Influencers are seeing a big bump in affiliate link sales as ecommerce surges, but it could be threatened as major retailers cut programs

Amber Venz Box, RewardStyle's founder

  • As efforts to contain the coronavirus outbreak shutter
    brick-and-mortar stores and keep many people at home, online
    shopping is spiking. 
  • Influencers and affiliate marketers who earn revenue by
    promoting ecommerce sales from their posts on social media are
    reporting up to a 30% bump in affiliate link activity in
    March.
  • Affiliate marketing is one industry category that’s growing at
    a time when many advertisers are canceling influencer campaigns,
    and travel and events-based revenue is shutting down for digital
    creators.
  • But the affiliate bounce may be temporary, as some retailers
    are shutting down their commission-on-sales programs to save on
    costs in order to counter significant financial headwinds.
  • Click here for more BI Prime stories.

The affiliate-marketing industry is getting a boost this month
as at-home consumers spend more time online and retailers lean into
ecommerce sales after
shuttering brick-and-mortar locations
around the world.

Companies like RewardStyle and SmartCommerce that earn revenue
by driving online sales through influencers’ promoted posts and
product reviews are reporting spikes in affiliate link activity in
March.

“Click-to-cart is becoming really popular right now,” said Keith
Bendes, brand partnerships lead at the influencer marketing firm
Linqia, which partners with SmartCommerce and cited the company’s
data in a recent webinar on the “The State of Influencer Marketing
and COVID-19.” “It takes the consumer directly to Walmart.com or
Target.com or Amazon so the product is already in the consumer’s
basket,” Bendes said. 

SmartCommerce reported a 30% increase in ecommerce orders driven
by social-media posts and an 18% increase in “cartings” (people
added a product to an online shopping cart) from social-media ads,
as of March 20. Competitor RewardStyle is seeing a similar spike in
influencer-marketing activity this month, noting a 30% increase in
the number of influencer campaigns it’s set up in March to drive
ecommerce sales for brand partners.

“It’s really interesting to see that brands are leaning in,”
said Amber Venz Box, RewardStyle’s president and cofounder. “This
is such a time for finesse, so when an influencer can humanize a
brand and place it in the appropriate context for the consumer, you
can’t replicate that.”

From a retail perspective, commission-on-sales is up
meaningfully both week-over-week and year-over-year in March, Box
said. “The gross merchandise value of the sales that we know that
we are driving and are trackable is up materially.”

Affiliate marketing has long been a popular monetization tool
for fashion influencers on Instagram, tech experts who review
products on YouTube, and more traditional publishers like Insider,
Vox Media, and The New York Times (which generates affiliate income
on its review site, TheWirecutter.com). Like other categories
within the influencer industry, affiliate marketing has grown
quickly in recent years as social-media creators and digital
publishers have learned they can use their influence to drive
purchases. The category was projected to grow to $6.8
billion
this year, though shifts in the global economy
associated with the coronavirus pandemic are likely to adjust
year-end earnings in all industries.

As efforts to contain the coronavirus outbreak have shuttered
physical stores and kept more people at home and
more engaged on social media
, the affiliate-marketing industry
is helping to drive an alternative revenue stream for retailers and
influencers alike who are both hurting in other areas of their
businesses. 

“Consumers are spending more time within creator content,” Box
said. “For our retail partners, almost all of them are closed for
offline. This has really forced all customers to move to an online
model, and so that has been something that has been particularly
compelling for the influencer industry and a major tailwind for
them as all sales have really shifted online.”

RewardStyle works with over 5,000 different retailers (including
Amazon and Walmart) to track product sales stemming from posts by
the roughly 70,000 influencers in its network. 

The company’s recent bump in revenue is also tied to the
decision by many brick-and-mortar retailers to post sales on their
websites in order to encourage online shopping as more consumers
are stuck at home this month, Box said.

“Nordstrom has had a 25% nearly site-wide sale,” she said.
“These are really compelling high promotional events that are
driving material sales for these retailers, and that has been one
of the biggest things that has moved our sales volume. Consumers
feel like they can’t miss out on a deal.”

But while influencers,
publishers
, and marketing companies have seen a bounce in
affiliate sales this month, these gains may be short-lived. Major
retailers like Macy’s, Dillard’s, T.J. Maxx, and Ulta Beauty and
companies outside the retail category like Kayak, Emirates, and
Wyndham are pausing their commission-on-sales programs in order to
cut costs, according to
The Business of Fashion
.

Cuts in affiliate commissions for brands like Emirates and Kayak
are less surprising as many travel companies are
postponing marketing campaigns
during the coronavirus pandemic.
Advertisers focused on travel and events have been hit hard this
month as US airlines
contemplate shutting down all domestic flights
and major events
like the Tokyo Olympics, South by South West, and Coachella are
postponed or cancelled. Ticketing platforms like SeatGeek have also

suspended
their affiliate programs “due to the significant and
increasing number of live events cancelled or postponed in reaction
to COVID-19.”

The number of companies who will end up shutting down affiliate
programs is a moving target. The content monetization platform,
Skimlinks,
told Digiday
that 81 out of 27,000 merchants have either cut
programs or brought their rates to zero dollars, while other
companies like Sovrn have observed increases in affiliate
commission rates in categories like online food ordering and job
search referrals.

Changes in order and shipping logistics may also have an impact
on the affiliate business in the coming weeks. Amazon, which
represents roughly
50%
of ecommerce activity,
suspended
shipments of all nonessential products to its
warehouses from sellers, and
pushed back delivery dates
for these items for both its regular
and Prime customers. If other major retailers follow suit,
influencers and affiliate marketers who focus on nonessential goods
like luxury will take a hit. 

“When it comes to shipping, we’re really just seeing the most
pronounced impact on Amazon,” Box noted. “Other retailers are
holding steady when you look at a Walmart or other retailers. Of
course, Walmart has its offline [stores] and that’s still up and
available for shopping.”

For more information on the economic impact of the
coronavirus outbreak on YouTube and the digital creator world, read
these Business Insider Prime posts: 


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Source: FS – All Tech News
Influencers are seeing a big bump in affiliate link sales as ecommerce surges, but it could be threatened as major retailers cut programs