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Influencer Marketing vs. Performance Marketing

influencer marketing vs. performance marketing
March 17, 2021

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Lina Nguyen

Lina Nguyen

Marketing and Account Coordinator

Whether it’s YouTube tutorials, TikTok dances or product comparisons, creating digital content can be a lot of fun when you’re just starting out. But if you’re looking to climb to the next level and parlay your content creation into a sustainable revenue stream, it’s essential to understand the landscape of monetizable content; specifically, the difference between influencer marketing and performance marketing.

Shane Barker explains that nowadays, people are generally familiar with the term “influencer marketing” due to the rise of social media. However, performance marketing (also known as affiliate marketing) has not yet attained that level of mainstream recognition, yet is one of the most impactful digital channels out there.

It’s not uncommon to confuse them as one in the same, and if you’re looking to generate income as a content creator, understanding the difference will help you identify the right brand partnerships that can maximize your income potential.

influencer marketing

What is influencer marketing?

Influencers are online personalities that have an engaged relationship with their niche audience and the ability to influence their purchasing decisions (Influencer Marketing Hub, 2021). Brands partner with influencers in specific niches, where the influencer uses their own channels to promote the brand’s products and services.

Influencer marketing is one of the most powerful ways to get brand awareness and exposure. According to sellbrite, over 3 billion people use social media, with the most popular platforms being Instagram, Facebook, and YouTube for video. With such a large market, the opportunity to target niche audiences is virtually limitless.

 

Performance marketing

What is performance marketing?

In performance marketing, a content creator – more often known as a “publisher” – promotes or recommends a product to their audiences and receives a commission from a brand when an audience member takes a specific action, such as applications received, account activations, post-sign-up activities, and more.

In this respect, performance marketing is a cost-effective, scalable channel for brands that wish to drive customer acquisition, because they pay only for new customers.

Yet if performance marketing is considered so impactful, why aren’t many people as familiar with it? The truth is most people have seen performance marketing in action without even realizing it, particularly because it’s arguably less overt than other forms of digital advertising. Performance marketing is popular in channels where creators have the most editorial authority, such as their own blogs and YouTube channels. As such, people have likely come across it across the content they regularly consume online.

When considering performance marketing or influencer marketing, there are some unique differentiators that lead brands to strategically include one or the other, or even both, for their marketing campaigns.

Performance marketing has not yet attained the mainstream recognition of influencer marketing, yet is one of the most impactful digital channels out there.

Influencer marketing vs. performance marketing

Understanding the similarities and differences between the two can help you identify your strengths as a content creator and, in turn, the opportunities you can pursue with brands.

Firstly, let’s look at what these two types of marketing have in common:

  • Content creators come in a variety of personalities and mediums, from bloggers, YouTubers, podcasters, online personalities, to brands of all shapes and sizes
  • The goal is to reach niche audiences with products or services that match their needs and interests
  • Authenticity is key, and education – a review, product comparisons, stories of hands-on experiences – is a popular way to frame content, capturing interest and curiosity to spark a potential new customer journey

As you can see above, influencer marketing and performance marketing have a few things in common, but the real differences are evident when you look from a strategic perspective:

Influencer Marketing Performance Marketing
Ideal for companies seeking Brand awareness (top of funnel) Customer acquisition (bottom of funnel)
Payment model Flat-fee Commission-based
Popular mediums/ platforms YouTube, Instagram, Facebook, TikTok Blogs, YouTube
Advantages
  • Income received quickly
  • Total earnings guaranteed via signed contract
  • Opportunities for free products and/or services from brand
  • Long-term, scalable income
  • Uncapped earnings (in most cases)
  • Higher earning potential over time
  • Increased editorial authority and authenticity; no scripts to read
Challenges
  • Earnings caps due to fixed, one-time rate
  • Less editorial authority and creative freedom
  • Brand’s required key messages may position you as biased to their brand
  • High-quality traffic and audiences required to drive action
  • Effort to keep brand’s offers and terms up -to-date
  • Time & effort to nurture before driving results

The payment model is one of the most critical elements to consider for your incoming-earning potential as a content creator. Take a look at our Pros and Cons of Flat Fee vs. Performance Marketing Models to learn the benefits and challenges of these payment models.

Slowdown in Influencer Marketing

Last year, there was a significant slowdown of investments in partnerships for influencer marketing campaigns (eMarketer 2020). It’s no surprise: economic downturn and skyrocketing unemployment made people more cautious with their disposable income. As such, it was more difficult for brands to push and sell products that weren’t absolutely essential to personal livelihood.

In response to the dramatic shift in spending behaviors, advertisers adjusted their marketing budgets. Performance marketing was viewed as a budget-friendly, cost-effective choice for customer acquisition during unpredictable times in the market.

Which one should you choose?

When considering which channel to focus on, choose the channel where you as a content creator have clear-cut advantages in serving your audience, your brand partner, and your own financial needs. As a marketer, you should aim to:

  1. Be an extension of your brand partner’s marketing strategy. If your brand partner’s objective is awareness, do you have audiences in the right channels to facilitate that? If it’s acquisition targets, will your audience follow through on conversion? The proof is in the pudding: be prepared to have your metrics on hand when discussing opportunities.
  2. Deliver useful, relevant products and services to your audience. Don’t select brands that are uninteresting to your audience or select solely by how much money the brand offesr. You’ve earned your audience’s trust, and they can quickly sniff out when you’re not sincere.
  3. Define and fulfill your revenue goals. Whether you’re looking for reliable, ongoing income streams or shorter campaigns, carefully select partnerships that match your income goals.

Lastly, don’t forget that marketing isn’t always just one swing of the bat: test new channels, models, methods, and content to see what drives the optimal results.  What works in one niche or one audience segment might not work for another, so keep creating to find your sweet spot.

If you’re unsure about working with companies directly, a performance marketing network is a great option to become an affiliate of top-performing brands with competitive CPAs (cost per acquisition). At Fintel Connect, we’ve found that financial affiliate marketing is one of the most lucrative opportunities to increase your affiliate earnings no matter what your niche is.

If you’re interested, join our affiliate network to access a network of top-tier financial brands.

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1 Comment

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    Both are valid marketing strategies, it ultimately depends on your needs as a brand.

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