Brands Partner With Creators on Affiliate Linking

For years, Noelle Downing, a lifestyle influencer with more than 450,000 followers on Instagram, wanted to partner with brands like Urban Outfitters and Free People. But it wasn't until she turned to affiliate marketing that she sealed the deal. By posting links for products on her feed, she could prove that she could drive sales—plus, she got a cut of every transaction. Downing, who started affiliate linking at the beginning of the pandemic, said she has had 10 partnerships with Urban Outfitters and Free People in the past 12 months. “When Covid started, I was really stressed," Downing said. "What’s a proactive way to secure income without banking on brands reaching out to me? I am kicking myself that I didn’t start sooner.” Recently, more people and brands are realizing the value at the intersection of the creator economy and affiliate marketing, the practice of partnering on transactions with a third party such as a publisher or platform reseller. For example, in December 2021, 12% of U.S. and Canadian YouTube creators affixed their videos with affiliate links from Amazon, according to social marketing analytics company Emplifi, which doesn't count all creators on other platforms and those partnering with other brands. Driving these partnerships are creators looking to diversify their revenue streams and brands seeking new ways of reaching customers as targeting becomes trickier and social advertising becomes more expensive. “Creator partnerships in the affiliate channel right now are among the most sought after,” said Alison Rinaldi, affiliate marketing director at digital agency PMG. “Every client that we’re working with today is looking for these creator partnerships, not just to expand their reach but to continue to drive sales.” But as new technologies allow social platforms to perfect their in-app shopping capabilities, peddling links could become a marketing fad. Evolution of affiliate marketing The pandemic accelerated the evolution of affiliate marketing, thanks to slashed advertising budgets, influencers eager for alternate revenue streams and a huge growth in ecommerce. “Back in early 2020, we saw an incredible flux in affiliate revenue,” Rinaldi said. Two tech companies that build software to help creators earn money from hawking brands’ links reached staggering valuations last year: impact.com entered the unicorn club at a $1.5 billion valuation in July, and LTK reached a valuation of $2 billion in November. LTK, which focuses more exclusively on the creator economy, achieved $3 billion in sales in 2021, compared to $1 billion in 2017, according to an LTK spokesperson. Ten years ago, when Rinaldi started out in affiliate marketing, it was seen as a bottom-of-the-funnel partnership, perfect for couponing, discounting and driving loyalty. “Affiliate was unheard of in the agency space. No one had an affiliate team,” Rinaldi said. Now, major holding companies like WPP and IPG have employees with affiliate marketing in their titles. Brands can reach an engaged audience they wouldn’t otherwise have access to and only have to pay when a sale actually happens, Rinaldi explained. More brands are turning to affiliate marketing as advertising on social platforms becomes more expensive and less effective, said David Yovanno, CEO of impact.com. During the 2021 Black Friday period alone, marketers said they spent 30% to 200% more advertising on social. “Ad rates have gone way up. It’s causing [brands] to look for alternatives to reach the consumer,” Yovanno added. Affiliate marketing is more similar to search than social marketing, Yovanno said, as consumers are doing more research before they make a purchase and turning to third parties for insight. A social commerce revolution But, with more platforms turning to commerce and tooling up, affiliate marketing could become obsolete as platforms build out their capabilities to transact within their apps, said Ross McCormack, vp director of social strategy at Havas Media Group. In June 2021, Instagram started testing a native tool where tags on creators’ posts function as affiliate links. When a consumer clicks on the tag for a product and purchases it within the app, the creator gets a cut of the transaction. In July 2021, Pinterest launched a similar feature, allowing creators to make money through shoppable Idea pins. Creators can also risk alienating their audiences if they post too many links, said Stephanie Liu Hjelmeseth, a creator with around 111,000 Instagram followers. As a result, McCormack noted, for all the hand-wringing about targeting, using affiliate marketing may not be the cleanest way to drive sales. “We see [creators] as most effective in building new audiences,” McCormack said. “While they can offer a path to purchase, we know as media marketers there are more efficient channels to leverage conversions.” But for now, the money is flowing, especially for creators like Downing who can use affiliate marketing stats to prove their worth to brands.

Platforms

Brands See Increased Sales After Arming Creators on Social With Affiliate Links

Though as platforms develop new tech, it could soon become outdated

Catherine Perloff

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Catherine Perloff