What is Influencer Marketing?
This is a guest post by Lauren Jung, Co-Founder of dunnhumby Ventures portfolio company TheShelf.com
At one time or another, we’ve all been convinced to buy products based on biased claims made by brands, only to discover that the product wasn’t as great as its shiny marketing implied. This has caused consumers to become increasingly wary of any branded marketing, leading them to seek out validation from their own trusted sources before making a purchase decision.
This concept isn’t new and there are tons of of statistics out there to prove that brands need to incorporate more organic marketing tactics into their strategy. According to Bazaar Voice, 84% of shoppers now look to reviews prior to making a purchase decision. What’s more, sharing your content through influencers in your industry is found to increase conversion by at least a 3x-10x higher rate, says Content Marketing Institute.
With this much emphasis placed on the recommendations of an unbiased third-party, word-of-mouth is no longer optional. It’s a requirement in modern marketing. Everyday people and even customers have become the driving force behind sales, leading to a paradigm shift that is happening within the marketing world.
This Shift is a Messy One
This shift in marketing has turned the well-established Path-To-Purchase model on its head, giving rise to a much more dynamic Path, one that is different for each industry. Google has analyzed millions of consumer interactions via Google Analytics and using this data, they’ve designed a visualization of the effects that variables like company size, industry, and location have on a brand’s Path-To-Purchase. The new Path-To-Purchase has become an ever-changing moving target, requiring marketers to constantly be on their feet, ready to adapt at a moment’s notice.
This shift in influence is further complicated by new social networks being thrust into the equation each year. This year it was Snapchat and Ello. Last year, Vine. Savvy brands recognize that this new frontier in marketing requires a creative cocktail of techniques in order to effectively target their unique audience. There’s no “one size fits all” solution anymore: brands that are more visual in nature (e.g. fashion, beauty, decor, travel) lean heavily on visual networks like Pinterest, Instagram, YouTube, and Vine, while B2B companies that produce tons of long-form content are all over LinkedIn, Twitter and Google+. And then there are brands that are trying to appeal to millennials, so they’re allocating huge budgets towards newer platforms, like SnapChat and Instagram.
Targeting and relevance are another huge challenge. It’s not enough to just find someone who’s popular; in fact, it’s becoming clear as this form of marketing evolves that popularity has very little to do with influence. Brands are starting to explore relationships with mid-range influencers who have deep engagement with their audiences and are even outperforming larger thought leaders. "The whole idea is based on audiences trusting their peers more than brands," says Tom Buontempo, President, Attention, KBS Content Labs. He adds, "Audiences are more sophisticated and they can sniff out when a partnership doesn't feel authentic." According to the Technorati Digital Influence Report, 54% of customers believe the smaller the community, the larger the influence. Brands are tasked with finding very specific influencers who have the ear of their exact target demographic.
And if that isn’t enough, the final aspect that brands need to consider is also the trickiest. Unlike buying clicks via Adwords or Sponsored Tweets (where a brand is guided through a carefully designed setup process, followed by the immediate gratification of their pre-purchased clicks) the world of word-of-mouth and influencer marketing is like the Wild West of marketing. Aside from some mild FTC restrictions, it’s largely an unmoderated and an “anything-goes” sort of setup. No one is in charge. Millions upon millions of bloggers and social influencers are deciding willy-nilly what the going-rate is for their endorsement. Influence ain’t cheap! Additionally, results are not guaranteed. Brands are essentially placing bets on who is going to pay off for them. And these bets require a hefty amount of due diligence due to the fact that many social influencers resort to shady tactics like buying followers and inflating their vanity metrics in order to boost their appeal.
It’s Worth Getting Your Hands Dirty
Despite all of the annoyances that come with this new territory, brands are going all-in because the ROI potential is quickly surpassing that of more traditional forms of marketing, with many brands seeing unprecedented returns when marketing through their more vocal and influential customers.
On average, marketers who implemented an Influencer Marketing program in 2014 received $6.85 in earned media value for every $1.00 of paid media! Three industries performed above the $6.85 average, consumer packaged goods and food generated $11.33 per $1.00 spent, and retail and apparel generated $10.48. (More stats available in our Influencer Marketing Infographic here.)
So despite the mayhem that one can expect when jumping into the influencer marketing scene, brands don’t have much of a choice. Those who decide to sit out are going to get left behind. According to Social Media Today, 74% of global marketers say they will use ‘influence marketing’ as part of their marketing strategy in the next 12 months. What’s more, Adweek points out that nearly 60% of marketers plan to boost influencer marketing budgets.
Can one automate authenticity?
With every new addition to the marketer’s toolkit, comes a deluge of companies trying to provide an automated solution. When banner ads were all the rage, a variety of sites like Perfect Audience, Adroll, and ReTargeter came along to aggregate all of these efforts under one roof. As content marketing skyrocketed in popularity, thousands of companies like Hubspot, Contently, and Outbrain each took a unique stab at streamlining the tedious process of content creation and distribution. For social media, there’s Buffer, Hootsuite, Sprout Social, and thousands of other options out there that eliminate the legwork involved in constantly being present on the various social networks.
Influencer marketing is a very different beast, compared to earlier, more established marketing channels, in one key way. It relies on a very unreliable variable: the free-will of unbiased people, thus making automation a very difficult thing to achieve. Automation breeds insincerity and that is the opposite of everything that influencer marketing stands for. Customers crave unbiased, organic recommendations from the people they trust. That’s the bottom line.
Of course that doesn’t stop the thousands of businesses out there that are hard at work building products that they claim will fix this space through automation. Since this marketing channel is still relatively young, brands will continue to get suckered into buying these various solutions, in hopes that it will be that magic tool that will make their job a little easier.
There’s no denying the need for that elusive, magical solution. Influencer marketing is full of potential but it’s hard to tap into for the same reasons that make it so great. It’s wild and organic and automation would only defeat its purpose.
So could it be that these automation services have it wrong? Could it be that the solution to this problem isn’t a point-and-click wizzy-wig product, but something a little less obvious? Something more fundamental?
The Need for a Data-Driven Solution
Since the birth of the internet and social networks, people have become connected in a completely different way. Geographical boundaries have become irrelevant. People from anywhere in the world are able to connect with one another based on literally anything - celebrities that they follow, hobbies they enjoy, imagery they find inspiring, political views they subscribe to, health problems they want to research, songs they listen to, brands they love, and products they’re buying. People everywhere are connected by their interests that are manifested through the content they create and share.
These connections are becoming more and denser as time goes on due to the sheer volume at which new content and connections are being generated.
69,120 hours of video are uploaded to YouTube every day
985,648,320 pieces of content are shared on Facebook everyday
144,000,000 tweets are posted per day
5,184,000 Instagram photos are shared per day
And the list goes on.
This content, and the various interests that this content represents, forges these connections between people.
To put it another way, people are increasingly inter-connected to one another by their interests through the “content”:
They endorse these interests
They engage with others about these interests
And they are producing a constant stream of content that highlights these interests…
In essence, they’re forming an ever growing web of interest...or as we like to call it, a global interest graph.
When you think about this global interest graph from a strictly ecommerce perspective, hidden within this deluge of content, opinions, connections, and endorsements are nuggets of marketing gold. Brands are connected to influencers, who are connected to consumers, all of whom are connected even further via individual products and even purchases. Imagine the power a brand could attain if this graph was queryable. All of this raw noisy data would suddenly be actionable. What customers have influence over my specific demographic? Who is influencing my currently untapped markets? What pricing structure will sell more of my products? When is the right time to run promotions? What trends are getting ready to erupt?
Additionally, this global interest graph would have the power to supercharge any number of existing marketing initiatives through the use of big data, allowing brands a level of targeting that would never before have been possible: loyalty programs, ad networks, influencer marketing, trend prediction, drip campaigns, social listening, sentiment analysis, recommendation engines, and much more. All of these solutions exist separately today, yet they are very much interconnected via the global interest graph.
Brands need to make sure that they are a part of this wave of influence. Authenticity is everything…it’s a requirement for brands in today’s market. In order to achieve good results, brands need to focus on what matters most: marketing via the influencers who are in the best position to sell their products. This requires a data-driven approach to locate these very specific people within the sea of millions of other influencers fighting for attention, as well as constructing campaigns that will speak to their unique audience. As I mentioned before, there’s no one-size-fits all here. This industry is exploding with potential and for the time being, anyone who tries their hand at it, should be prepared to roll up their sleeves a bit. Because it’s still a little messy.
With all of the attention that this space is getting right now, a novel solution is inevitable. But it will most definitely look different from the obvious solutions available today that rely on simplification via automation. Rather than focusing on how to automate authenticity, a notion that is completely oxymoronic, the end solution is going to be a data-driven one, that provides access to the immense amount of data currently hidden within this global interest graph. When this feat has been achieved, the face of advertising could be fundamentally changed forever.