In this article I hope to quickly clear up a common misconception. Both affiliate deals and sponsorships can help effectively monetize your stream. However, they’re not one and the same. Let’s compare sponsorships vs affiliate deals!
Affiliate Deals
An affiliate deal is an agreement where you get a portion of any sale you contribute to. Essentially, it’s a commission.
There are a couple of common affiliate deals I see on Twitch. The most common is Amazon, for good reason. First, it’s something anyone can sign up for. Second, there’s a high shopping density on Amazon so theoretically your community could use it for almost anything. Finally, Amazon owns Twitch and promotes some items through their affiliate agreement. For instance, game purchases through Twitch fall under this Amazon umbrella.
After that, you’ll see all kinds of deals. Some off the top of my head are Madrinas Coffee, GFuel energy, Soylent, Razer, Me Undies, and Humble Bundle. There are tons more.
They key is to match the deal to what your community would actually buy normally. It doesn’t make sense to have an affiliate offer if your community isn’t motivated to buy.
As with any deal you make for your business reading and understanding your contract is paramount. Some affiliate deals have sales targets and breakpoints that can dramatically impact your compensation.
Sponsorships
Sponsorships are where a company pays you to put their branding (or have mentions) on your stream. In this case you’re not getting a commission based on sales but instead being paid for your clout.
Common sponsorships are things like a company paying to have their logo in your scene, getting paid to play a game, or a hardware company paying you to visibly use their products.
You should get a lawyer to review any sponsorship offer you have. You might have clauses that include performing certain actions which would negate the deal if you miss them. Don’t let worrying about spending a little cause you to miss out on making a lot more!
Comparison
The biggest difference between a sponsorship and an affiliate deal is that an affiliate deal is commission based and a sponsorship isn’t.
The larger your stream gets the more likely you are to receive sponsorship offers. One of the major reasons for this is that there’s a lot more risk to a sponsorship, for the sponsor, than there is to an affiliate deal. After all, they’re on the hook for paying you to access your clout. In an affiliate deal they have a lot more security because they only pay you when they also get paid.
You can think of it as the difference between a salaried job and one based on sales. Yes, you could lose your salaried job if the outcome isn’t what the company was looking for. However, during the time that you’re employed you get paid regardless of if you literally help sell products. An affiliate deal is basically a sales job. It has more potential upside (theoretically unlimited) because each sale gives you some revenue. It’s possible that you have a large, supporting community and a good payout and make a ton of money from affiliate deals. If you’re Ninja you’ll make bank off of an affiliate deal.
From a planning perspective recurring sponsorship deals are easier. That’s because they tend to produce consistent, predictable revenue. Unless the affiliate deal is for a recurring revenue product then sales tend to be unpredictable. However, if you have a large enough community you’ll likely get some baseline level of support. Oftentimes it can make sense to find a reasonable average amount and plan on that.
Conclusion
Both sponsorships and affiliate deals can be good for your streaming business. They’re opportunities for more revenue which can help you upgrade the stream, cover tax payments, or just keep you fed and happy. Additionally, they’re often great opportunities for more exposure. Companies you’re working with will often post about you on social media to help drive sales. That’s a win-win since you’re both borrowing the clout of the other.
When you’re deciding which opportunities make sense for your business it’s appropriate to weigh the differences between sponsorships and affiliate deals and consider which makes the most sense with your community. Is stability or potential earnings more important? Will your community go for an affiliate offer? If you’re going the commission route, how do you maximize the hype in your community?
You don’t have to figure this out alone. This is what we do- help streamers make great money decisions. If that’s something that sounds interesting to you reach out me or schedule some time for a free consult. You can check out what I do here.
