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 , 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 the influencer world, read these Business Insider Prime posts: 

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Tags: Amazon, Facebook, Nordstrom, Instagram, Youtube, US, Trends, Walmart, New York Times, Tokyo, Coachella, Ken Burns, Box, South West, Seatgeek, Digiday, J Maxx, YouTube Instagram, Linqia, Skimlinks, Tubular Labs, Ulta Beauty, Sovrn, SmartCommerce, Amazon box, Jefferies Edward Jones Evercore ISI, Keith Bendes, Bendes, Macy s Dillard, Business of Fashion Cuts

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