You bet it is!
To be fair, I’m a pretty die-hard advocate of Performance Marketing, and tend to see hints of its existence and absence in every marketing strategy known to man. That being said, I truly believe that Influencer Marketing checks off all of the boxes needed to be considered a performance marketing strategy.
#1: Performance Tracking
Let’s start with the simple mechanics of Performance Marketing: tracking. Without the tracking component, Performance Marketing wouldn’t exist. In order to understand what performs, what works, what doesn’t work – we need to track activities.
When it comes to affiliates, we track impressions, clicks, sales, leads, conversion rates, LTVs, refunds, times spent on pages, bounce rates, and so on. Affiliate managers are able to track and analyze the performance of each affiliate in their program, each product those affiliates promote, each offer the affiliates broadcast, and the cross-sections of each of those performance measures.
The same can be true for Influencer Marketing. In fact, many savvy advertisers have begun using their affiliate program tracking links and attribution models to track the performance of their influencers alongside and/or in conjunction with their affiliates. Whether or not they use their affiliate tracking and reporting platform, advertisers can assign each influencer their own tracked links, landing pages, hashtags, and coupon codes to track the activities of the visitors and customers back to the referring influencer.
In my humble opinion, if an advertiser isn’t implementing tracking mechanisms into their Influencer Marketing campaigns, they are doing it wrong. Placing performance tracking at the heart of Influencer Marketing will be key in seeing this popular strategy stick in the long run.
#2: Performance Compensation
There’s a interesting proclamation from member, Matt Frary of SmarterChaos… it goes something like this: Affiliate Marketing is a compensation model. That quip has been shared by Todd Crawford of member, Impact Radius from both the Affiliate Manager Days stage and the Influencer Marketing Days stage.
The statement resonates in both settings.
While many affiliate marketers may argue that there is so much more to affiliate marketing than the compensation model, it’s hard to argue with the fact that merchants and advertisers ask affiliates to go out and promote in a wide variety of ways – but they all compensate the affiliates based on their performance. Commissions on the sales they refer, bounties on the leads they generate… merchants compensate affiliates by sharing a piece of the revenue they refer.
Whether influencer marketers funnel activities through their affiliate programs or not, they too can and ultimately DO compensate influencers based on performance. At the most basic level, compensation stops when an advertiser determines that a particular influencer isn’t performing at an expected rate and simply stops hiring the influencer. At a sophisticated level, influencers are compensated based on the amount of business they refer to the advertiser with commissions on sales, bonuses for reaching thresholds, and tighter partnerships like co-branding, “celebrity” appearances, and other public-facing activities that tie the influencer’s brand to the advertiser’s brand (and visa versa).
As Influencer Marketing matures, I predict that we’ll see many of the same evolutions in tracking and compensation as we have in Affiliate Marketing. Again, savvy advertisers have already picked up on this and are running their Influencer Marketing strategies as an extension of their affiliate programs.
#3: The Third-Party Endorsement
While both influencers and affiliates have been asked to use ad units like banners, infographics or video spots, advertisers (should) agree that the most valuable content in both of these strategies is that which the influencer or affiliate creates. And out of that publisher-generated content, the best is the endorsement. That third-party voice saying, “This product is great. I tried it and liked it, and I think you will too.”
Whether it’s in words, a video, or a photo – influencers and affiliates who communicate with their audiences with passion, intelligence, and authority are the heart and soul of both Influencer and Performance Marketing.
Just as I predicted a similar pattern in compensation models, I predict a similar crack down from government authorities on Influencer Marketing as we’ve seen on Affiliate Marketing. The FTC’s focus on disclosure is a clear indication, that these third-party endorsements that both strategies rely on are viewed as one, regulation-worthy practice in the eyes of the consumer protection agents. How long before the tax agents begin to see the similarities?