Influencer marketing is the talk of the town right now.
Everyone from the scrappiest startups to the biggest household name brands are investing in it. But if you want to get into it, how do you do it right?
And to take a step back, what is influencer marketing in the first place?
What Is Influencer Marketing?
At its core, influencer marketing is the development and delivery of promotional messages through influencers instead of the brand itself.
Now, it’s not a new practice to deliver messages via a trusted public figure. But in the past, it’s been done pretty transparently through advertising in the form of a spokesman. This plays well to the authority and likability principles, but it’s still obvious that it’s paid and probably inauthentic. The closest resemblance to today’s online influencer advertising is product placement in popular TV shows and movies:
There have been dozens of studies showing millennials don’t trust traditional advertising. It’s not just millennials, though we do seem to be the most difficult to reach by traditional means. There’s tons of evidence that most demographics are distrustful of advertising messages. It boils down to this: we want brands to be more authentic.
It’s not just print and TV ads that suffer from these trends. Traditional means of online advertising can sometimes fall short as well. That’s not to say that all advertising is ineffective (of course it’s not), but banner blindness and a wave of consumer distrust along with increased competitive ad spending has caused the effectiveness of traditional campaigns to waver.
Tactics change, though. That’s a fact of marketing. What works now may not work in ten years, either. But over the past decade a rather seismic shift has occurred. Social media has risen like a phoenix from these ashes and represents a unique opportunity for smart marketers to reach customers in different ways.
As social media use has become ubiquitous, influencers and celebrities have come to prominence on each new social network.
So with the loss of trust in advertising and the rise of social media influencers comes what we know as influencer marketing today. Less transparent motives, but more authentic appearances.
A Short Primer on Becoming an Influencer
I’m not an influencer (but you can send me products if you want me to promote them on my Instagram). This article is about how to build influencer marketing campaigns, not how to become an influencer, but I thought it would be illuminating to share this video by Bloomberg on a journalist’s attempt to become an Instagram influencer:
Apparently it’s pretty hard work. In addition, once you get the follower numbers deemed worthy for payment, you still need to maintain your audience’s trust.
Influencer Marketing is Effective
A 2015 study found companies make $6.50 for every $1 spent on influencer marketing. Not a bad ROI.
While sometimes homophily can be a confounding variable with social diffusion (birds of a feather flock together), in general, influencer marketing is stickier than traditional advertising. On a common sense level, that’s obvious; why wouldn’t you be more influenced by a voice you trust than by a banner ad?
There’s quantitative support for the effectiveness of influencer campaigns, too. Convince and Convert published their findings from a study conducted with TapInfluence. Turns out the ROI was much higher than display ads – 11x more ROI actually:
Even anecdotally, think about how you buy products. Of course word-of-mouth from your friends matters, but I’d wager there are some trusted influencers that you follow as well. I know that, for example, I’ll buy pretty much anything Tim Ferriss recommends.
How do you know if influencer marketing is right for you? Treat it like any other acquisition growth experiment. Test the waters on a short-term basis, measure, analyze, and then decide. Mike Filbey, co-founder of ButcherBox, discovered influencer marketing as an effective channel through that strategy:
How Does the Influencer Marketing Relationship Work?
There are three types of influencers: Celebrity Influencers, Macro Influencers, and Micro Influencers.
Celebrity influencers are the athletes, musicians, and actors that you’re used to seeing hawking products. They have 1M+ followers and drive 2% - 5% engagement per post. In general, they have the biggest reach but usually the lowest engagement, and also because of their broad appeal, it’s not as targeted to your specific audience. Celebrity influencers are kind of like buying a TV ad on a major network.
Macro influencers are bloggers, social media personalities, journalists, and thought leaders with 10,000–1M followers, and they drive 5% -25% engagement per post. According to Mavrck, they “have the highest topical relevance on the spectrum, with category-specific influence – such as lifestyle, fashion or business.”
Micro influencers are niche influencers with 500–10,000 followers, but they drive high engagement with 25% — 50% engagement per post.
Don’t discount micro celebrities or think you just have to go for those with more reach. It’s about trust and traction. Research is even showing that teenagers today trust YouTube stars more than celebrities. It’s all about which demographic you’d like to reach and the sway an influencer has over them.
As Tim Ferriss put it, “On a 1-10 scale, 10 being the most trafficked, three or four 7 bloggers featuring you is far better — and easier/faster to achieve — than you obsessing over landing one 10 blogger.”
And as with anything in marketing, the more narrow you can target your audience, the cheaper it tends to be. So micro-influencers, if super relevant to your audience, could be your best bet when it comes to cheap acquisition.
Rules of Engagement with Influencers
Assuming there is strong ROI in influencer marketing and that it can work for your business, how do you go about finding, recruiting, and managing influencers? I talked to a few people on each side of the equation, influencers as well as marketers using influencer marketing. There are some pretty definitive rules of engagement.
Know Your Industry and the Players in It
There are platforms that promise the ability to find and choose influencers, but word on the street is that they aren’t super effective. The better solution is to know your market very well, know which voices are most trusted and which audiences are the largest, and then seek out influencers personally.
As Mike Filbey put it:
Just like with any paid advertising (or marketing in general), there will be a flair of experimentation here. You may have to try many different influencers in your space and measure the specific ROI of each channel. Then double down on the effective ones and cut those without clear ROI or tweak the messaging.
It would be easy if a platform could simply deliver great influencer relationships with strong ROI, but the world doesn’t work that way yet.
Pay Influencers Well
When you find an influencer that is bringing strong results, don’t shirk your responsibility to pay them their worth. It strengthens the relationship and it makes the arrangement worth it to them, and it also makes you stand out as a brand.
I’ll reiterate: influencer marketing is hot right now. Good, influential people have lots of brands competing for their attention. As Mike Filbey put it:
Find a Way to Stand Out
Paying influencers well is part of standing out. But you may have to fight for the initial attention, too, especially if you’re targeting a coveted influencer. Marc Ecko says you should “never expect your intended audience to see [your product].” Here’s how he put it:
And for that reason, Mark Ecko advises against simply sending “just the stock shit.” This is good general marketing advice, as you don’t want a generic brand voice or meaningless/emotionless copy. But in this specific context where you’re fighting for the attention of just one person, you really need to “wow” them:
(Though he’s quick to note that you shouldn’t send a handwritten note. “This is a professionally produced, hyper-customized presentation,” he says.)
Don’t be a Weirdo
It goes without saying, but when people try to reach particularly big names, they get weird. Marc Ecko has a series of rules on that theme: Never send a picture of yourself fan-boying out, never gush, never stalk, never send directly to someone’s house.
The people that fall into this trap are probably well-meaning and think that they’ll have an easier time breaking through the noise, but that’s not really the case. As Marc Ecko put it, if you’re not getting through, it’s the message, not where you’re pitching:
The Cost of Influencer Marketing and How to Measure ROI
We’ve already discussed the efficacy of influencer marketing. However, almost any advertising channel will move the needle if you throw enough money and time into it. The real question is, what is the cost of influencer marketing and what is the ROI?
One of the most impactful activities of a data-driven growth marketer is experimenting across channels, and a big part of that is exploring new channels to find that coveted blue ocean channel before anyone else does. Is influencer marketing still a wave worth riding or have the marketing vultures circled in and raised the costs?
You’re a data-driven marketer, so you probably already know that measuring influence is difficult. However, the past few years have given us some powerful tracking and optimization platforms, even for influencer marketing.
As Mavrck outlined, there are 5 metrics used to track the ROI of influencer marketing:
- Cost per Impression
- Cost per Engagement
- Click Through Rate
- Cost per Lead
- Cost per Acquisition
The first 3 are micro-metrics at best, and the 4th doesn’t tell the whole story. But on the 5th metric, Cost per Acquisition, we can see that industry-wide, influencer marketing does really well compared to other channels. In addition, micro-influencers have the best bang for your buck:
And how do you track your own campaigns? There are platforms for measurement and influencer management. Mike Filbey says ButcherBox is using a service called Lead Dyno, but they’re switching to HasOffers “because Lead Dyno lacks some functionality that influencers want (as well as tracking info and stats that we need).”
But otherwise, tracking influencer campaigns is pretty similar to other marketing campaigns, though without the level of granularity involved in native campaigns. You use proper tagging, unique coupons if applicable, and if you want more depth to your analysis, you can use attribution models that go beyond last-click.
If you only do last click attribution, you could be missing out on a big part of the awareness stage. For instance, if an influencer is bringing you a bunch of new visitors who hadn’t heard of you before, but it takes them a few touch points to convert (email, organic, etc.), then it’s likely that your ROI is higher than Google Analytics is telling you out-of-the-box.
How to Find the Right Influencers
Other than ROI and measurement, the other piece of influencer marketing where you can bring data to the table is choosing your influencers in the first place. How do you know which ones will be winners and which will be duds?
As I previously mentioned, there’s a level of gut feel here. If you know your industry, you likely know which voices are the most trusted as well as who has the best reach. There’s something semi-intangible about that level of trust. You just kind of know who is revered in the space.
Then there’s also a level of exploration and exploitation. You’ll probably need to explore many influencers before discovering that a few are producing much better results, and then double down on those.
But there are some tools I like for finding influencers in my market. Some out of box, and some research-based.
Use Software Solutions
There are tons of platforms now that let you find and manage influencers in one place. Here are a few:
Then there are plenty of platforms that measure social influence, where you can sift and sort by content, topics, social networks, etc. Here are some of my favorites:
Conduct Customer Research
A better way to find influencersw (in my opinion): know your audience and what they consume.
We wrote about conducting fast and rigorous user persona research. A large part of this was defining clear attitudinal and behavioral segments, but just as important was when we asked the open-ended question, “what publications do you consume?”
Not only did we find new content sources for potential partnerships, but we were able to spot trends across personas and see which sources were the most trusted and consumed.
While our persona research was quite rigorous, you could just as easily do this with a quick customer survey (which you should be conducting for CRO research anyway). Additionally, you can get some good qualitative data from simply interviewing your customers.
Summary: put an ear to the ground and figure out what influencers and blogs your target audience is consuming and trusts. Work with them outside of an influencer marketing platform.
If you’re a nerd you can also use data science to score social media influencers and identify top influencers already talking about your brand. Cool video on the topic here.
How Brands Are Doing Influencer Marketing Right
Whether you’re B2B or B2C, a YC-backed startup or a local business, there’s a chance influencer marketing could be a profitable channel for you. Here are a few examples from a diversity of companies.
Lord & Taylor
The most obvious case for influencer marketing is with B2C retailers. Because there is generally a larger reach in B2c, the price point is usually lower, and influencers propagate social media networks and fill their feeds with style and product choices, it’s an obvious choice for consumer brands.
Lord & Taylor had a big win with influencer marketing when they got 50 Instagrammers to wear the same dress, after which the dress promptly sold out.
The Instagram influencers were hand-selected and compensated by the brand, with each selected based on her aesthetic and reach.
While influencer marketing appears to be more common in B2C, this exampleth shows it can work in enterprise B2B companies as well.
What they did is work with influencers from various industries to create video content for their 2016 Sapphire conference. According to Kapost, “they engaged virtual audiences with live video content on their Facebook page. The videos featured interviews with influencers, who shared their knowledge and expertise on relevant topics.”
The event’s content reached more than 80,000 people.
Scentbird credits influencer marketing as the driving force for growing to $700k+ MRR. They’re a Y Combinator-backed startup that sells perfume subscriptions.
Not only do they credit influencer marketing with their ability to scale to the point they’re at today, but they also believe influencer marketing was a big reason they got into Y Combinator. They were scrappy and the partners were impressed that their CPA was essentially $0.
Of course, scaling from $75k to $700k MRR required them to start paying for customers, and they also started using influencer platforms like Revfluence and FameBit. Essentially, they just doubled down on and scaled the strategy that helped them get traction in the first place.
Influencer marketing is a hot topic today, a “breakout” term according to Google Trends. It’s no silver bullet, but given the right industry and business context, it can work wonders for acquisition.
Especially if you’re strategic and discerning in your engagement with influencers, you can acquire high value customers cheaply and use influencer channels over and over without much tactic fatigue.
There are best practices for influencers marketing (outlined) above, and there’s the ever prevalent element of experimentation that is still applicable here. It’s not as simple as A/B testing on a landing page, but you still need to experiment with the efficacy of the channel as well as with individual influencers and messages.
The post The Data-Driven Marketer’s Guide to Influencer Marketing appeared first on CXL.
Source: Conversion XL