What you need to know:

• Influencer marketing has become a marketing staple, but recognising and rewarding creators beyond top-of-funnel awareness and engagement and more directly for revenue generation hasn’t been a big part of the value exchange. Until now.
• Thanks to a perfect storm of better influencer marketing management platforms, social commerce capabilities, more sophisticated affiliate marketing programs and a desire to diversify revenue streams, the role of influencers / creators across the funnel through to conversion and commerce is now a reality.
• The figures are stacking up. Commission Factory’s global parent company, Awin, shows that between January 2022 and January 2024, revenue directly generated by influencer activity increased 19 per cent, with influencers accounting for 8 per cent of all affiliate marketing transactions globally. Awin also found influencers were 18 per cent more successful in November 2023 during the Black Friday and Cyber Monday sales peaks than the year prior, a sure sign of their growing bottom-line impact on these major sales events.
• Major brands, from Nike and Adidas, through to retailers like Walmart and marketplaces like Amazon are all upping their game when it comes to leveraging and supporting influencers / creators to deliver revenue.
• As Fabulate’s Nathan Powell puts it, creators have a distinct advantage over traditional retailers by engaging directly with their audiences, cultivating a strong sense of community and loyalty that conventional retail environments often lack. 
• For Arktic Fox founder and industry expert Teresa Sperti, the reasons why influencers are the next commerce channel are equally obvious: People selling to people is powerful stuff. “For me to reach and get my product into people's hands, my conduit is to get my product into the environments where people are. This whole rise of content creators being an affiliate-led model for product-based marketing really comes from the fact these brands have realised their audiences and those relevant prospects are sitting with these content creators… it’s about people-to-people.”
• Back when Nick Randall joined Tribe in 2018, influencer marketing was seen as a really powerful mechanism for communities to have great conversations about your brand. He comments: “Fast forward to the point where influencer marketing is 100 per cent performance-based and you pay influencers based on what revenue they bring in. That is great for a brand because it's the ultimate performance.”
• But there are still challenges to navigate in the mechanics. Per Commission Factory’s Alberto Morencos: “There needs to be a conversation around the different commission, payment models. There is a mixed bag of things there with cost per post, cost per acquisition, cost per sale, flat fee. There's no standard there. There needs to be a conversation, but also an education process on the pros and cons of each model.”
• Another is in the tech itself. “We all have our own proprietary technologies and sometimes [they're] a little bit contradictory. So if GA4 is telling the brand something and our cross-channel attribution is telling them something else, and some of our competitors’ cross-channel attribution and tracking is telling them something else, what data do they trust? That's part of the issue as well,” Commission Factory’s Amanda Calkins says. “Not having a centralised, uniform source of truth for data other than Google, which you could argue is still biased, makes it difficult. It makes it a really interesting conversation, but a challenging one moving forward.”

It’s a deal that’s been labelled “smart” by one industry commentator, “category disruptive” by several more, and a reflection of just how important creators have become to the revenue line by many others.

Earlier this year, Moose Toys struck its biggest partnership to date with MrBeast (aka Jimmy Donaldson), the most popular YouTube creator in the world with 289 million subscribers and 52 billion lifetime views, to create a new brand of action figures. Debuting in the US in August and globally in coming months, the product line captures the signature blue and fuchsia panther logo of MrBeast’s brand with Moose Toys’ product manufacturing and distribution, and is positioned as both an ‘enticingly collectible action figure’ and ‘never-seen-before innovation’. It’s being promoted via unique content by MrBeast on YouTube as well as Moose Toys marketing programs and reflects not just the traditional sponsorship or partnership deal, but a revenue and value share agreement.  

“This will be the most anticipated launch of the year,” said CEO of Moose Toys Paul Solomon in the official announcement in January. “MrBeast is wildly iconic and the biggest influencer on the planet. By combining his unique brand of innovation with our Moose wow factor, we have created a phenomenal line of products that will be highly sought after. We’re incredibly honoured he entrusted Moose as a partner and co-creator.”

As Moose Toys CMO Belinda Gruebner told Mi3, influencers and media have become cornerstones not just for brand awareness in Moose Toys’ marketing mix, they’re part of the product development, marketing and distribution story. One of the retailer’s top toys, the Cookeez Makery Oven, sold out twice on Amazon US in 2022 because of an influencer post from Emily Jeanne on TikTok that went viral.

While there is no set ratio on spend, influencer strategy is informed by consumer behaviour and it's seeing the dollars going the creator way. "We have experienced a shift from traditional above-the-line to digital advertising and influencer co-creation so our investment in these areas has increased year-on-year over the past decade," said Gruebner.  

But it goes further than that. As influencers/creators gain more tools and metrics to demonstrate the power they wield through the funnel and as product marketing mechanisms, they’re increasingly looking to take a cut of the sales dollars they’re helping to generate. Earlier this year, Moose Toys also signed a new licensing agreement with emerging Aussie YouTube sensation, The Amazing Digital Circus to be its exclusive toy partner. At Moose, the belief is ideas and collaborations can come from anywhere, Gruebner said.

“No media outlet now will promote that [product] if they don't have an affiliate link. They will promote you as long as they can see the person that's read it goes off to Amazon to purchase and gets a cut for the benefit of promoting the toy. A social media influencer won’t unbox your toy and do it if they can't say 'click down here and go here to buy it'," Gruebner commented. "All of those things are laddering up – everyone wants to know the data, they want to know who that consumer is, and they want a piece of the purchase pie to go with it.”

Revenue numbers begin to stack up

There’s no doubt influencers / creators have been ‘influencing’ product sales for years. They’ve even put their faces on campaigns, products and co-created the odd burger (MrBeast). But in a world where remuneration deals largely revolved around content creation, promotion and ambassadorial partnerships, recognising influencer / creators as a commerce channel in their own right has taken time to manifest. Unsophisticated promo codes and affiliate tools, clunky attribution models and manual processes have stymied maturity here.

Not anymore. Providing better visibility and measurement around the role influencers / creators play through the conversion chain is opening up opportunities for them to also earn commission on sales and revenue. A growing number of affiliate and partner marketing orchestration platforms and programs are making this a reality. Fabulate, Commission Factory and Impact.com for example, all tout automated platforms with management tools not only helping brands and creators discover, connect and manage their relationships, they provide much-needed measurement and attribution around the direct impact influencers / creators are having on the bottom line. In turn, these make clearer how much direct revenue any one influencer is generating for a brand, however micro.

Such direct revenue figures are rising. Take stats from Commission Factory’s global parent company, Awin, which provides a platform for all forms of affiliate management including influencers. Between January 2022 and January 2024, revenue directly generated by influencer activity increased 19 per cent, with influencers accounting for 8 per cent of all affiliate marketing transactions globally. Awin also found influencers were 18 per cent more successful in November 2023 during the Black Friday and Cyber Monday sales peaks than the year prior, a sure sign of their growing bottom-line impact on these major sales events.

“There are major brands behind this like Nike globally and Adidas. Beyond brand manufacturers, it’s also some of the largest global online retailers where we’re seeing influencers playing substantial roles in driving sales,” Commission Factory APAC head of publisher development, Amanda Calkins, says.

“It’s contrary to my assumptions and personal belief over the years; I saw influencers as a slightly less cost-effective branding exercise. That's changing. What we've seen even in the last year is influencer activity and sales driven by last-click, bottom-of-funnel activity have increased by 21 per cent year-over-year. So influencer activity is starting to overtake a lot of other, more traditional affiliate activity by quite a significant margin. We think this trend will probably continue, because that's what our data and research is starting to show.”

In the IAB’s Australian advertiser and publisher industry report released in May 2024, 47 per cent of agency and advertiser respondents said they planned to increase spend in the next year on influencers as an affiliate channel, the third-highest priority after content (61 per cent) and rewards (58 per cent). Of those using ‘social’ as an affiliate channel, 76 per cent were satisfied with the ROI it delivered.  

“Brands typically had influencers sitting with their PR budget or with various different pockets of budget. They would love to bring that into the performance phase, and when we can guarantee them a return on ad spend, it’s essentially rewritten the ROI on their influencer partnerships,” Calkins says. “Ease of discovery and tracking are two huge obstacles when it comes to influencer marketing. The third is the management of influencer partnerships. That’s probably the biggest challenge, because that's the most costly and difficult one to overcome.”

Marketplaces

Martech players aren’t the only ones enabling influencers to engage in a more full-funnel exchange with brands. The rise of third-party marketplaces and social commerce tools are also providing ever-easier ability for influencers / creators to be closer to the actual purchase itself and earn themselves a new revenue stream while they’re at it.

Amazon’s Influencer Program, for example, reportedly had 900,000 affiliate partners globally signed up by June 2024, and launched in Australia 12 months ago. A free program for eligible creators, these influencers earn revenue via their own page with custom URL to showcase products they recommend to their audiences, earning a commission from Amazon when someone then makes a purchase.

“We’re always innovating to make it fast and easy for customers to find and discover great products in our store. The Amazon Influencer Program enables eligible content creators to make helpful, informative product recommendation content for their followers, and earn commissions off qualifying purchases,” an Amazon spokesperson says. Amazon did not comment on how many Australian creators are now participating in the Influencer Program, except to note they’re from diverse categories including beauty, home, fashion, cooking, toys, baby and tech. The marketplace giant has held two events locally to educate influencers on affiliate marketing best practices.

“The program continues to grow both as new creators join, and existing creators grow their followings and explore new ways to engage their audiences – from idea lists to shoppable video content on their Amazon Storefronts,” per the spokesperson.

TikTok Shop, which has launched overseas but is yet to confirm a debut date in Australia, is another way for influencers / creators to sell products directly. Positioned as a personalised commerce solution, TikTok is looking to woo both brands and creators directly with a mix of live shopping, shoppable videos, a shop page and shopping tab features and functionality.

In using Fabulate Discovery data to ascertain the number of creators pushing ecommerce or other sales links via their TikTok or Instagram, figures suggest 1.03 per cent of TikTokers and 5.66 per cent of Instagrammers with more than 1,000 followers are directly engaging with shopping, Amazon, storefronts and sales in their bios.

“Creators have a distinct advantage over traditional retailers by engaging directly with their audiences, cultivating a strong sense of community and loyalty that conventional retail environments often lack,” Fabulate Chief Product and Strategy Officer, Nathan Powell, says. “Platforms such as Etsy, Instagram and Shopify have levelled the playing field, enabling creators to sidestep traditional retail channels and establish direct connections with consumers. Advanced ecommerce platforms equip creators with tools to manage inventory, process payments, and handle logistics with minimal upfront investment.”

With Australia poised for significant growth in this space, we’ll be mirroring international trends, Powell says, noting US revenue is expected to jump from US$67 billion in 2023 to over US$144 billion by 2027, per Insider Intelligence.

Following the audience

The reasons why influencer / creators are becoming instrumental to commerce is obvious to ecommerce and marketing advisor and founder of Arktic Fox, Teresa Sperti. With 5 billion people on social media and some 200 million active content creators out there, the sheer reach influencers / creators boast across social platforms is enormous.

“What influencers are really brilliant at is driving product-based purchase,” Sperti tells Mi3. “If you think about where some of the biggest audiences now are outside of traditional publishing environments, it's not just generally on social media platforms, but with content creators on those social media platforms.

“For me to reach and get my product into people's hands, my conduit is to get my product into the environments where people are. This whole rise of content creators being an affiliate-led model for product-based marketing really comes from the fact these brands have realised their audiences and those relevant prospects are sitting with these content creators. So how can I basically use them as engines to get my products into the hands of people through the mechanism of people. Because it’s about people-to-people.

“What has happened simultaneously is the platforms have realised the same opportunity. Look at Meta, TikTok: Their audiences are far bigger than Amazon will ever be in terms of total audience. So for them, the natural play is how we move into the ecommerce space, rather than just push people offsite to buy. Because that’s what everyone's been using these platforms for – they advertise, then get pushed away. How do they get a bigger clip of the ticket? Through creator networks on their sites.”

According to Sperti, it’s also why ecommerce toolkits in social have been developed in a way that “brings brands and creators closer together from an ecommerce point of view.”

Overseas, major brands such as Amazon and Walmart have been tapping into influencers as affiliate marketing vehicles already. Walmart Creator, for example, gives influencers / creators commission when they set up to share product recommendations as well as promises a space where influencers can connect to each other. Locally, Dan Murphy’s and Myer are examples of retailers with owned, commission-based affiliate programs applicable to influencers / creators.

“Early on, these brands realised this people-to-people based, affiliate opportunity is a thing, so they've gone and created these bespoke programs in order to get their products out there,” Sperti explains. “Yes, they could go and pay for advertising, but actually, let's go to the people who have influence over those purchase decisions. That's why they've stood up those offerings.”

Adding further might to the viability of influencer / creator as yet another commerce channel is live streaming. While not as big in the US or Australia yet, these ‘shoppertainment’ capabilities are taking off in Asian markets, particularly China, says Sperti.

“A brand getting up and talking about a product is not interesting, no matter how good the storytelling is. A content creator, live streaming about the product through either a tutorial or some sort of informational piece is a much more interesting concept,” she says. “Brands like the Amazons and Walmarts aren't just saying ‘we'll create this affiliate program to promote products, and for every sale, you get a clip of the ticket’. They're also bringing together a brand with their platforms and a creator to do live streaming. That's really interesting as well, albeit slightly off centre to that core affiliate model. But again, it's another way in which creators are being leveraged as the vehicle to bring product-based content to market, and to influence the end consumer.

“It's all interlinked, because the flow of traffic, or flow of audience is what's determining all of these models. In order for those platforms to continue to be successful, the content creators have to be making money. How do we make money? It's through the introduction of all of these tools.”

Ultimate brand performance

Impact VP of growth Nick Randall, who was previously chief revenue officer for social media influencer marketplace Tribe, sees the Moose Toys / MrBeast deal as “just so smart of both parties”. Why? it’s delivering more value for both sides.  

“Back when I joined Tribe in 2018, influencer marketing was seen as this really powerful mechanism for communities to have great conversations about your brand which would then lead to lead to a purchase hopefully down the track. Fast forward to the point where influencer marketing is 100 per cent performance-based and you pay influencers based on what revenue they bring in. That is great for a brand because it's the ultimate performance,” he says.

“But also, if you're an influencer and you've built this great audience, no longer are you just pitching to get a flat fee, you actually have this ongoing revenue stream. The more the creative community understands this, the more you’ll really see the creator economy really flourish.”

An emerging influencer / brand style partnership Randall has been privy to is between a services-based application which only not pays a macro influencer an upfront fee, but a performance-based commission once the influencer’s sales hit a certain level.

“A lot of the platforms have trained influencers, especially in this region, to just ask for the flat fee. That's very limited in its view. And I think that says more about the platforms, who charge a markup or margin on the business model, saying we want just one big transaction going through and lots of brands with lots of influences,” he continues.  

“Whereas the ongoing capability of earning is something I think you'll see thaw a lot as more influencers say hang on, why should I only earn once? Why can't I continually earn on the revenue I'm driving? Often, you don't see the end consumer if they aren’t ready to purchase right now but might purchase in a month's time. There’s a lag. This allows that lag to actually be addressed and the influencer to be paid.”

Social Soup MD, Sharyn Smith, is another industry expert who is helping create more sophisticated ways of utilising influencers / creators already through the funnel.

“What we can do is take that influencer content and design very sophisticated, funnel-driven paid strategies. Here's the content we're going to show at the awareness stage, then let's serve them this content which is developed for more consideration and education. Then here's the content we're going to serve them which is much more oriented around now you can buy,” she explains. “You take people on a journey using influencer content, which is obviously the most persuasive types of content. But it's using that within very sophisticated ways, and we've seen incredible success from that.

“It’s thinking differently about how you use the content, rather than the influencers being out trying to sell products and simply getting people to click to buy.”

Thanks to sophisticated tracking, Commission Factory is helping influencers / creators better understand where in the marketing funnel they're most likely to have most impact.

“With the codes and old school tech, you would only know if you were converting on those codes. Now even influencers have a better understanding of where they fall in the journey. For instance, they’re still the introducers bringing that brand awareness,” says product marketing manager, Angelique Bosse. “They can go to brands and say, these are the stats, this is how many people I've introduced to your brand. They might have then gone to a cashback site and the cashback has taken that reward. But even then, we're helping influencers show their value to brands, no matter where they play in the funnel.”

Sorting out commissions and perceptions of value

So just how much are influencers / creators making? UK-based rewards site Like to Know (LTK) reportedly has a millionaire’s club where creators have created £1 million worth of revenue through affiliate links with products they sell. It claims the 20,000+ creators on its own platform generate about US$4.1 billion in annual sales for thousands of global brands.

“Whether the platform is using customer journey tracking, or whether it's just a straight affiliate code, you can see the impact is significant. Let's take fashion, beauty and skin care: There are lots of influencers who are regularly making seven figures,” Randall says.

And it’s a two-pronged attack, he continues. “What the influencer is also saying is 'I'll not only give you that audience and deep endorsement, which is really hard to get in kind of other channels… I'm going to give you sales. And of those sales, so we can have this kind of ongoing partnership, I'd like to be paid commission'. That’s going right down to the influencer being savvy enough to say 'hey, I want an Amazon Shop, TikTok Shop', whatever it might be. Otherwise, why do it? Rather than just doing straight promotion, that’s where it's become pure commerce.”

While the appetite for affiliate is growing on both sides, maturity around valuing different types of affiliate partners isn’t, if the recent IAB Affiliate Marketing event in Sydney is any guide. Conflict in commission schemes such as upfront versus post-delivery payments, measures of success, perceived versus realised value all remain a moving feast.

All this adds urgency to the education piece for Commission Factory publisher development team lead, Alberto Morencos. “We have these tools to prove the value of these influencers influencing these purchases, even though the purchase was effectively closed by a different affiliate,” he says.

“There needs to be a conversation around the different commission, payment models. There is a mixed bag of things there with cost per post, cost per acquisition, cost per sale, flat fee. There's no standard there. There needs to be a conversation, but also an education process on the pros and cons of each model.”

Calkins agrees personal opinions and bias are muddying the water for influencer marketing’s true role in the marketing mix. But potentially contradictory technologies and attribution models don’t help either, she admits.

“We all have our own proprietary technologies and [they're] sometimes a little bit contradictory. So if GA4 is telling the brand something and our cross-channel attribution is telling them something else, and some of our competitors’ cross-channel attribution and tracking is telling them something else, what data do they trust? That's part of the issue as well,” she says. “Who's creating these algorithms? How are we looking at data? Not having a centralised, uniform source of truth for data other than Google, which you could argue is still biased, makes it difficult. It makes it a really interesting conversation, but a challenging one moving forward.”

But the numbers are stacking up. In aggregate, HypeAuditor predicted the influencer marketing market size will reach a staggering US$22 billion by 2025. Contributing factors include the growing prominence of social ecommerce, the redistribution of the advertising budget towards digital advertising, and the increase in the usage of ad-blocking software.

Maturity curve

Australian Influencer Marketing Council (AIMCO) MD Patrick Whitnall points to a case study conducted by global creator company Whalar and Nielsen proving out the ROI on creator-specific campaigns using the latter’s Predictive ROI and marketing mix modelling tool, Compass Planner. It found average ROAS was $2.63 across six campaigns, with a high of $4.5. An optimisation scenario implemented on one of the campaigns revealed that doubling weekly support while maintaining the same number of weeks on air could increase ROAS by approximately 20 per cent on spend of $800,000.

“We’re now at point where as industry, influencers and creators are maturing as a market, much like out-of-home 15 years ago in terms of how it’s measured in a marketing mix model. It tells me therefore that’s where creators and influencers are as we’re looking to work out if we’re measuring the right things within the standard marketing measurements marketers use to prove the value of this,” he says. “The more those pieces of research come out, the more we’ll see focus, investment and attention in this industry.”

Arguably, government legislation and regulations to ensure people are doing the right things in the creator space commercially have taken up a lot of airtime and focus up until recently. In the last 12 months, we’ve seen the Therapeutic Goods Administration updating guidelines, the Australian Tax Office firm up rules around gifting and superannuation, PAYG and GST; and the ACCC put influencers on its watch.

But complementing maturity around the practice of influencer marketing is growing maturity around its outcomes, Whitnall says.

“The market has been dominated by brand partnerships. Over time, as more creators come online, creators have to think about other ways of generating revenue themselves,” he says. “A lot have grown into podcasts as a way to build audience and diversify types of content. But then also, they’re going ‘what is the final outcome for me?’ Either they make their own brands and create their own marketplace around that, or they work with brands they really love and trust and happily recommend, then create an Amazon storefront to help their followers or people watching their videos find out where to get that too.”

CreatorIQ’s report meanwhile, found 55 per cent of the 225 organisations surveyed across the US, North and South America and Europe increased influencer marketing investment year-on-year, with one in four investing over US$1 million or more. For 54 per cent of respondents, up to one-quarter of the marketing budget is going towards influencer marketing and for one in five it’s over half.

“This isn't people just selling protein supplements, these are significant blue chip brands investing heavily in the channel. It's only going to continue rapidly growing as brands get better at identifying the influencers they want to work with, but also the ones that are actually going do the right type of content that's going to generate the greatest number of sales at what time of the day,” Randall says.

“The Amazons, Walmarts, Targets of this world know what works and are prepared to invest in it to lock up these influencers. They see them not just as a media channel but also an absolute sales channel, and they treat them accordingly.”