Marketing
Marketing is a process that understands the consumer's needs and wants thereby providing a product that fulfils its in exchange for monetary value. ‘Marketing’ today is in a transzonal phase. The two front runners in this space are- Affiliate marketing and Influencer Marketing. So, what exactly do these new adjectives imply, and what separates them?
When the internet era began, ‘Affiliate Marketing’ was the most effective medium of advertising. It fundamentally relied on promoting products or services on a common platform in return for a small commission- a digital version of a newspaper ad with a feedback loop system. This strategy sustains as long as one is getting good traffic. When a user clicks an affiliate link- a small file called a cookie is automatically stored on their computer, which on a successful purchase enables the merchant to see which platform where they referred. This tracking feature was a major contributing factor in its popularity. The Pay-per-link, Pay-per-click, and revenue sharing- strategy works as advertisements bringing in a larger audience. It is a technique to generate significant online revenue by using an efficient methodology of affiliation. At the moment, Amazon Affiliate marketing is the largest and most popular product of this methodology. This program allows partners to promote any item sold on their platform.
The disadvantage of the affiliate system is extra commission costs, high set up and maintenance fees due to affiliate facilitators/brokers. There is also a risk of false and misleading advertising to get sales commissions by affiliate platforms. Despite this affiliate marketing remains one of the best ways to make money online.
Influencer marketing is a relatively recent development and came out where of a need to have a more personal connection with the clients. Influencer marketing bridges the gap between the consumer and supplier, thereby bringing in an actual person providing an authentic relationship cushion between them. This strategy is midway between the traditional celebrity endorsement and the new age content-driven marketing strategies- engaging 'influencers' instead of celebs. Influencers still manage to maintain a relatability factor despite the millions of follows against their profile. This relatability cause increase in demand for the product- contributing to their product's success. Instagram, for example, is an ideal platform for reaching and targeting millennials. It works as the perfect platform to promote youth-related products like clothing and fitness.
YouTube on the other hand has reached a range of demographics from 13 to 40 years. These platforms provide the creator to share sponsored content and demonstrating the working of the product.
The main disadvantage of influencer marketing is difficulty in identifying the appropriate influencer for the brand. It right takes time and effort, and if done wrong, it could cause irreversible damage to the reputation of the brand. Apart from this, there is a large uncertainty factor also associated with this type of marketing where the targeted audience does not associate thereby not engaging with the influencer leading to financial loss.
Digital marketing does not always have to pit influencer marketing against affiliate marketing. They can work together. Which is better- Affiliate marketing or Influencer marketing? This primarily depends on what your end goal is -
If it is more brand awareness and instant promotion of specific products, then influence marketing is ideal as influencers are in front of your target audience, the influence they have over their followers. The established trust drives a great deal of awareness to the brands.
On the other hand, if your goal is to increase product revenue and increase the brand value while promoting in mediums other than social media, then affiliate marketing solves the problem.
Which is more profitable? A larger budget means collaborating with larger influencers giving as much exposure as possible. However, this could be too expensive. Another option is by targeting micro-influencers who have niche followers in the specific field.
In case someone wants to wait and observe the results before paying or keep an option to end a campaign based on the budget, affiliate marketing could prove beneficial. This is because payment to the affiliates only occurs after a successful purchase, now as per the campaign, it is easier to track the expenditure in real-time.
Dependency on just one marketing strategy is never the most efficient method. Although Affiliate and Influencer marketing strategies differ, they still co-exist. The pandemic is a perfect example of uncertainties in the market as there has been a rise in the ROI of influencer marketing. Using a combination of affiliate along with influencer marketing gives the product the umbrella of new yet reliable. It is observed that most brands now are investing in tapping the potential of both these audiences to give their products a wider coverage. Now brands invest in the content makers with whom they want to identify their brand as well as maintaining their traditional marketing set-up. For instance, a popular comedian like Samay Raina who created his niche of comedy X chess audience now endorses brands like Red bull because of the large youth followers he has. Most cosmetics brands like Lakme and Maybelline target influences as well as affiliate markets like Nykaa to keep their sales high.
To summarise, both affiliate marketing and influencer marketing are forms of referral promotion that brands can use to drive traffic and sales with each having its advantages and disadvantages. It's on the brand to make the best out of both these techniques.