I recently read a post on Adweek about why Influencer Marketing is the next big thing. Some of the points the author Misha Talavera (co-founder of the startup Neoreach, an Influencer Marketing service for brands) made, were the following:
1. It’s Powerful: Influencer marketing presents a glaring opportunity for brands to leverage the power of word-of-mouth at scale through personalities that consumers already follow and admire.
2. It’s Social: People expect brands to talk with them rather than at them. They no longer expect brands to sell to them, but to entertain and inform them. In this new paradigm, influencers are a force to be reckoned with.
3. It’s Sexy: When 50 influencers posted an Instagram picture of themselves wearing the same Lord & Taylor dress, on the same day, they told the Instagram fashion niche that the dress was a must-have article to be in the in-crowd. The dress sold out the following weekend.
Working with influencers and tastemakers will communicate to the market that your brand may very well be the next big thing. In addition, you can repurpose the content they create to impress your existing customers.
4. It’s An Arbitrage: There is a massive supply of influencers, but few marketers running influencer campaigns, meaning that the cost of buying an influencer promotion is below its real value (as measured by your ROI).
5. Consumers Are Tired Of Paid Ads: With all of the advertising interrupting them, it’s no surprise that people love products like AdBlock, Netflix, and Spotify Premium that take ads out of traditionally ad-saturated media experiences.
6. It Helps Your SEO: On top of building your brand and improving your sales numbers, influencer marketing also helps your search engine ranking.
I've worked with influencers at two startups, Chuisy and Freeletics, over the last few years. We found that this new form of online marketing indeed still is an arbitrage. Especially younger influencers often are not aware of the value of their massive audience and charge low prices for the reach they provide. However, we also experienced some significant limitations that have to be considered.
If you have several influencers posting for you (e.g. if an agency sells you a package and just adds up their audiences to charge more), the actual reach is hard to estimate. Most social media users follow a long list of similar influencer accounts why you have a significant overlap in the audiences. Have people seeing your content several times isn't generally a problem, but tracking KPIs like reach or CPM is a challenge.
Tracking also is a challenge if you are on platforms where links cannot be placed yet, like Instagram or Snapchat. That's why some companies consider influencer campaigns rather as a measure for awareness and accept not knowing about CTR or similar KPIs.
Furthermore, we where sometimes surprised how imprecise information about the audience of influencers where. Targeting audiences of a certain age or location is then extremely difficult if you are working on platform with no precise targeting tools.
One last aspect, which is more a qualitative one: We found that influencer marketing often lacks authenticity if product endorsement/placement doesn't happen in the context of a long term relationship between influencer and brand. Influencers who constantly post new products (especially if it's about subscription services or other items for long-term consumption) cannot authentically demonstrate brand loyalty. You want your product mentioned over a longer period and among a limited set of products, an influencer is recommending.
I think it generally helps to understand that influencer marketing is not just about the added total number of followers reached. A more appropriate formula is: Influence = Audience Reach (# of followers) x Brand Affinity (expertise and credibility) x Strength of Relationship with Followers. To be fair, most of these limitations are being worked on and companies like Neoreach contribute greatly to the innovation process.
BDMI Graph On Influencers
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