Consumers aren’t looking solely to brands for product information anymore. They’ve learned to distrust advertising and instead, they’re looking for recommendations from their networks before making purchase decisions.
In fact, Nielsen claims that 92% of consumers around the world trust earned media (recommendations from friends and family or word-of-mouth) above all other forms of advertising. There is an easy solution to this problem though: Influencer Marketing. It’s a tactic that creates brand awareness and builds credibility through content that their specific audiences want to consume.
Influencers, while removed from people’s inner circle of personal contacts, do interact with their audience daily. They show up on the audiences’ social media platforms alongside their friends and family. At this point the audience does not make much of a distinction between their acquaintances and their favorite YouTuber when they’re looking for a good recommendation.
In terms of online marketing, recommendations (or, earned media) mean everything. If PR efforts are the way to earn word-of-mouth endorsements in traditional media, Influencers are the way to get the same results online. The earned media value for brands differ by industry, but a good starting point is $5.00 per thousand impressions (about the value of one fan’s retweet on Twitter).
One 2014 study by Burst Media showed that marketers who implemented an Influencer Marketing Program received $6.58 in earned media value for every $1.00 spent. In the CPG Category specifically, marketers received $11.33 per $1.00 spent.
Also in 2014, Variety found that 6 out of 10 teens trust YouTube stars more than traditional celebrities. Influencers scored higher in engagement, relatability and were found to be more extraordinary. It’s clear that Influencers are going to inform and incite many purchases now and into the future.
Why Use Influencers?
Some brands are hesitant to include an Influencer Marketing segment into their marketing plan. They’re waiting for reliable results and industry averages before they jump in. As an expert in the field, I encourage every brand to jump in and adopt Influencer Marketing right away.
Here are the top five reasons I recommend using Influencer Marketing as soon as possible:
1. Word-of-mouth marketing generates more than twice the sales of paid advertising.
Again, people have learned to go beyond the brand’s description of their own product and look for reviews by real people. Not only will a brand’s efforts in Influencer Marketing aid in generating more than twice the sales of paid advertising, the fans gained through these consumer-to-consumer recommendations are 37% more likely to stay as brand advocates.
2. People expect brands to talk with them rather than at them.
Consumers can gather the information they want for themselves on Influencer mediums. On social media, they are looking for an entertainment element as well as confirmation that the brands they follow understand who they are and what they like.
3. Influencers can cut through the advertising clutter and talk directly to the audience.
Americans see thousands of ads a day. So many that they are actually becoming blind to them. Only 14% of people remember the last ad they saw and can identify what was being promoted. Influencers take the marketing angle out and talk to their audience like a peer or friend.
4. Influencer mentions help increase search value (SEO) for a brand’s web properties.
Simply put, the more people mention a brand (whether on social media or blogs) the more relevant it is on Google. The more relevant a brand is on Google, the more credible it will be to a consumer and thus, the more likely they’ll be to try a brand’s product or service.
5. It’s a growing market.
Google Trends shows search volume for Influencer Marketing is experiencing a 5,000% growth over the last 3 years. Being an early adopter means less money spent with a bigger return. It also makes the brand look smart and proves they understand their audience.
How To Choose Influencers
“Influence” is described as the sum of the number of followers on a platform, the brand affinity (i.e how much credibility and expertise an Influencer is perceived to have), and the strength of the relationship between the Influencer and their audience. The number of followers is just a small portion of what makes them important to a brand. An engaged Influencer is exponentially more valuable to a brand than a popular one. In order to choose the best Influencer, first consider their average engagement on the platform they will be using to promote a brand. The higher the engagement, the higher their quality score is.
Next, consider audience alignment between the brand and the influencer — the better the Influencer’s audience aligns with the brand’s the higher quality score that Influencer gets. Once the Influencers’ platforms are identified, categorize them by cost in order to diversify our efforts according to the brand’s budget.
For a brand with a $1,000 monthly budget to put towards influencers, I might categorize Influencers based on three tiers.
In this situation, I would try for an Influencer from Tier 1, two from Tier 2 and at least two more from Tier 3. Diversifying the Influencers means a greater reach, multiple brand advocates that reinforce the same brand messaging and more credibility to your brand.
- Tier 1: $450+
- Tier 2: $1-$449
- Tier 3: No payment (or PR box)
Key Performance Indicator
The strategy doesn’t stop after an Influencer is chosen. Accountability is a key pillar for anyone's success, and that means reporting on the success of each Influencer Marketing effort. As mentioned before, engagement is the most valuable action on any Influencer campaign. But not all engagement is equally valuable. Different social platforms have different engagement metrics, but each platform will have a standard ROI equation that we will use in order to report on the success of each Influencer campaign.
Because Influencer Marketing is a long-term strategy, it is impossible to capture all impressions, acquisition or sentiment in a short time frame. The posts (especially on YouTube and blogs) only increase awareness over time, so choosing an end date isn’t useful. Engagements we can track at any time.
This Engagement Tracking Table explains how I weight each engagement action for each platform. The campaign reports are created (after an adequate time frame, usually monthly) from this table and the Quality Score equations I've built.
Quality Score Equations
Upon launch of an Influencer Marketing Strategy, there will be a few months with heavy testing. Over time I am able to identify the best influencers and audiences for each brand. In order to calculate ROI and track success of each campaign, I use the following equations for each platform.
Pinterest ROI Equation: (Frequency)(Repins x3)(Likes x2)(Comments x1)/Cost
Instagram ROI Equation: (Frequency)(Likes x2)(Comments x1)/Cost
Twitter ROI Equation: (Frequency)(RTs x3)(Likes x2)(Replies x1)/Cost
Facebook ROI Equation: (Frequency)(Shares x3)(Likes x2)(Comments x1)/Cost
YouTube ROI Equation: (Frequency)(Views x3)(Likes x2)(Comments x1)/Cost
Blogs ROI Equation: (Frequency)(Shares x2)(Comments x1)/Cost
Of course each brand will have to decide what their target spend is per platform, but the important thing to remember is it is not the same number as the paid social ad spend. The strategies, results and way in which the audience engages are completely different. Both bring separate value and your brand needs both.