Influencer Marketing

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Loren Gray (@lorengray) has over 40.8 million TikTok followers (launched in 2017), earning an estimated $175,000 per post.

PewDiePie has over 100m followers and earns over $15 million per year– that’s more than the average salary of starting NBA players.

Why and how are “influencers” able to make such substantial income doing something that seems so simple as just posting about brands?

It works. On the other side of the exchange, brands are spending hundreds of millions of dollars a year on influencer marketing, For every $1 spent on influencer marketing, businesses make back $5.20.

Influencer marketing capitalizes on the authentic voices of influencers and content creators that have carefully built relationships with their followers.  An influencer marketing agency makes use of its existing and new relationships with influencers and helps ensure that every influencer marketing dollar spent goes towards the customer’s key objectives.

Often, the magic sauce that brands crave isn’t access to their target audience, but the ability to capture their attention the same way influencers can.

Essense

What is Influencer Marketing?

Word of Mouth at Scale

Influencer marketing is a type of marketing that relies heavily on individuals (figures, accounts, etc.) to bring your message in front of a specific audience.

Instead of sending marketing messages directly to a general group of people, you would use influencers to deliver the message for you. Influencers have built quasi-personal relationships with their followers can often achieve phenomenal results for brands. From the audience’s point of view, every post, regardless of whether it is sponsored or not appears as an endorsement or validation of a certain product.

For example, let’s say we’re starting an energy drink company called WAM. Our target audience is young, active, and fit people in Miami, Florida. In theory, we could launch a Facebook campaign targeting this set of demographics, but we may be able to get more WAM for our buck with influencer marketing.

From our in-depth analysis, we learn that Miami, more so than most major cities in the United States, tends to gravitate towards the glitz & glamour, celebrity, and fitness. We also learn that there are hundreds of Miami-based influencers with followings over 1 million and thousands with followings between 100k to 1m.

So, we decide to work with five of the top influencers in the city, offering them $1k each to make an Instagram post drinking WAM energy drink, tagging our social channels, and offering them a personalized 20% off code to share with their audience. 

Boom– the $5,000 we spent got us 150,000 new followers and sold $12,500 worth of WAM. Not only were we able to realize a healthy 2.5x RoAS, but we also boosted our own audience for pennies ($0.033 per follower.) 

Influencer marketing is often intertwined with digital marketing strategies like social media marketing and content marketing. To get the absolute most out of your influencer marketing, you need to make sure your brand’s social profiles are on point and your influencers need to have some sort of content to deliver (often created by the influencers themselves.)

The Psychology of Influencer Marketing

It’s easy to get stuck in one of the many digital marketing rabbit holes, and it’s always important to remember this: most marketing channels are only effective because they adhere to general psychological principals. 

The only thing new about influencer marketing is channel distribution. Our parents and grandparents remember watching a commercial on one of a handful of channels in which a celebrity endorses a product they have little to zero logical connection to. 

The advent of social media has taken the centralized attention pools and decentralized them over thousands of accounts. Today, instead of watching one of a few TV channels, consumers are scrolling through Facebook, Instagram, and Twitter. They can follow their favorite celebrities on those platforms and effortlessly discover new people to follow.

There is very little disconnect between influencers and one’s own friends and followers, however, brands are often viewed as intruders on an otherwise intimate experience. Influencers accomplish three major feats for brands:

  • They serve as aggregators: Finding an influencer with a perfectly matching audience is like stumbling upon a perfect oasis. Many influencer accounts not only have hundreds of thousands or millions of followers, they also have warmed up relationships with them. 
  • They act as gatekeepers: Most influencers cherish their relationship with their audience and run the risk of devaluing it by advertising a brand that doesn’t make sense for them. 

They validate a product or brand: Roughly 86% of consumers read local business reviews before making a purchase. In a way, an influencer post serves as a highly credible review for a product or brand. “Well, if Organic Olivia says this toothpaste is good, I might as well give it a try!”

Prospects

What does the future of influencer marketing look like?

We see influencer marketing becoming even more formalized in the near future.

With so much money pouring into the influencer marketing industry, it’s no surprise that influencers are banding together to ensure the best possible rates in a highly competitive marketplace.

Influencers who work together start looking more like full-blown media companies consisting of several decentralized but wildly popular and successful accounts. This can be anything from collaboration houses where multiple influencers join together to make cameos and package influencer deals, to talent incubators where creators nurture up-and-coming influencers, to full content studios that work with big brands such as Chipotle, Disney, and Coca-Cola.

Additionally, many tools and third-party platforms are coming out to analyze performance and qualify audiences before massive marketing budgets get set on fire. For example, Dovetale is a platform to manage relationships with influencers and judge campaign success. Other tools help validate influencer followings and engagement, revealing whether an influencer’s following is real and not bots.

Each influencer has a unique following that responds to particular messages. A social media influencer agency aims to make the best use of influencers and available tools to get the most relevant and best-performing content in front of the right people, ultimately leading to more sales for their clients.

We see a world where working with influencers is within reach for every business. However, you can’t simply just contract a handful of influencers and expect magical results. The reality is that many influencer followings can be fake, and sometimes the content created either doesn’t match your or your influencer’s brand, leading to wasted ad spend.

That’s why it’s important to work with an influencer marketing agency that already has vetted relationships established with influencers so that every dollar goes towards making sales rather than waste.

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