions. Here are the key benefits of affiliate marketing:
Affiliate marketing drives around 16% of eCommerce sales in the US and Canada and is used by over 80% of advertisers. One of the main reasons is because affiliate marketing operates on a performance-based model where brands only pay for actual conversions such as sales or leads.
Brands don’t pay for impressions or clicks, commission is paid when an influencer has made a sale.
According to Forbes, 83% of marketers use affiliate marketing programs to drive brand awareness.
By partnering with affiliates who have their own established audiences, brands can extend their reach to new and diverse customer segments. This expanded visibility can lead to increased brand awareness and higher traffic to the brand’s website.
Affiliate marketing is straightforward to implement and does not require extensive resources. The main step is to set up a system for generating unique URLs for each affiliate, so that tracking conversions becomes the primary task.
For this, using platforms like Influencer Hero can help you easily build your influencer affiliate program to reward top performing influencers. With its influencer affiliate marketing integrations you can create affiliate links, discount codes and process payouts.
The key difference between influencer and affiliate marketing is that influencer marketing refers to the overall marketing process of collaborating with influencers, while affiliate marketing is the technical process used to track performance based on which the influencer is being compensated.
In essence, affiliate marketing can be considered a subset of influencer marketing, utilized to measure and reward the success of influencer-driven campaigns.
Let’s explore the main elements of both approaches.
Influencer marketing employs a variety of tools for content creation, audience engagement, and relationship management. These tools help in crafting specific types of content and providing creative directives to influencers.
Affiliate marketing, however, relies more heavily on tracking and analytical tools like Awin or Refersion to monitor clicks, conversions, and overall campaign performance.
Tracking mechanisms differ significantly between the two.
In influencer marketing, while tracking metrics like reach, engagement, and brand sentiment is important, it can be more qualitative and less precise.
Affiliate marketing, conversely, is heavily data-driven, with clear metrics on sales, leads, and other direct outcomes, making ROI calculation more straightforward.
The metrics used to gauge success also vary. Influencer marketing looks at broader metrics such as brand awareness, social proof, and creative quality.
Affiliate marketing focuses on precise performance metrics like cost-per-click (CPC), cost-per-acquisition (CPA), and overall conversion rates.
When we compare influencer marketing and affiliate marketing as separate marketing strategies we are referring to the more traditional affiliate marketing model where brands can sign up on platforms like Awin or Refersion VS Influencer marketing as a whole.
Influencer marketing costs can vary significantly based on several factors, including the influencer’s reach, engagement rate, niche, and platform. Typically, costs are categorized as follows:
Besides the fee for individual posts, you may also incur costs for additional content creation, long-term partnerships, giveaways, and promotional campaigns.
Influencer marketing often involves upfront payments or fixed fees, making it key to asses the ROI carefully.
Affiliate marketing operates on a performance-based model, meaning costs are primarily incurred when a desired action, such as a sale or lead, is completed. These are its most common structures:
Since affiliate marketing costs are directly tied to performance, it offers a lower-risk alternative for businesses, allowing them to pay only for measurable results. This model also makes budgeting more predictable, as costs scale with the volume of successful transactions.
When deciding between influencer marketing and affiliate marketing, keep in mind:
Budget Flexibility: Influencer marketing may require a higher upfront investment, while affiliate marketing offers more flexibility with its performance-based model.
Measurement of ROI: Influencer marketing ROI can be more challenging to measure, as it encompasses brand awareness and engagement, whereas affiliate marketing provides clear, quantifiable results.
Brand Goals: If your goal is to build brand awareness and reach a specific audience, influencer marketing might be more effective. For driving direct sales and measurable actions, affiliate marketing is often more suitable.
Dyson is a British technology company renowned for its innovative home appliances, including vacuum cleaners, air purifiers, and hand dryers.
For one of its campaigns, the company collaborated with five pet influencers, primarily targeting dog owners. The influencers were given creative freedom, with the only guideline being to showcase how pet owners clean up after their pets.
The results? Dyson had over 1 million views, 115,000 likes and a 10% engagement rate across their campaign.
Daniel Wellington is a well-known watch brand that has been leveraging partnerships with influencers, including both macro and micro influencers.
These influencers showcase the brand’s watches in their everyday lives, helping to build a more authentic connection with their audiences. Additionally, they have creative freedom to produce content that feels genuine and aligned with their personal style.
Whitin just 3 years, the brand sold over $228M in watches, or 1 million watches - this all due to their influencer marketing campaigns. Additionally their UGC campaigns became so popular that influencers started using the hashtag #DWpickoftheday to try to get featured on the brand’s official profile.
Bloom, a company specializing in plant-based beauty products, partnered with influencers who aligned with their brand values and target demographic. Influencers were chosen for their strong engagement rates and authentic connection with their followers.
The campaign involved influencers creating content that highlighted Bloom’s products in everyday beauty routines. This included detailed product reviews, tutorials, and personal testimonials to showcase the benefits and effectiveness of the products.
One the day of their product launch on Amazon, they partnered with more influencers who redirected people to the Amazon store.
The results? The campaign had 5.5 million views, a $1.47 CMP, and the Bloom product became an Amazon best seller.
Amazon’s Affiliate Program, known as Amazon Associates, is a prime example of successful affiliate marketing.
By offering affiliates a commission (1-20%) for driving sales through their referral links, Amazon has expanded its reach and grown its customer base significantly, contributing to its dominance in the e-commerce space.
Gymshark’s affiliate marketing program is designed to leverage influencers and affiliates to drive traffic and sales. Affiliates are provided with unique tracking links and promotional materials to help them promote Gym Shark’s products.
The affiliate marketing strategy has contributed to significant growth for Gymshark, driving substantial traffic to their website and increasing sales.
Adobe’s affiliate program effectively targeted creatives and tech enthusiasts through partnerships with bloggers and industry experts. This approach resulted in increased software sales and a broader reach for Adobe’s suite of products.
Traditional affiliate marketing platforms are marketplaces which connect brands and advertisers with publishers. As a brand you can sign up on these platforms through which you will be included in their marketplace.
Publishers can then find you on these platforms, see how much affiliate commission you offer and start creating content and publish articles around your product or service using a personal affiliate link to start earning commission. Examples of these affiliate marketing platforms are Awin and Refersion.
Influencer marketing platforms on the other hand offer a more proactive approach enabling brands to source through a database of influencers and publishers and then contact these influencers for a partnership. These platforms are often structured to effectively manage these relationships and other aspects related to social media influencers like capturing the content and sending products.
Examples of such influencer marketing platforms are Influencer Hero, Grin or CreatorIQ.
Affiliate marketing leverages advanced technologies to track referrals and ensure affiliates are accurately compensated for their promotional efforts. This seamless process involves several key technologies working in harmony.
Unique URLs generated for each affiliate to monitor their referrals. In most cases the link adds UTM parameters (Urchin Tracking Module) through which the conversion event can be tracked.
Small data files placed in a user's browser to record referral details and track user actions. Cookies allow advertisers to track conversion events even if the conversion event occurs at a later point. This happens for example if a prospective customer clicks on the affiliate link and looks at the website but doesn’t purchase right away. A couple of days later they complete the purchase. In that case the cookie saved in their browser is able to pass over the UTM (which is saved through the cookie) and the conversion can still be attributed to the respective affiliate / influencer.
Besides tracking links, personalized voucher / discount codes can be an effective way to increase attribution in affiliate marketing (more on attribution later). Each affiliate / influencer gets their own voucher code. Everytime this voucher code is being used at checkout the sale will be accounted to the respective affiliate.
Platforms that connect affiliates with merchants, providing tools for link generation, tracking, and reporting. Examples can be Influencer Hero, Awin or Refersion.
Monitors user activities, ensuring accurate attribution of conversions to the corresponding affiliates. These are software companies providing the tools for brands and affiliates to keep track of earnings. Examples are Influencer Hero, Goaffpro or UpPromote.
After the affiliate has earned his or her affiliate an important process is processing the payouts. Affiliate software providers often offer this feature within their platform.
If you decide you want to get started with influencer and affiliate marketing it is important to understand how you can track the affiliate performance of your influencers.
One way to track the performance is by creating UTM links manually. Google for example offers this easy to use UTM builder through which you can create UTM links. The link would be long and doesn’t look great so we recommend to set up a redirect so you can create personalized links. It could look like this: www.mybrand.com/jessica. This links would then redirect to the UTM link you created. In most cases the easiest way to set up these redirects is within your CMS. This can be Shopify, Wordpress, Webflow or any of the other providers. Once you share the UTM link with your influencers / affiliates and they start posting you can track the performance in Google analytics. Follow the steps below to set this up.
Go to Google Analytics and log in with your account credentials.
In the left-hand sidebar, go to Reports > Acquisition > Traffic acquisition. This report gives you an overview of how users arrive at your site or app.
Use the filter option to select your campaign. You can use the search box to find specific campaigns tracked by UTM parameters.
For more detailed analysis, use the Explore tab to create custom reports. You can use dimensions like Session Campaign, Session Source/Medium, Session Default Channel Grouping, etc.
Ensure you set the correct date range to analyze the data for the period you are interested in.
Tracking affiliate performance manually is time intensive and can be complex which is why we recommend using affiliate marketing software to keep track of things. These platforms provide the tools to create affiliate links, discount codes and also provide dashboards which can be accessed by both the brand as well as the affiliate / influencer.
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There are various options you could choose from. If you want to use affiliate marketing for influencer marketing the best options available are:
To read more about the best affiliate marketing software you can access our article here.
As previously mentioned affiliate marketing is used within influencer marketing and is thus only a small part within the whole process of influencer marketing. Influencer marketing often involves the following steps:
Each of these steps can be streamlined and automated using software. We recommend using an all in one influencer marketing platform where you can manage everything in one place. Some options are:
To read more about the best influencer marketing software access the full article here.
Our data scientists analyzed over 10K commercial influencer post to determine the correlation between different metrics and conversion. You can access the full research on the metrics which impact ROI here.
To analyze all the above metrics conveniently while browsing the web you can also use our free influencer audit chrome extension here.
What is important to understand is that attribution is rarely 100% in digital marketing. With affiliate marketing even when using the most advanced tracking tools there is always a part which gets lost. Some of the reason tracking is getting lost:
Imagine a prospective buyer sees an influencer posts and clicks on the affiliate link which is included as a link sticker in the influencer story post. The cookie is correctly placed in the browser. The prospect uses Safari on his or her Iphone. A few days later they remember about your product, open their laptop and complete the purchase. On their laptop they use Chrome as a browser which means that the cookie is not saved which disables the system to pass over the UTM link. The result is that attribution gets lost.
A common way attribution gets lost especially when affiliate marketing is used with influencers is when the customer does not click on the affiliate link but accesses your website in a different way.
This can frequently happen for example if the influencer also tags your Instagram next to adding the affiliate link in a link sticker on Instagram. A lot of people will go to your Instagram page first and access your website through your link in bio hence the affiliate link won’t be able to track. If you then also offer a discount directly on your website or through an email popup the customer might use that code in which case both the affiliate link and the discount code won’t be able to track the sale.
Yes, influencer marketing and affiliate marketing can be effectively used together to amplify a brand’s reach and sales. Influencer marketing focuses on leveraging influencers' content and credibility to create brand awareness and engage their audience, while affiliate marketing incentivizes influencers to drive specific actions, such as clicks or sales, by offering commissions. Combining these strategies allows brands to benefit from both the broad visibility of influencer campaigns and the performance-based structure of affiliate programs.
This hybrid approach maximizes ROI by blending brand-building efforts with direct, measurable outcomes, making it a powerful tool for comprehensive marketing strategies.
Nordstrom combined influencer and affiliate marketing to boost brand awareness and sales. By partnering with fashion influencers, Nordstrom generated engaging content that resonated with their audience.
Alongside influencer collaborations, Nordstrom integrated an affiliate marketing program. Influencers were given unique affiliate links, incentivizing them to drive sales in addition to creating content.
This approach resulted in high engagement and a significant increase in online sales, demonstrating the power of blending both strategies to achieve a higher ROI and foster long-term partnerships with influencers.
Understanding the distinct roles and benefits of influencer and affiliate marketing is crucial for crafting a successful marketing strategy. While influencer marketing leverages the authenticity and reach of social media personalities, affiliate marketing focuses on performance-based outcomes with measurable KPIs. Combining both strategies can maximize brand visibility and drive conversions. By carefully selecting compensation methods and tracking performance through appropriate tools, businesses can optimize their marketing efforts and achieve their objectives efficiently.
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