How Can Brands Improve the Efficiency of Influencer Campaigns? Fair, Transparent Compensation

By Michael Jaconi, co-founder and CEO at Button

Brands are generating billions of dollars through social media influencers, and most are seeing a positive return on their spending. In fact, 69.7% of US marketers in companies larger than 100 employees used influencers for marketing purposes, and it is estimated that brands spent about $16.4 billion on influencer marketing in 2022.

However, a recent study conducted by the Influencer Marketing Hub, which surveyed over 1,000 influencers, revealed that influencers are not necessarily being compensated at scale based on the impact of their work. In fact, the survey found that the average influencer makes just $5,000 per month through affiliate marketing, which is frequently their highest-ranking revenue stream.

Not only do influencers feel they are not being fairly compensated, but 80% reported that they may be losing out on owed revenue due to the lack of link attribution connecting their promotional content directly to brand sales, making it one of the most pressing issues for influencers and the biggest barrier to fair compensation.

While attribution is not a foreign issue to marketers (and is a frequent discussion when calculating return on investments (ROI)), it is an issue worth resolving if brands want to launch and maintain successful influencer marketing campaigns and recruit high-quality influencers who drive impactful results.

Influencer marketing requires attribution

Influencers make the majority of their revenue by promoting a product or service on personal or branded social media channels. They receive a commission from the brands and products they promote, which is often directly related to the sales they generate. For example, a brand may offer 15 percent of the total sales generated through a specific link an influencer shares with their audience. When an influencer posts content related to the link or directs users to click their “link in bio,” the sales should be attributed to the influencer and added to the total revenue generated by that individual.

While influencers may also make money through other types of brand advertising deals, sponsored content posts, and product collaboration deals, these revenue streams are not the lifeblood of most influencers’ income.

With that said, calculating influencers’ sales and providing accurate compensation requires sales attribution driven by these influencers’ links. Link attribution is the process of determining which clicks resulted in which sales which are a direct result of an influencer’s promotional post. Without accurate link attribution, it is difficult for influencers to reliably grow, understand their earnings, and be confident that they’re being paid what they’re due.

For influencers, this lack of transparency and breakdown in the process is tough to solve as they don’t have large engineering teams or resources at their disposal to invest in ways to correct these breakdowns.

Give influencers attribution and transparency

For influencers, fair compensation includes performance transparency and access to effective, accurate link attribution software. While some influencers work with influencer networks and have more tools at their disposal, not all retailers are equipped with the proper mobile solutions required to provide influencers the best experiences, the highest earning potential, and in the worst of cases, the ability to even be paid for mobile ecommerce sales, which accounts for 7.3% of retail sales. Fixing this issue is precisely why brands must do more to support influencers and work toward fair compensation.

By focusing on fair and reciprocal influencer relationships and providing the tools influencers need to be effective, brands can clearly communicate campaign expectations and create opportunities for talented influencers to create and deliver content and generate sales. A more transparent relationship leads to trust and ensures influencers feel appreciated. As a direct result, these entrepreneurs will be empowered, earn what they’re due, and continue creating high-quality content that drives sales for the brands that support them.

The thing that excites me most about these influencer models is that no user-level data is needed to fulfill this economic exchange of value – which makes it a model likely to survive the changing privacy landscape that is so massively impacting other channels of marketing.