Today, influencer marketing on Instagram alone is nearly a $2 billion industry. By 2020, it’s set to reach $10 billion. And while the channel’s explosive growth owes much to the parallel rise of mobile, its widespread adoption signals influencer marketing is more than just a fad. For digital advertisers, it’s time to jump on the proverbial bandwagon or risk being left behind.
This post will help you do just that by laying out the basics of influencer marketing: who influencers are, what industry trends to watch, and how to measure the ROI of influencer marketing campaigns.
Who: Types of influencers
No longer relegated to Hollywood starlets or fashion bloggers, these days influencers come in all forms, from niche Instagrammers to everyday consumers. Here are the main types to consider for an influencer marketing campaign:
The main benefit of celebrity influencers is reach — they can connect to millions of followers with just one post. For example, celebrities like the Kardashians promote a range of fashion, health, and beauty products to their 270 million followers, and brands pay up to $500,000 per Instagram post to access that audience. Many of the products the Kardashians endorse sell out immediately, so it’s not surprising brands see some celebrity partnerships as a guaranteed return on investment.
The obvious downside of celebrity influencers is cost. However, there’s also a potential downside in that many consumers think (or assume) these influencers may be promoting a specific product merely for the financial incentive, not as a genuine testimonial. This is why it’s essential to find a product-lifestyle fit when working with this influencer group. (You wouldn’t partner with Kim Kardashian to sell fishing tackle, would you?) Don’t try to force a partnership when it’s not a natural fit: many celebrity influencers will refuse to work with you, and if they don’t, you could end up harming your brand and your budget.
Micro-influencers represent a rising trend in influencer marketing. Typically featuring under 100,000 followers (but sometimes up to 250,000), micro-influencers are popular social media stars in their respective industries, but not widely recognized outside of them. According to Cision, this is the influencer of choice for marketers in the United States.
Micro-influencers are less expensive than celebrity influencers: typical costs are around $250 for Instagram posts and $500 sponsored blog posts. Yet they can be just as popular with followers, have as much influence on buying decisions, and be better at activating audiences. As one example, makeup brand Glossier chooses influencers to work with based on audience engagement instead of total follower count.
That’s right: in addition to micro-influencers, nano-influencers are now on the rise. Nano-influencers are everyday social media users who usually have between 1,000 and 5,000 followers, and are willing to act as brand ambassadors to their network of family and friends. Marketers are now courting these influencers because they are easy to work with, promote a range of products, and will do so for free products or coupons in return.
Bloggers are often considered the original influencers. Globally, 40% of marketers rely on bloggers to spread the word about their brands. With such a diverse group, think outside of the box to get the most out of blogger marketing partnerships; instead of just writing product reviews, bloggers can also host PR events, post on social media, coordinate giveaways, and get the word out in other creative ways.
Globally, 59% of marketers ranked everyday consumers as being the most effective kind of influencers. So, make it easy for anyone to become a brand advocate. Remind customers to review your products after purchase, and encourage them to share across social media. Make this process as effortless as possible by surfacing sharing options immediately after purchase, or emailing a link to Yelp, social media, or your site soon after. You may also want to consider creating promo codes for special discounts or free products to incentivize consumers to share your brand with their friend and family networks.
What: Influencer trends to watch
As social media and technology evolve, so must influencer marketing. Here are a few of the trends we’re seeing in influencer marketing:
1. The growth of video
Video is twice as effective in driving sales as text-based ads across social media. One big reason is video offers more creative freedom and depth than image-based, text-heavy formats. Take the award-winning campaign Nick Offerman did for Lagavulin below. In any other format, the execution and idea would fall flat; with video, it was a viral success.
2. Competition for real-time stories
Instagram launched Stories in 2016 to compete with Snapchat’s characteristic real-time snippets into the daily lives of its users and influencers. Facebook soon followed with its own version of Stories. Most recently, Facebook launched Watch, which allows users to see what’s trending from popular television shows, celebrities, and influencers.
3. Increased scrutiny of disclosures
In 2017, the Federal Trade Commission sent letters to more than 90 celebrities, influencers, and brands to remind them of official endorsement and disclosure regulations — and warn against continued violations. The agency had held large brands accountable for improper disclosure before then, but 2017 was the first year the FTC filed a complaint against individual influencers for failing to disclose sponsored content. Instagram has also started more to encourage influencers to comply with its new “Paid partnership with” tag, which rolled out in June 2017.
4. Heightened privacy measures
Social media brands have been under pressure to update their data sharing and collection practices following the enforcement of GDPR, the Cambridge Analyticascandal, and several data debacles by Facebook. As a result, some influencer sites and services that rely on access to that data have been struggling to adapt.
How: Measuring influencer ROI
Far from a budget black hole, today’s influencer campaigns are just another part of a solid marketing strategy, with results that can be optimized to deliver maximum ROI. In general, the goal of your campaign will determine the metrics you use to measure return on investment. To determine the KPIs you should use, set a goal for your campaign and work backwards from there.
Here are a few we recommend considering:
Cost-per-engagement can be measured in terms of dollars spent per post like, comment, view, or other social interaction (repins on Pinterest, retweets on Twitter, shares on Facebook, et cetera). Consider giving influencers a unique hashtag to track how many people join the conversation and help spread the word.
If your main objective is selling products, ensure you have tracking in place to identify exactly how much revenue each of your influencer campaigns earns. To make this process effortless, use an affiliate tracking platform to share links with your partners and track online sales back to individual influencers. If you want to extend your measurement beyond the standard attribution windows, consider giving influencers promo codes that consumers can redeem any time.
If your main goal is visibility, consider focusing on a metric like impressions. You’ll need to use an and pixel-based or postback tracking to accurately measure how many views your influencers are driving, especially if the campaign spans mobile and web. To dig deeper, stream your data into a BI tool, or ask your influencer partner to share the Google Analytics data behind the impressions to get a feel for location, age range, gender, device, and more.
For more ideas on which metrics to track and how best to track them, check out the diagram in this article, or email us at [email protected].
With the right influencers and strategic goals, influencer marketing can become a lucrative channel in your marketing mix — or you’re most lucrative. To learn more about influencer marketing, read up on some common influencer marketing FAQs, or watch this webinar on how ad networks and performance marketers can find influencer marketing success.