A few years ago, influence and influence scoring was all the rage in digital marketing thought leadership. Klout promised that it could be an accurate measure of influence for companies to identify and reward influential online consumers. Fast forward to today and the landscape is a bit more complicated. Klout was purchased by Lithium, and the buzz diminished. Additionally, the landscape of where influence grew for certain users is changing rapidly. Social sharing avenues such as Vine, where many influencers accumulated followers and cache with advertisers, are fading. Even Instagram, a mainstay of visual social sharing, has added functionality to compete with Millennial favorite Snapchat.
Research corroborates that influence marketing makes sense. Today, we trust strangers more than celebrity spokespeople (Daboll 2011), and many trust the recommendations of strangers more than advertisements.The success of ratings and reviews on Amazon and TripAdvisor demonstrates clearly that consumers look to others like them to guide purchase decisions. That said, the landscape is getting more complicated, with the FTC stepping in and requiring greater disclosure of compensated influencer posts.
While I research social media and brand community as part of my academic research agenda, I like to stay connected with industry and digital thought leaders. Before teaching influencer marketing this semester, I spoke with Mark Fidelman, founder of Evolve, Inc, an influencer agency. His organization works with over 5,500 influencers, with an estimated 23-million-person reach. I met Mark a few years ago at a conference he organized, and he always has an interesting and prescient take on what’s on the horizon. I asked for his insight on where the opportunities exist for companies and the complications of measurement and regulatory compliance.
Q: What is your take on how influencer marketing has evolved since the days of Klout? Can you give me a couple of examples of success stories?
Mark Fidelman: Influencers have evolved from people promoting things on Twitter and blogs to influencers creating Hollywood-level stories told through short- and long-form video (YouTube and Instagram). The most advanced influencers produce Web.TV shows for brands designed to educate and entertain prospects while helping convert them into customers.
We frequently work with so-called power-middle influencers, YouTubers, for example, who generate an average 50,000 to 250,000 views per video. These are frequently the people who generate the highest engagement rates and most sale. For example, the 20 power-middle beauty YouTubers we collaborated with on behalf of online prescription customized skincare provider Curology generated about $15 in annualized subscription sales for every dollar spent on talent fees.
We prefer to work with micro-influencers either when A/B testing campaign elements or for hyper-local marketing campaigns. SociaLite Vodka’s influencer marketing campaign is an example of a startup driving brand awareness and product trials in cities otherwise inundated by traditional advertisers. The company is using Socialpeeks to conduct social listening and identify local micro-influencers who are talking about healthy alcohol options, gluten free foods and healthy lifestyle choices. You can generate multiple touchpoints by recruiting large groups of micro-influencers whose social communications generate high response rates.
Q: Authenticity and disclosure of influencer comps have long been viewed as a best practice. Now the FTC requires greater disclosures, where #ad or #sp are insufficient. Does this make influencer marketing more challenging now?
A: Greater disclosure requirements won't change much. It just provides greater clarity on whether that Buzzfeed article has been paid for or not. It remains the marketer’s responsibility to craft messaging that gets your brand’s messages across while leaving plenty of wiggle room for influencers to do their thing. If the audience, or the influencer, senses too much brand interference, the video may be panned in the comments and is likely to underperform.
Q: What type of measurement and accountability are brands looking for from influencers and their agencies? Are there specific KPIs that are critical for showing Return on Investment & Return on Marketing?
A: We hold the influencers accountable for delivering messaging according to brand guidelines in all content and promotions agreed to in the contract. The bottom line metrics are cost per conversion, cost per click and cost per view. To gauge brand amplification, we also report total reach and engagement.
Key Takeaways: For me, the big takeaways from Mark’s insight are that influencer marketing still has an important place within the integrated marketing communications mix as a message in the customer journey, but it has to be done with care. It can provide reach at a lower cost that traditional media, but there are watch-outs and pitfalls. The marketer still has responsibility to vet the influencers to ensure they align with the brand and its audiences; clear key performance indicators must be set up ahead of time to quantify performance and optimize over time. Knowing what the impact of these efforts on reach and return on investment makes future budget requests and non-traditional tactics easier to justify.
Understanding the latest requirements on disclosure complicate the process, but the FTC has been proactive about publishing its restrictions. It is important that marketer remain vigilant in monitoring posted content as influencers make mistakes (such as copying the message guidance into a post). This adds to the incredibly complicated web of strategies CMOs can employ to facilitate a frictionless customer journey. This process requires active monitoring and coaching for all participants, and a specialist agency focusing on influencers can manage some of this load. I would argue that many changes and developments are eminent, so more research and campaign results will further refine the practice.