Is Influencer Marketing Worth the Brand Investment?Subscribe to Insights
From sponsored posts to ads, influencer marketing has recently been the focus of social media strategy among many brands and agencies. When executed correctly, an influencer marketing campaign can be a very worthwhile investment for brands, yielding an increase in followers, engagement, and even product sales. But how does one execute a campaign successfully? What makes an influencer a good partner? Is influencer marketing a viable long-term strategy? With interest and searches for influencer marketing on the rise, it’s important that marketers understand the data, history, and unique economy upon which the strategy is built.
What is Influencer Marketing?
Although operating with a trendy new name, at its core, influencer marketing is a concept that has been used by brands for decades in the form of celebrity endorsements. In short, a brand capitalizes on the star-power of a celebrity by paying them for simple association; this association can range from using their likeness on packaging, to full-on marketing campaigns and commercials. Although most consumers understand that the celebrity may not actually use the product or service that they are representing, this “borrowed interest” from the celebrity acts as a defacto seal-of-approval. This, combined with the extra reach the celebrity provides, makes such endorsements a worthwhile investment for brands.
The rise of social media platforms in the past two-decades has given industry footing to a unique breed of micro-celebrities, or influencers. Where a ‘regular celebrity’ may be known for roles in movies, artistry, or general socialite status, an influencer is largely known for their online persona – their fame lives with their digital content on blogs and various social media profiles. Influencer Marketing is a newer form of traditional celebrity endorsement in which brands contract these influencers for their content creation skills, audience, and of course, influence.
What is the Creator Economy?
Before developing influencer marketing strategy, you must first have a general understanding of how money moves in the contemporary creator economy. Millions of content creators across the globe have found innovative ways to monetize their unique skills and personable personalities. Some of this monetization is done directly through social platforms, such as YouTube and TikTok; on YouTube, creators can earn revenue by allowing advertisements to be shown before, during, and after their videos. On TikTok, creators can earn revenue for every view that their content receives. (Both media platforms have strict eligibility requirements for monetization.) Many creators have also found success by selling merch (branded sweatshirts, t-shirts, and caps) to their audiences, while others have found success offering access to exclusive content in exchange for a monthly fee.
Although there are other niche tactics of monetization, brand deals, what we on this side refer to as Influencer Marketing, are the most sought after of all agreements by influencers. This is largely because the opportunity to be associated with a prominent company is an alluring marker of status, will provide for a more robust portfolio of past work, and because the influencer has bargaining power as they are the commodity.
As you begin to understand the way money moves in the creator economy, it’s essential to note the importance of influencer marketing to both brands and influencers. Both sides of the deal should walk away feeling like winners when an activation is complete, because both sides should receive their expected return. The return for influencers is usually limited to money and the claim-to-fame of working with a brand. The return for brands may vary but usually relates to an increase in engagement, an increase in followers on social media, or an increase in product sales.
How should brands and agencies navigate the Influencer Marketplace?
Before contracting influencers, a brand needs to create a clear set of internal goals and expectations for the activation. This is important because it helps to inform the decision of which influencers to bring onto the project while also aiding in measuring success at the completion of the activation.
Ex: Bright N’ Fun is a mid-sized producer of colorful makeup products which typically markets to teenaged girls. The Marketing Director noticed that competitors were launching influencer collaborations, so they gave their Social Media Manager an influencer marketing budget of $10,000 for Q2. The Marketing Director expected this investment to yield an increase in sales while the Social Media Manager thought that the ask was simply to source new influencer content that would spice up their social feed and match competitors. Because of this, they contracted five amateur modeling influencers; although the content they produced performed well on socials, Bright N’ Fun did not see an increase in sales because the audiences of the influencers were ultimately interested in artful photography as opposed to makeup recommendations.
While bringing in makeup influencers instead of modeling influencers would not have guaranteed a monetary return, it would have increased the likelihood of one while also inspiring internal confidence for future activations. The above example is a bit extreme and ignores audience overlap, but it draws attention to the importance of uniform goal setting and choosing the right influencers. Choosing the right influencer can sometimes be tricky if a brand doesn’t know what to look for. In addition to influencer niche, brands should weigh the following of an influencer: audience demographics, engagement, content style, and rate.
An influencer with a larger following isn’t always right for the job; an audience of one million followers may be less engaged than an audience of one-hundred thousand. Simply scrolling through an influencer’s feed and comparing likes-comments-followers can aid in determining how engaged followers are. Additionally, it’s always a great idea to request that the influencer send their audience insights. Although dependent on the platform, audience insights generally contain specific demographic information and analytics on past post performance. Followership, demographics, and engagement work hand in hand to determine whether an influencer would make a good partner. Sound influencer strategy is informed by data and projections more so than aesthetics and feelings.
Aesthetics and content style are still very important factors to consider when sourcing influencers, though. To put it plainly, some creators are more experienced than others when it comes to photography, graphic design, videography, and editing. Some have captivated their audience with simple relatable content while others focus on creating content that requires more intentionality and time; this extra work does not always come at an extra price. The creator economy allows for influencers to help determine what their content creation skills and audience are worth – there is not a global rate on which brands and influencers trade. This is great for both parties because it means that terms can vary from deal to deal. Savvy managers can leverage their bargaining skills to balance rates with audience size, number of deliverables, exclusivity, and more.
What is the future of Influencer Marketing?
As social media continues to make the world smaller, influencers will continue to help brands build bridges. Even as new platforms and strategies arise, we predict that brands who understand the tenets of sound influencer strategy will continue to have the competitive edge – while those who don’t will find their content lacking. A strategic agency partner can aid in creating data-driven influencer strategy that produces results time and time again. With the growing popularity of influencer agencies, groups that represent and support a roster of influencers, it’s important that brands have experts in their corner who will fight to get them the best deal possible.Subscribe to Insights