Influencer marketing is one of the newest and fastest-growing tools in the marketer’s toolbox. Forbes magazine considers it one of the most effective forms of advertising. In 2017, it generated $2 billion of revenue. That number is expected to double in 2019, and could reach $10 billion by 2020.
The concept behind influencer marketing is that social media personalities – some famous, and some not – influence what products and services people buy. These personalities leverage their influence on behalf of brands and companies, who pay to be favorably mentioned or represented by the influencer to their followers.
Social Media Today defines two types of social media influencers: micro-influencers and macro-influencers. Micro-influencers are those with 1,000 to 10,000 highly engaged followers who like, share, comment on, or otherwise interact with the influencer’s content. Their like rate is around 8 percent. Micro-influencers are often industry experts, bloggers, niche-market personalities, or recognized authorities on a subject.
Macro-influencers have 10,000 or more followers and a like rate of about 2.5 percent. They’re often household names (think “Kardashian”) with broad appeal and a loyal and diverse audience. Macro-influencers may have millions of followers on one or more social media platforms and may not be experts on anything, in particular.
1. “What is it, exactly?”
Influencer marketing is a cross between a testimonial, product mention, and product placement. A blogger might mention your company or product in passing, or invite you to write a guest blog. Similarly, a podcaster may give you a mention or invite you to be a guest.
Influencer marketing can also take the form of a product review, a share on an Instagram or other social feed, or a retweet. Whenever an influencer gives a brand or company access to their followers, that’s influencer marketing.
2. “How does it work?”
A company or brand may approach an influencer with a proposal, sometimes with the help of an agency or influencer marketing firm. The company can provide a brief with guidelines about how they want their product or service presented. For example, a wood flooring company might request their product always be photographed with a leaf or plant to communicate a sustainability message.
But what makes influencer marketing work is its authenticity. So while the brief might contain critical points, the influencer should be given the flexibility to create shareable content they know will resonate with their followers.
Whether through Instagram posts and stories, Snapchats, Facebook posts and videos, YouTube videos, tweets, or podcasts, every piece of content posted by an influencer is an endorsement or recommendation by a trusted source. Social media influencers can drive engagement and word-of-mouth communication at higher rates than standard, organic methods. (That content you post on the company website or social media platforms that people just happen to find through searches or visiting your pages.)
On a local or regional scale, a wood flooring company in a metropolitan area might work with an interior design blogger with a large group of loyal subscribers, or well-established contractor with a popular YouTube channel. A company that reclaims old barn wood for new flooring projects may enlist the support of a sustainability expert with a large Instagram following. These will most likely be micro-influencers.
On a larger scale, a manufacturer of flooring products may enlist the support of a macro-influencer who may or may not have anything to do with the flooring industry, wood, or sustainability. The best choice might be somewhere in-between – maybe a specialist in green building practices, home construction, or remodeling with a following of 5,000 or more.
3. “Why should I consider it?”
Commercials have become background noise. We ignore them or fast-forward through them; and when we do see them, we don’t trust or believe them.
A 2014 study of 1,300 millennials conducted by Elite Daily found that only 1 percent of respondents trusted advertising. Less than 3 percent of them ranked TV news, magazines, and books as influencing their purchases. They’re immune to spin and inauthentic messages, so both traditional advertising and PR are out for this demographic.
Similarly, Generation Xers value sincerity, authenticity, and truthfulness. This demographic is very digitally astute, active on social media, and many are open to personalized brand experiences and targeted, unique messages.
Together, these two groups represented 68 percent of the U.S. labor force in 2017 according to Pew Center Research and the U.S. Department of Labor statistics.
Here’s the bad news. The old ways of marketing that worked with Baby Boomers – flyers, TV ads, radio spots, billboards, and direct mail – aren’t going to work with Millennials and Gen Xers. The good news? Influencer marketing overcomes this barrier because the message is part of the content, and it comes from someone they already trust.
4. “What are the benefits of influencer marketing?”
5. “Does it really work?”
In 2016, shopper-focused influencer marketing firm Collective Bias surveyed 14,000 adults and found the following:
- Thirty percent of people are more likely to purchase a product based on a recommendation from a non-celebrity blogger.
- Of that 30 percent, 70 percent of 18- to 34-year-olds most preferred peer endorsements.
- Nearly 60 percent of survey respondents have considered a blog review or social media post on a smartphone or tablet while shopping in-store.
- Men are two times more influenced by blog reviews than women. One in five men (18.3 percent) have been influenced by blog reviews while making in-store purchases versus only one in 10 women (9.2 percent) who have done the same.
According to the Linquia study:
- Ninety-four percent of marketers find influencer marketing effective.
- Influencer marketing can generate 11 times the ROI of traditional advertising.
- Ninety percent of consumers trust peer recommendations, but only 33 percent trust traditional ads.
- Eighty-eight percent of customers trust online reviews by strangers as much as they would a recommendation by a friend.
Influencer marketing is growing in popularity. Another study by Influencer Marketing Hub found an increase of 325 percent in the searches of the term “influencer marketing” on Google from 2016 to 2017.
Adding influencers to a company’s marketing strategy can also create brand awareness and increase SEO value through more brand mentions and increased backlinks.
6. “How much does it cost?”
The costs associated with influencer marketing vary widely. The average cost to hire a micro-influencer is about $180 per post. The cost for a macro-influencer can range from $400 for a single Twitter post to $187,500 for a YouTube video according to The New York Times.
Following are the current compensation models for influencer marketing:
- Pay per post or pay per video: influencers are paid a flat rate for posting, tweeting, or publishing a piece of content.
- Free product or experience: influencers receive a trip, product, or other experience in return for creating, publishing, or sharing content.
- Cost per engagement (CPE): influencers are paid per like, share, retweet, comment, or other engagement.
- Cost per click (CPC): influencers are paid when consumers take an action inspired by their content (for example, clicking through to a website or landing page).
Some influencers will accept compensation based on sales or customers acquired. The Linquia study found that, although the “flat rate” or pay-per-post model is most widely used, only 17 percent of respondents feel it is effective. The highest-rated methods were the cost-per-engagement and cost-per-click methods, with 25 percent of respondents considering them “most effective.”
7. “How can I find influencers?”
First consider your position in the marketplace, target audience, and goals. If sustainability is a priority, look for influencers who are committed to green building. If your target audience is high-end residential contractors, align yourself with high-end interior designers or builders on Instagram, for example.
When evaluating social media influencers, consider the following:
- They must be trustworthy, engaging, and a credible source of information.
- The influencer should have a high number of followers on social media platforms.
- Their posts must have high engagements.
- He or she must be passionate about what they do and share that passion with others.
- The influencer should post consistently and communicate well with their followers.
If the idea of influencer marketing is appealing, but doing it yourself sounds too complicated or time-consuming, consider retaining an agency like Linquia or Collective Bias that specializes in matching companies with influencers.
8. “How do I get started?”
Start by researching the topic and looking for potential social media influencers in the geographic market or industry. Search your LinkedIn, Instagram, Facebook, and Twitter platforms for contacts, followers, and friends. Use hashtags to narrow searches by topic or geographic location.
List potential influencers on a spreadsheet. Follow them for a few weeks to see if they look like good candidates. Make notes about their number of followers, engagement, and topics discussed. Like, share, or comment on their content to start building relationships. Track your contacts with them and keep notes about your conversations. When you find a candidate, reach out to see if they’re interested in collaborating.
As with any new strategy, start small and test. Set goals, choose an appropriate influencer, try different options, and evaluate the results. Learn from each attempt and tweak the content, delivery, and execution to determine if the relationship is worth pursuing further.
Katrina Olson is a marketing consultant, trainer, writer, and principal of Katrina Olson Marketing + Training. Reach her at email@example.com.