With the development of the internet society, the
success of social media marketing advertising is very evident. Among them,
influencer marketing is gaining attention due to its great benefits.
It's a cost-effective advertising method that can
achieve high CV impact at low cost, but how influencers are rewarded will also
affect results. There are three types of remuneration, performance-based
remuneration type and fixed remuneration type, and hybrid type which uses both.
In this article, we will compare and explain the
types with a focus on performance-based influencer marketing.
performance-based influencer marketing?
Influencer compensation is central to the cost of
implementing influencer marketing. Here, let's take a look at performance
rewards (affiliate rewards) which are the core of online advertising.
When practicing influencer marketing with
performance rewards, it is possible to set out a detailed CV
In social network advertising, there are
different CV settings for performance-based advertising. As the main conversion
setting, you can set the following goals.
Purchase of goods and services
Acquisition of business
negotiations such as inquiries and document requests
Application for sample
Event application (securing
Mail Magazine Registration
You can freely set other CVs, but the point is
that you only pay when you achieve the conversion you set. For companies
requesting advertising, a fairly clear marketing strategy is possible. The
biggest characteristic of performance-based influencer marketing is that
"costs and results match numerically".
A unit price is set for each success fee. For
example, if you sell a beauty product with a sales price of $1000, you will
receive a $100 performance fee. The price of this unit is negotiated between
the influencer and the client.
Since the difficulty of achieving results varies
depending on the conversion material set, it is important to set a unit price
that both parties can agree on for each individual project.
Rewards are generated for the
number of "likes".
Number of Plays: Rewards are
generated based on the number of times the pasted ad video is played and for
Billing per click: Billing for
each click on embedded banner ads
Remuneration accrues according to
the number of products purchased
These performance rewards are typically used by
affiliates who run blogs and advertising sites. But recently they have also
been adopted as a reward system for active influencers on TikTok and Instagram.
This is because there is a growing need to
enhance the branding effect as well as the response to advertising that
increases awareness of the products and services offered by companies. It is
possible to improve sales performance by implementing cost-effective
affiliate-type and performance-based advertising with highly influential
Next, let's summarize the pros and cons of
influencer marketing based on performance-based compensation
Performance-based influencer marketing has three
Increase cost-effectiveness with
precise conversion settings
Avoid wasting money
Improves the quality of influencer
1. Cost-effectiveness can be
improved with precise conversion settings
If the reward type is based on cost per follower
unit, it may be difficult to clarify advertising objectives. The advertising
materials deployed will also vary greatly depending on product name recognition
and sales promotion. Combining objectives with reward systems clearly defines
In addition, it is also an advantage for the
client to numerically judge the level of achievement, and this has the effect
of avoiding ambiguous results.
Avoiding wasteful expenses and reducing corporate risks
Companies that practice influencer marketing
often run into financial problems. Offering rewards per follower tends to be
expensive if the desired conversion rate is not reached. However, this problem
is solved by making it a result-based reward type.
Also, even if the number of followers is
insufficient due to budget constraints or the desired results cannot be
achieved due to inconsistencies, a system that rewards the results will avoid
Improving the creative quality of influencers
The tricky part about social media advertising is
that it doesn't mean "influential with lots of followers =
high-performance rate". Often, the expected PR effect is not achieved,
which does not lead to increased sales.
This is a problem due to the lack of completeness
of the ad content posted and the mismatch of influencers.
For influencers who receive a request, the leeway
to make award decisions can make it difficult to maintain motivation to
increase the impact and quality of content. Also, immaturity that is not
familiar enough with influencer marketing also determines the results.
Thus, if you are only rewarded by results,
influencers can be expected to focus on the perfection of ad content and focus
on creating results that emphasize performance as much as possible.
Pay attention to the following four disadvantages
of performance-based influencer marketing:
It's hard to secure highly
influential influencers with performance rewards
The reward for achieving the
result will be more than the fixed reward.
Total advertising spend is
difficult to estimate
Conversion value may decrease
1. It is difficult to secure
highly influential influencers with performance rewards
Not only is influencer marketing but also social
media marketing; those who work in advertising seek fixed rewards rather than
performance rewards. This is because the barriers to achieving goals are high
with performance rewards and difficult to lead to income.
If the product is popular, it will be easier to
collect clicks and sales, so the performance fee unit price will be set quite
low. On the other hand, the reality is that high-value products or low-profile
products with little exposure won't get likes or even play videos.
Rather, specific reward types, where rewards are
given based on the number of followers, are more attractive to influencers.
Influencers with more followers prefer fixed rewards over performance rewards.
2. Compared to fixed rewards,
the rewards for achieving results tend to be higher.
There are many cases where it is difficult to
achieve conversions through social media advertising. Thus, the unit cost of
performance awards is not cheap at all. Pay special attention that the unit
price for sale will be more than 10% of the price.
When we used popular influencers to increase
conversion rates, we found that the more popular the influencer, the higher the
Also, thanks to popular influencers, branding
will be promoted and compensation for influencers will increase as results
improve. As a result, there is a risk of cost increase.
3. The total amount of
advertising expenditure is difficult to estimate
Performance-based rewards are paid when results
are actually achieved. Thus, there are times when it is difficult to properly
set a budget that divides time.
Of course, it is possible to stop the project
when the budget is reached, but the disadvantage is that it is not possible to
4. The quality of conversion may
For influencers to receive rewards, the primary
goal is to increase profit margins, and sometimes they try to create content
that targets simple results rather than post quality. In that case, the normal
application of the result will not be possible and the result will not be generated.
In influencer marketing, it's rare to increase
sales by posting creative posts focused on overselling, and even increasing
sales may not gain fans or improve the company's credibility.
Influencer marketing is a very interesting
advertising method in the digital market. It is becoming a major media for all
age groups. As the number of users who dislike existing ads is increasing, it
can be said that this measure is going to be relatively effective.