According to some estimates, brands are expected to spend $15bn on influencer marketing by 2022. But media reports also indicate that the influence of influencers in marketing circles could be waning. A brief look at the issues involved:
Influencer marketing: origins and after
About a decade ago when blogging was popular, automobile brands would first reveal details of a new model to that community instead of a traditional mass media ad. Even prior to that, Sunsilk from Unilever created an all-girls virtual community, Gang of Girls, with over 200,000 members. While it was popularised by traditional advertising, the port of call was a website which had four stylists giving fashion tips. The intent was influence the influencers – all at a relatively low cost. The rise of social media platforms, especially Instagram, and its ability to complete purchases has fuelled the growth of the influencer industry.
What are key factors driving influencer marketing?
While mass media advertising is still effective and relevant for most brands, the rise of social media has given consumers access to information. This has allowed consumers to check advertising claims on their own and develop scepticism about what a brand tells about itself. A brand is no longer only what it claims in advertising, it is what consumers tell each other based on what they see and hear on the web in terms of reviews and recommendations. Consumers are also skipping online ads through Adblockers. In this context, opinion leaders and those considered to be ‘voice of authority’ on a subject or a niche domain have a better chance of being heard out and more importantly, believed or trusted.
What are the kinds of influencer strategies adopted?
Broadly, influencer marketing can be earned or paid. For a long while, the cool quotient of Apple products was aided by its placement in cult Hollywood movies and TV shows. Katy Perry’s recent song ‘Harley’s in Hawaii’, has been streamed over 20 million times on Spotify and the music video garnered over 12 million views. In exchange for this kind of visibility, Harley Davidson only provided bikes for the shoot. The common influencer marketing playbook however involves investments in celebrities, influencers and agencies. Brand mentions, coupons, give-aways are common examples of such content.
What are the success factors of influencer marketing?
Over the years, the number of followers of an influencer has stopped becoming a key criteria. Instead, authenticity, relevance, expertise in a domain, ability to engage and create a rapport with fan communities have become key factors for selection. Defining a clear objective (reach, conversion) prior to the campaign is also important. Nano, micro, macro influencers (based largely on follower count) and big-time celebrities have been signed on by brands. The most common method of payment is per-post basis and could go up to hundreds of thousands of dollars per post depending on the reach of the celebrity. However, the thumb rule is that higher the follower count, lower the engagement.
In an effort to create awareness about the importance of sleep, Duroflex used Milind Soman as an influencer to create intrigue about the ‘7 Hour Marathon’.
Engagement – referring to interaction of some kind (like, share, comment) is often the common metric to measure success. Reach is also a vanity metric in the practice. 8-10% engagement rate is considered good.
According to a media report, Revolve, a fashion brand said its army of 3,500-plus influencers drove nearly 70% of all sales for the company.
Data suggests that Instagram will also attract a lot more marketing spend in 2019.
What are the pitfalls of influencer marketing?
Arianna Renee, an Instagram star with 2.6mn followers could not sell 36 t-shirts of her own clothing line. While it could bedue to other factors it suggests that a high follower count does not automatically guarantee results. Consumers are also questioning the authenticity of such posts as some could promote products they don’t use. Platforms like Instagram mandate sponsored posts be tagged as such and hence users know that this is paid advertising. Fake follower counts, click farms, cheating users with look-alikes are other malpractices. Tracking and attributing the effectiveness of influencer marketing is also difficult. With Instagram hiding like counts (currently testing in the US) it poses a challenge of another kind for marketers.