What: In a recent study, more than half of all marketers surveyed reported investing in Influencer Marketing in 2016, and more than one in five estimated their corporate-wide Influencer Marketing budgets to be in excess of $1 million.
Why It Matters: While brands are certainly excited about Influencer Marketing, they are still learning how to identify the right creators and engage target audiences through this new and unexplored medium. We spoke to two experts on Influencer Marketing from Fanatics Media and the Branded Entertainment Network (BEN) Group to find out what it takes to hit the mark.
“Influencers.” Brand marketers may not fully understand them yet, but they definitely cannot ignore them. Influencers are content creators that use platforms like Instagram, Facebook, Pinterest and Twitter to build audiences through showing off their unique talents, sharing thoughts on virtually any topic, and teaching others how to do pretty much anything. Their audiences are not only enormous but also engaged and passionate about sharing. It’s a goldmine for brands looking to connect with young or niche consumers, but implementing an effective Influencer Marketing strategy requires a deep understanding of a very new digital landscape.
In the State of the Creator Economy report from online marketplace IZEAx, more than half of the marketers surveyed reported investing in Influencer Marketing in 2016. 69 percent of those who indicated that they are currently conducting Influencer Marketing campaigns have dedicated a stand-alone budget to them, and from 2014 to 2016, those budgets have increased steadily, now reaching $700k+. More than one in five of those surveyed estimated their corporate-wide Influencer Marketing budgets to be in excess of $1 million.
Research also shows that when Influencer Marketing is done right, it can be very effective: Collective Bias, Inc.’s study, The Power of Influence: A Window into ROI, looked at 11 Influencer campaigns from five CPG categories. While Influencer content significantly outperformed control groups, the study found a wide variance in performance, “driven largely by the advertiser category, seasonality, price point, purchase frequency, and budget size.”
For example, in the case of a major confection brand’s Influencer Marketing campaign, the study concluded that the campaign saw a 7.6x return on ad spend by weighing households exposed to the campaign’s Influencer content when compared to an unexposed control group. A national rice brand and frozen food brand found that its Influencer content generated a 45 percent redemption rate, tripling their benchmark of 15 percent and surpassing the industry digital coupon redemption rate of 8 percent. The study also found that of the group exposed to Influencer content, 48 percent visited the retailer within four days vs. only 29 percent in the identical but unexposed control. These figures beg the question: what separates the high-performing campaigns from those that fall flat?
What Makes a Successful Influencer Marketing Campaign?
What does “doing it right” look like?
The complexity of implementing and executing a successful Influencer Marketing campaign has led to the emergence of agencies that specialize in putting together and optimizing these campaigns for brands. From choosing the right Influencer to producing something that engages the right consumers and fits naturally into the creator’s content, a variety of variables determine the shape and performance of an Influencer Marketing campaign.
Meredith Jacobson, the Head of Digital Partnerships at BEN Group, said, “Depending on the campaign, some clients are more interested in raising awareness around their product or brand, while others are aggressively trying to drive downloads and/or trial and purchase.” A number of factors are typically factored into brands’ decisions when choosing the “right” Influencer for their campaigns: “The number of subscribers, viewership, engagement, vertical, and whether they believe that an Influencer aligns with the brand’s values” are all important, according to Jacobson.
Mark Fidelman, the managing director of Fanatics Media, explained that “smart agencies come to Influencer agencies to optimize.” When a brand or agency turns to an Influencer Marketing agency like Fanatics, they know that they are seeking brand awareness and to generate leads or sales for specific products. But the vast and continuously-evolving worlds of content creation and online video are overwhelming and foreign to them. They lack expertise and appreciation for the detailed work that goes into content creation and do not know enough to “integrate a product and service into video and still keep the Influencer’s MO consistent with what their followers expect from them,” Fidelman asserted.
To Determine the ‘Right Fit,’ Look Beyond Followers and Views
At the end of the day, “anyone can hire an Influencer for 100k,” Fidelman said, “but there are many steps that require optimization in order to make sure that leads and sales follow.” For example, brands often focus heavily on the number of views that a video receives, or feel that with one big win, they’ve done enough. “A lot of brands think that if they get a million views once, they have succeeded, but those views are not necessarily generating sales,” Fidelman added.
A lot of brands think that if they get a million views once, they have succeeded, but those views are not necessarily generating sales.
Fidelman explained that at Fanatics, his team makes sure to dig deeper, “so that when somebody clicks on links in the description of the video itself, this is being tracked through pixels and cookies.” With solid analytics, they can track the path to purchase when, for example, a pixel hits a thank you page, which only happens if the customer bought something. Other factors like how long people are watching the videos can give his team valuable insight into how well the campaign is working.
To Jacobson, much of it comes down to whether or not the creator and the brand’s goals are aligned, and whether the product can be fit seamlessly into the creator’s typical content. “Ultimately, we advise clients to execute campaigns that empower creators’ content rather than disrupt it, which often results in making viewers happy,” Jacobson said. And if viewers are happy, they are more likely to continue down the intended path to make a purchase and become loyal consumers.
When selecting creators to pair with a brand’s campaign, Fidelman emphasized that the number of views or subscribers is less important than the connection and engagement they have with their fans: To form a real understanding of a content creator’s engagement levels, he looks at the number of likes, shares and comments that their videos are receiving and puts it into his own proprietary “engagement” formula to weed out creators whose numbers are misleading. Using this approach, he has found that a creator could “have two million views, but 0.5 percent engagement, while the opposite could be true for someone with just 50,000 views who will also be cheaper to work with.”
Most Common Mistake: Brands ‘Overly Controlling Over the Creative’
Jacobson of BEN agreed, stating, “Some of our best campaigns have included a hybrid mix of large and mid-size Influencers,” and that “this approach gives brands the opportunity to achieve true scale with a large amount of reach and engagement.” She also emphasized that brands need to be “clear with their objectives and talking points, and truly allow the Influencers to act as the creative directors and do something cool and unique that they know their audiences will love.” At the end of the day, the creators know their audiences, and brands should look to them for guidance about what will resonate and what will not.
“The most common mistake that brands are committing when they are overly controlling over the creative,” Jacobson continued. “Influencer content is not a commercial, so it shouldn’t feel like one.” Coming off as “inauthentic and forced” has consequences, as “audiences can immediately pick up on this, and it can cause a backlash.” When the brands listen, Jacobson says the results are huge: “Our campaigns have sold out stock of products in thousands of stores, crashed websites, and delivered over 200% ROI for some clients.”
Brands ‘Understand the Importance of this Space,’ but Are Resistant to Change
How well are brands taking the experts’ advice? Jacobson insisted that education is important, and that they are sure to thoroughly explain “what’s been done in the past, which platforms are most effective at any current moment, trends, what potential campaigns could look like, and what kind of results to expect.” But the interest is there, as “many brands understand the importance of this space, so it’s really exciting to help them find opportunities and success,” Jacobson said.
Fidelman asserted that there is resistance from brands that still cling to platforms like television even though it offers fewer windows into how well campaigns are performing. “There is hesitance because it is what they have always done, and if you are a brand marketer or an advertiser, it is a pretty big risk to move into a new thing.”
Ultimately, we advise clients to execute campaigns that empower creators’ content rather than disrupt it, which often results in making viewers happy.
With television, Fidelman explained, it is impossible to know who is actually watching a commercial even though it is aired. “Unless you have physical stores, you have to look in a demographic area to see if sales went up or not, and it is not a direct link; it’s about inference,” he said. But with Influencers, one can track performance from start to finish without the big budgets of big television campaigns. “Moreover, you have a third-party source that is essentially doing a commercial for you,” he added.
To combat that resistance, Fidelman and his team will often start small with their clients, putting together a pilot whose performance can be compared to that of the brand’s television ads. He says that 90 percent of the time, the Influencer campaigns are more effective.
Targeting Opportunities: Influencers Reach Variety of Demographics
While the Influencer industry was certainly propelled forward by young, digitally-savvy Millennials, brands with older or more diverse targets are finding Influencer Marketing to be an effective targeting tool as well. Fashion and makeup are particularly focused on Millennials and Multicultural, Fidelman said, while technology brands are targeting mostly men in the age range of 30-50. The toy industry is reaching a huge audience through kids that spend hours on their parents’ tablets clicking on videos (have you seen the videos of this woman unwrapping toys?).
But Multicultural Millennials are still some of the hottest targets. “Executing Influencer campaigns in itself is a way that brands are attracting Millennial audiences,” Jacobson said. “As far as Multicultural goes, Brands love working with a variety of Influencers to attract all audience demographics…There are thousands of creators out there, so there are plenty of opportunities to reach any audience.”
The Future Belongs to Those with Long-Term Influencer Relationships
While it is encouraging to see more brands exploring Influencer Marketing, Fidelman emphasized that creating long-term relationships with the creators themselves is key to having repeated success with campaigns. Brands should aim to “work to build relationships with Influencers, and most companies that are smart enough to do it right are only doing it right one time,” Fidelman explained. Episodic content over a sustained period of time will see greater returns on investment.
Overall, the most important factor in the success of IM campaigns might be simple: build a good product and you will be able to find someone who will promote it authentically. “We’ve learned that the best collaborations occur when the creator truly is passionate about the brand or product,” Jacobson said.