Last week, I announced something that I firmly believe will rock the NFT space in a major way once word gets out and the right combination of (1) an NFT drop team and (2) the right NFT space influencer(s) adopt this. I’m speaking about on-chain affiliate marketing in the NFT space.  It’s not a matter of IF this will ever happen; it’s WHEN. 

That all said, I want to discuss budgeting, as I didn’t get into many specifics in that article about actual pricing strategies and recommendations. So let’s start with the premise that NFT TEAM A has caught the interest of NFT SPACE INFLUENCER B. (Our program allows for multiple influencer affiliates, but I’m just keeping it simple here.) The question is: How much ETH would the INFLUENCER earn?

The answer is that this is a function of the number of available mints, the minting price for those who mint via the affiliate link, and the commission paid out per sale to the affiliate. A budget, therefore, would look like this:

So, in this scenario, we have an NFT drop of 10,000 tokens, with 300 help back for team/marketing/etc., leaving 9,700 mintable tokens. The team’s plan here is to mint them at 0.09 ETH each. However, as a part of this special affiliate program, the team has accepted two important points:

So, to summarize all of that: NFTs would normally mint out at 0.09 ETH (~$144) each, but they can be minted via an affiliate link for 0.08 ETH (~$128) each, and furthermore the affiliate would receive a 0.01 ETH (~$16) commission for each mint.

When you calculate the entire mint (assuming a 100% mint-out via affiliate links), the project would generate 776 ETH in total revenue, with 97 ETH going to the affiliate(s) and 679 ETH (gross) going to fund the project.

Industry Norms

Most web sites covering affiliate marketing report that average commission rates in the affiliate marketing industry range from about 5–30%. That’s a pretty wide range!

But I can tell you from personal experience in corporate sales that a 10–20% commission is also pretty standard. Add a little premium for the NFT space, and I think it’s fair to target somewhere on the higher side of the 5–30% range.

Keeping mind that a major component of this new affiliate program is full transparency, I’d further assert that, while influencers could demand much more than I’ve budgeted in my example, any reputable one would not do so because any reputable one would want the project to succeed.

Ergo, in this example case shown above, the “cost” against a full-price mint-out (9,700 tokens @0.09 ETH) with zero influencer involvement would be about 22.22%. However, it’s tough to properly quantify such a thing because, without influencer involvement, the probability of most otherwise unknown sets selling out is (unfortunately) almost zero.

In terms of actual revenues (9,700 tokens @0.08 ETH), the marketing cost was actually more like 12.5%. (For every 0.08 ETH coming in, 0.01 went out to affiliates.) That may sound a little low, but don’t forget that the affiliate has passed along the same amount of savings to his/her followers.

So, I’ll let you do any analysis you’d like on that side of things, as there are many ways to look at all of this data. The bottom line is this: Affiliate marketing in web3 will (1) bring a much-needed level of transparency to the space, (2) provide value to reputable influencers, (3) provide value to reputable influencers’ followers, and (4) allow NFT teams to fund projects, reach wider audiences, and build out communities.