The use of key opinion leaders (KOLs), or influencers, is a
leading way for companies in China to advertise their goods. KOL endorsement is now the primary driver
outside of Baidu search, and sales and brand awareness for companies such as Bulgari,
Burberry, and Jaeger-LeCoultre have increased due to their KOL strategy. Due to the high effectiveness, KOLs command
high fees and perks (i.e., $731K for a 30 second video promoting Jaeger
LeCoultre, wedding sponsored by De Beers, birthday party thrown by Michael
Kors, etc.). The KOL economy was
estimated at $9 billion by CBNData in 2015 which is equivalent to more than gross
box-office receipts in 2015. Consultancy
Analysis projects revenues will reach approximately $15 billion next year.
The KOLs mentioned in the article have over 80 million
followers each and it makes sense that they expect such high fees. I assume these companies can track what is
attributable to the KOL strategy and that the total new sales exceed the costs. With millions of followers, even just acquiring
a small portion would justify the KOL fees.
https://www.ft.com/content/2de5b336-4a89-11e7-a3f4-c742b9791d43
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