INFLUENCER MARKETING VS. AFFILIATE MARKETING VS. MULTI LEVEL MARKETING
You may have heard multi level marketing (MLM) reps compare multi level marketing to other types of marketing. These might include affiliate marketing, influencer marketing, or they might have called it something completely different like social selling. MLM is MLM. You can’t slap a more appealing label on it to cover up what it truly is. That’s not how this works. In today’s post I’ll be breaking down what each of these forms of marketing are. In addition to why they are not the same. Maybe this post will help someone reading this with a rebuttal to these types of claims from MLM reps. I do believe that some of the confusion may come from MLM companies. Due to having some of their ranks called Influencer or Affiliate.
Sometimes MLM reps have commented on my Youtube videos asking what credentials I have that I can be speaking on this topic. I’m not a huge fan of talking about my education because I went to school for myself, not for society. But, I have a Bachelor’s and Master’s degree in Business Administration with concentrations in Management and Marketing. Those are my credentials, however (huge emphasis on the term however), it doesn’t take a degree or rocket science to do a quick google search.
All you have to do is look up the definitions for these different types of marketing strategies. You’ll very quickly find out that *spoiler* they are all different. Which means, this argument that reps have is a weak one. They just regurgitate what their uplines tell them, who most likely don’t know what they’re talking about.
Related: An introduction to the anti MLM movement.
INFLUENCER MARKETING
Let’s start off with the wikipedia definition of Influencer Marketing.
Influencer marketing (also known as influence marketing) is a form of social media marketing involving endorsements and product placement from influencers, people and organizations who have a purported expert level of knowledge or social influence in their field. Influencers are someone (or something) with the power to affect the buying habits or quantifiable actions of others by uploading some form of original-often sponsored-content to social media platforms like Instagram, Youtube, Snapchat, or other online channels. Influencer marketing is when a brand enrolls influencers who have an established credibility and audience on social media platforms to discuss or mention the brand in a social media post. Influencer content may be framed as testimonial advertising.
In other words, when it comes to influencer marketing, you get paid, unlike the majority of people within these MLM companies. As an Influencer, you do not need to recruit your competition. If you do decide to talk someone into Influencer Marketing, you don’t benefit off of them every month with what they sell, buy for themselves, or the team they create. When you sign a contract with a brand, there is monetary compensation (along with product as well in most cases), in exchange for whatever their terms are. This may be social media posts, blog posts, videos for Youtube, etc. There may be an exclusivity clause in that contract as well which states that you cannot promote a competitor within a certain amount of time. Of course, each campaign will differ, but you, as the influencer, have your own rates as well.
BRAND DEALS: THE INFLUENCER HAS A SAY
Sometimes brands offer less, but you are able to negotiate or walk away from the offer and stick to your rates. I know of some Influencers who have lowered their rates because it’s a brand in which they wanted to build a relationship with. Your rates can be on a case by case basis as well. This is because it depends on exactly what the brand is requiring. Your expenses may include hiring a photographer, renting out a room or home for your photoshoot, maybe you need to hire other models to be in the shots, etc. Or you may just be able to take a picture without hiring a fancier photographer than usual and you can do it in the comfort of your own home. That’s why it all depends.
INFLUENCERS ACTUALLY HAVE INFLUENCE
Another side of influencer marketing that these MLM reps don’t seem to understand, judging by what their definition of it is, is that as an influencer you are influencing others. Your audience, followers, subscribers, readers, etc. trust you enough that if they see you using something they want to try it. As an Influencer, you have more integrity than MLM reps. This is in most situations, because I’m very well aware that there are terrible influencers out there. MLM reps are sales people, and when it comes to influence, that should come naturally. It shouldn’t feel forced.
When ethical Influencers are sponsored, you can usually tell because they provide the proper FTC disclosure. However, they find a way to make it cohesive with the rest of their content. Or find a way to advertise it that will influence their audience more than maybe another Influencer’s audience. An MLM rep isn’t influencing anyone. They are trying to either sell a product, or the majority of the time they are trying to recruit people onto their team.
Two great examples of Influencers who have influenced me to purchase something recently are Lexicon of Style and Style My Mind Jenn. Lexicon has spoken about her guasha routine before, and because of her, I started looking into it. I’m actually planning on writing a blog post about that sometime within the next few weeks. While I didn’t buy anything from her through an affiliate link (because I didn’t see one), she influenced me to look into what this was and I bought my own items for it. Whereas, Style My Mind Jenn links her outfits and accessories on Instagram. I’ve actually bought through her affiliate link because I think it looks super cute on her.
Even when these two Influencers have sponsored posts or campaigns, while you can tell it’s sponsored due to their disclosures, it still flows into their regular content. In addition, they didn’t reach out to me to either purchase the products, and they didn’t ask me to join their team.
MY EXPERIENCE
I’m considered a micro influencer, but I prefer to refer to myself as a content creator. I have an audience, but not large enough to influence (in my opinion) like other Influencers. In the past, I have done campaigns with brands. The way that it worked for me is I had to pitch my idea to the brand. If they liked my idea it was approved.
Then I was either sent the product or I was sent money to purchase the product in store. I was given a deadline and once my posts went live, the brand reviewed them. After a certain period of time (whatever was allotted in the contract) I was paid. I haven’t done a sponsorship in a bit. I’ve been working on building my audience more than pitching brands any creative ideas I may have. Affiliate Marketing has been something I’ve been working on lately, but we will go over that in a bit. However, I hope that these examples and explanations helped educate you about what Influencer Marketing is.
Related: How to say no to an MLM pitch.
AFFILIATE MARKETING
Affiliate marketing is used by Influencers and content creators, however, it it different from Influencer Marketing. According to Investopedia, this is what their definition of affiliate marketing is.
Affiliate marketing is an advertising model in which a company compensates third-party publishers to generate traffic or leads to the company’s products and services. The third-party publishers are affiliates, and the commission fee incentivizes them to find ways to promote the company.
The Internet has increased the prominence of affiliate marketing. Amazon popularized the practice by creating an affiliate marketing program whereby websites and bloggers put links to the Amazon page for a reviewed or discussed product to receive advertising fees when a purchase is made. In this sense, affiliate marketing is essentially a pay-for-performance marketing program where the act of selling is outsourced across a vast network.
I can see how some MLM reps who aren’t educated enough in what affiliate marketing is might see this to be the same as MLM. The above definition seems to be somewhat similar sounding, minus the multi level aspect of the marketing model. If the reps were just selling products and providing people with their link, in addition to not needing to spend money out of pocket in order to meet a quota, then yes it could possibly be affiliate marketing. The reps fail to remember that in order for MLM to work, you need a downline. This means you need to recruit people. You cannot just sell the product. Well, you can if you really want to. You just won’t make nearly as much in commissions as those who do recruit.
A FURTHER EXPLANATION OF AFFILIATE LINKS
I use affiliate marketing through this blog and my Instagram. Whenever I link products I use, or outfits I wear, I use either Like to Know It (also known as Reward Style) and Shopstyle. I have used the Amazon Affiliate Program in the past, however I didn’t have a lot of success with it. Which is why I stopped using it. When it comes to using affiliate links I do disclose on the right sidebar that I do post affiliate links which I receive a commission from if you purchase, along with the disclosure page at the top. Which is something you should be doing to be FTC compliant.
If you don’t do this, it’s not just going against the FTC but in my opinion it’s deceptive advertising. Your audience should know that if they click on a link and purchase something, or if they just click on it that you receive a commission.
To break this down a little bit more, let’s go over how LTK works. You do have to fill out an application, then be accepted into LTK. You can also be invited to join. There are retailers who have signed up through LTK as well. Each retailer has a different commission rate. For example, when I link Amazon items, it tells me that the rate is variable, whereas if I link Boohoo items, it shows a specific rate. Which means if someone uses my link and purchases through that, I receive a commission off of their purchase. Once I reach $100 I receive a payout from LTK. All I have to do is link items.
If I choose to invite someone or refer someone, I make a very small commission off of their sales for I believe it’s a year. However, neither of us need to hit a quota or purchase anything from LTK each month. We can actually use the affiliate marketing tool as we please. If I’m going into labor and sitting at the hospital, I don’t have to still be linking items or “working my biz” in order to maintain a rank. Before any MLM reps tell me this doesn’t happen, oh it does. This video that I posted on my Youtube channel shows proof of just that. You can make a decent income off of affiliate marketing. But I don’t recommend putting all of your eggs in one basket.
Related: How to spot an MLM from a mile away.
MULTI LEVEL MARKETING
According to Investopedia, this is their definition of multi level marketing.
Multilevel marketing (MLM) is a strategy some direct sales companies use to encourage existing distributors to recruit new distributors who are paid a percentage of their recruits’ sales. The recruits are the distributor’s “downline.” Distributors also make money through direct sales of products to customers. Amway, which sells health, beauty, and home care products, is an example of a well-known direct sales company that uses multilevel marketing.
In other words, MLM is completely different from Influencer and Affiliate Marketing. MLM is called multi level for a reason. While multi level marketing is a legal business model, it doesn’t necessarily make it ethical, or the tactics used ethical. Nor does it mean that every MLM company is operating within the legal limits. There have been plenty of MLM companies that have been shut down or forced to restructure due to being deemed a pyramid scheme by the FTC. There is one article written by the FTC (click here) that can help you differentiate between a legal MLM and an illegal MLM/pyramid scheme. I always link this article in my Youtube videos and at the end of my anti MLM posts here on this blog.
MLM IS A LEGAL STRUCTURE
When I use the phrase ‘legal MLM’ on my Youtube channel, I’ve had people who are anti MLM have an issue with this. While I understand the frustration, by definition multi level marketing is not illegal. However, some MLMs can be walking a fine line or have already crossed it into the territory of illegal. As an anti MLM advocate who uses fact based information and statistics, I cannot say that all MLMs are illegal. They’re not.
Unethical? Absolutely, but that’s my opinion. MLM companies and their reps use deceptive marketing tactics to pitch the dream and lifestyle. As with any marketing model, you have a niche or target market. People within MLM are being deceived into signing up for these companies because they fit a target market.
MLM reps will recruit anyone with a pulse, but we do see them targeting mostly women, or people at their most vulnerable state. Whether that be because you’re looking for a community, or if you’re a mom looking to stay home with their kids. Maybe you’re in a lot of debt and yearn for financial freedom. The list goes on because each rep/upline has a different niche. What one rep’s “why” is, may not resonate with everyone. The MLM reps in turn become the MLM company’s best customers. Which is why I think the MLM structure is one of the worst types of business models. Along with one of the most deceptive and manipulative.
Related: Why MLMs are called predatory businesses.
ARE THESE 3 THE SAME?
I think at this point in the post, it has become abundantly clear how different these three types of marketing are. While they may all be a type of marketing or advertising, they have different names for a reason. Multi level marketing reps should not be using these names interchangeably. That would be like me calling our business an LLC one day, then a sole proprietorship the next, and a C corp the following day. They’re all type of legal structure for a business, but you can’t use the terms interchangeably.
I do believe part of the disconnect stems from the MLM companies themselves. Some of them have ranks that are called Influencer or Affiliate. It’s just a term being slapped on what it truly is, which is an MLM rep. No matter what these companies call it, until you change your business structure, you’re a multi level marketing company. It’s not Influencer or Affiliate marketing. I truly despise that these companies and reps are only calling it this so that they can sound more appealing. It’s to draw more people into these unethical businesses.
Related: How MLMs ruin relationships and friendships.
Disclaimer: This is all based on my opinion and research I have done. Please do your own research and fact checking. Section 107 of the Copyright Act provides the statutory framework for determining whether something is a fair use and identifies certain types of uses—such as criticism, comment, news reporting, teaching, scholarship, and research—as examples of activities that may qualify as fair use. Second Disclaimer: Anything said in this post is for entertainment purposes, and my opinions.
Great resources to further your research and education:
Jon M Taylor’s (MBA, PhD) Study: The Case for and against Multi Level Marketing
AARP’s Study of Multi Level Marketing: Profiling Participants and their Experiences in Direct Sales
Steven Hassan’s BITE Model
FTC’s article of a Pyramid Scheme vs MLM
The rest of my anti MLM Mondays posts can be found by clicking this link.
My Anti MLM Educational & Commentary content on Youtube.
