Is influencer marketing the next bonanza or the next big media scandal?
B2C and B2B marketers are borrowing equity and leveraging the persuasive power of people who are considered to be cool, experts, trendsetters or opinion leaders and who have substantial social media followings. B2C marketers will spend $570 million this year on Instagram, the leading influencer platform, according to eMarketer.
Brian Solis at Altimeter found that more than half of the marketers he surveyed intend to spend more on influencers next year. In a survey by Linqia, an influencer agency, 89 percent of respondents were using influencer marketing to create “authentic” content that aims to engage customers before presenting the product or service offering.
The desire to efficiently multiply reach, frequency and persuasion in social networks is the starting point. But an influencer strategy can finesse pay gates, experiment with new approaches, sidestep ad blockers, and associate a brand with personalities that resonate with customer and prospect audiences.
Celebrities, YouTube stars, hotshot bloggers and subject matter experts offer the promise of added reach and an implied or explicit endorsement, even though most of them bridle at being told what to say or how to say it. Pharmaceutical companies have been employing key opinion leaders (KOLs), a fancy name for influencers, as the foundation of professional marketing for decades.
In employing these tactics, marketers are struggling with four critical elements of influencer marketing: creative approaches, selecting the right influencer, paying the right price and measuring the results. Consideration of these elements begins with setting objectives. In the Linqia survey, 77 percent of marketers used influences to drive engagement, 56 percent used them to drive web or social site traffic and 34 percent expected influencers to drive sales.
In creating content, especially videos, brands have to choose between a full-on shill approach and the soft sell. Most aim to offset the traditional advertising approach by aligning with the persona of the influencer. Lance Rios says that the influencer has to hit certain passion points to be effective. Being funny, relatable and emotional are his key ingredients for making audiences feel positive about a brand. Warm and fuzzy or hard-sell, influencers must disclose the paid relationship to satisfy the FTC, which dinged 90 brands last year for less-than-full disclosure.
My former colleague, Holly Pavlika of Collective Bias, argues that there are five criteria for selecting the right influencer. The market niche and voice of the influencer has to align with the brand’s overall image and message. The influencer has to be considered an expert and have experience at influencing. The influencer must be part of the target audience. It helps if they’ve performed well in the past. And the brand should know ahead of time, what success looks like and how its measured.
Amisha Gandhi of SAP, my former employer, says that influencers in the B2B space offer inspirational, aspirational and valid points of view.” She understands the role of influencer marketing as building a personal connection between a brand and its prospects and offering up something other than the company line.
Finding and compensating the right influencer can be a challenge. Not everyone can be or can afford a Kardashian, though the gross number of followers seems to be the baseline for assessing influence and setting prices. There are two cost factors; talent fees to hire an influencer and media fees for placing and promoting content on Facebook, Instagram, Snapchat, Twitter or others.
According to Linqia, the average campaign enrolls 10-25 influencers, a third of whom are paid $25,000 to $50,000, and a quarter of whom can earn as much as $500,000. The most popular forms of payment are cost per engagement (clicks, shares or retweets) or cost-per-click (landing page or site visits) though the biggest stars command a guaranteed flat fee.
The biggest unknown in influencer marketing is the pay-off – the ROI. Seven of ten marketers told Linqia that they can’t figure out ROI. Eighty-one percent measured engagement. Sixty-one percent measured reach. Sixty-two percent counted traffic. Fifty-three percent used conversions and 34 percent measured sales. More than 70 percent weren’t sure if they got value or impact for money.
So the underlying question is: how genuinely influential are influencers?
There is no standard definition of influence and no generally accepted benchmarks to calibrate the influence of influencers. Maybe its because influence is nuanced and fungible. In general, influence is a by-product of a trusted relationship. Influence can be fleeting, categorical or contingent. In many cases, influence happens in context -- and in the moment -- and can wax or wane over time. External factors can heighten or lessen influence without warning. These factors can distinguish temporarily employed influencers from brand spokespersons or paid brand advocates.
Influencers are seeing significant paydays while influence remains an elusive concept that’s difficult to measure accurately. Big data, artificial intelligence and the increasing sophistication of tracking tools represent our best shot at measuring the value of influencers. In the interim, approach influencer marketing with a healthy skepticism. It could either be bogus or a bonanza.
Danny Flamberg, EVP Managing Director of Digital Strategy and CRM at Publicis based in New York, has been building brands and building businesses for more than 30 years.Prior to joining Publicis, he led a successful global consulting group called Booster Rocket, as Managing Partner. Before becoming a consultant, he was Vice President of Global Marketing at SAP, SVP and Managing Director at Digitas in New York and Europe and President of Relationship Marketing at Amiratti Puris Lintas and Lowe Worldwide.