Influencers don’t always know what’s best.
On Instagram, Kendall Jenner, Emily Ratajkowski, Bella Hadid, and other models once encouraged people to attend Fyre Festival. Yeah, we’re talking about the music event that ended up featuring no music and landing itself seven fraud and class action lawsuits.
Even with high-profile scams like that one, this type of influencer marketing is on the rise. Now, Amazon is taking a bigger bite into the industry. The e-commerce giant announced this week influencers on Twitch can earn commissions on products sold via their livestreams. Earlier this year, Amazon introduced a similar program for YouTube influencers.
For Amazon, these types of partnerships mean more revenue opportunities as they compete against the digital ad duopoly between Google and Facebook and simultaneously bolster their e-commerce business. For the influencers on Twitch — which Amazon owns — and on YouTube, the programs help them earn more money, rather than just a percentage of in-stream ads, commissions from gigs or games, or sales of their own merchandise.
“Feels like a win-win to me,” said Jack Appleby, senior director of creative strategy for marketing agency Laundry Service. “It gives streamers and eSports athletes another very-needed revenue stream, and it gives Amazon some of the most effective, influential salespeople around.”
The program will allow Twitch streamers to feature their favorite products in a section of their page. The broadcaster receives a commission of up to 10 percent of each sale, Bloomberg reported. YouTube influencers receive a vanity URL, where they can direct viewers to their hand-selected products.
In addition to revenue gains, Amazon and participating influencers also could receive valuable data on purchase habits, Appleby noted. Amazon can compare the revenue gains of big-name influencers versus ones with smaller followings.
So far, the program is fairly small. Commissions are available to 22,000 Twitch partners, according to Bloomberg. Amazon declined to disclose how many YouTube partners it has, TechCrunch reported. The program is still designated as in beta. Amazon also plans to extend the program to influencers on other social networks like Facebook, Twitter, and Instagram, according to TechCrunch.
It’s still early days to really understand if influencer marketing is as great as some advertisers make it out to be. But regardless of how it may compare to TV advertisements, brands are projected to spend more than $1 billion on influencer marketing on Instagram alone this year, according to a study by Mediakix.
Yet, the industry remains riddled with scams. There’s events like Fyre Festival, and then there’s the fact that many influencers do not disclose their sponsorships. The Federal Trade Commission regulates the industry and requires that people disclose any sponsorships on social platforms like Twitch and YouTube.
Still, we can expect some questionable practices ahead as Amazon expands its programs.
“Obviously some kids will try to schlep every product under the sun, but the market will self-correct quickly. They’ll see short-term cash increase, then annoy their audience. I’m all for this program,” Appleby said.