The following is a guest contributed post to MMW from Shawn Arora, the founder of LaunchSpark, a Toronto-based explainer video agency with a focus on ROI.
The consumption of social media has grown by leaps and bounds over the past decade. Instagram, the mobile social network that Facebook acquired for one billion dollars in 2012 is now worth hundred times more. In terms of monthly active users too, this social media platform has grown from 500 million in June 2016 to one billion two years later.
This dramatic rise in social media consumption has contributed to the growth of a new breed of influencers and micro-influencers. These are social media users with a large following of users who are interested in specific niches.
For instance, a pastry maker who posts pictures of their desserts is bound to gather a following of users interested in pastries. Similarly, a gym instructor posting videos of their training sessions is likely to gain a following of fitness enthusiasts. Using these users to promote your bakery or fitness equipment is a great way to not only reach a targeted audience, but also win the trust of these prospective customers.
At the outset, influencers are much like celebrities who endorse brands in exchange for money. But as the industry has grown, we are witnessing a noticeable evolution in the way the industry works.
Size is not everything
One of the most noticeable evolution in this space is the follower size commanded by an influencer. Traditionally, influencer or celebrity based endorsements have relied on the overall authority commanded by the endorser. Not surprisingly then, the highest paid athletes or celebrities are often those with the biggest following. Their endorsement carries more value than one made by a low ranking celebrity.
With influencer marketing however, the focus is not on the number of followers, but how niche the following is. Marketers routinely advise their clients to seek influencers with less than 5000 followers or so.
There are two reasons why this is the case. Firstly, such influencers have a high percentage of followers that meet a brand’s target group. Consequently, your campaign is likely to reach a larger chunk of users who are prospective customers. Compare this with a celebrity like Kim Kardashian who enjoys several millions of followers who do not all fall into the same demographic.
Secondly, such influencers also offer better ROI. This is because at a low follower count, influencers tend to be less demanding and offer a more thorough review of your product. This is likely to bring greater exposure to your brand and consequently higher conversions.
Focus on conversions, not branding
Influencer marketing is essentially the social media equivalent of celebrity advertising. The focus in its early days was brand building and media exposure. Not surprisingly then, some of the biggest social media influencers were also those who were media celebrities. However, the objective of influencer marketing has seen a significant shift in recent times.
Like most other forms of digital advertising, influencer marketing today is highly monitored for conversions. One ‘Psychology of Following’ study of over 4000 consumers published by Olapic shows that over 31% of these respondents had purchased a product based on a social media influencer post. This also follows the pattern of other similar studies in the past that showed that an overwhelmingly large number of users rely on social media recommendations while making a purchase.
Focusing on conversions is a better way to gauge the success or failure of an influencer marketing campaign. This is particularly vital for micro-influencer campaigns where brand exposure and visbility is not of much consequence. Measuring the conversion rate also enables a marketer to benchmark an influencer marketing campaign vis-a-vis other forms of digital marketing like paid advertising.
Traditional endorsement campaigns that had branding as their sole objective did not deviate much from their core messaging. But with modern micro-influencing campaigns, marketers have begun experimenting with both influencers and the message that they want to market.
For instance, brands may hire several micro-influencers, each with their own niche following, and market various products and offers to these distinct audiences. There are a few advantages to this strategy. If you are launching a new line or are not sure about the most effective positioning statement for your brand, it makes sense to experiment with different ideas in silos to measure and identify the best path forward for the product.
More importantly, the turnaround time to measure conversion rate is pretty short with micro-influencers. Brand building can take several months, if not years. Small businesses with bootstrapped budgets may have well depleted their marketing budget before they can realize the ROI from their campaigns.
While these changes have made marketing using influencers much more palatable to the bootstrapped marketer, this is not to say that traditional influencer campaigns do not have a place in the industry today. Even on social media, celebrities like Kim Kardashian and Selena Gomez continue to be the biggest influencers. They continue to be popular for brand building campaigns and for those products that do not need a niche audience group.
But at the same time, such campaigns are increasingly being used by startups and small businesses to market their wares and build a following for their brand and business.