Jun 27, 2018

Influencer Marketing – Everything You Need to Know in the Current Landscape

by Digital Marketing Institute

People have always been fascinated by celebrities, and many members of the general public look to these influential people for guidance about what to wear, where to hang out, what to eat, things to buy, and much more. Thanks to the rise of the Internet and social media, fame and influence are no longer just reserved for celebrities – now everybody has an opportunity to carve out a niche for themselves in the public eye.

When these people are particularly charismatic or experts in their fields, audiences come to trust them, and they become influential to their followers. These people are aptly known as influencers, and while sometimes they are celebrities and stars, they can also be bloggers, specialists, or even just regular people who are knowledgeable about a topic. Since the early 2000s, brands and marketers have been leveraging the power of influencers to grow their audiences and drive sales, and today they're still finding new ways to incorporate influencers into digital marketing campaigns.

Influencer Marketing: What it is and How it Works

Influencer marketing is the practice of identifying people or celebrities who have influence over potential buyers, and partnering with those influencers to increase reach and drive growth. For instance, say you ran a company that sold perfume and wanted to get more Millennials to buy your products.

Instead of running a Facebook ad to target prospects individually, you could instead find a successful Instagram influencer who’s popular among Millennials in your target market. As an example, when Buick held a contest to help design the Encore range of cars, they partnered with 10 Pinterest influencers in fields that included design, food, lifestyle, and fashion. The influencers blogged about the contest and created boards for the campaign, which managed to generate 17 million unique views. And considering 60% of Pinterest’s 150 million users are under the age of 45, you can bet the company was successful in reaching newer and younger audiences.

Influencer marketing works because of social proof, which is especially important among Millennials and Gen Z-ers. Social proof is a psychological phenomenon where a person will be more likely to engage in an action if his or her peers have done the same. For example, you'd be more likely to read an article that’s been shared 20,000 times versus one that had no shares. Similarly, many people will opt for the nightclub with the long lineup (despite having to wait) versus going to the one that nobody’s waiting to get into. Influencer marketing uses this power of social proof to get prospects to engage in the same actions as others.

The Internet, Social Media and The Rise of Influencer Marketing

Influencer marketing is a tactic that’s been around since the late 1800s, and one of the earliest examples of an influencer was a woman named Nancy Green, who was an activist, popular storyteller, and cook hired by R.T. Davis Milling Company to be the face of Aunt Jemima—that’s right, the iconic face on the pancake mix box was a real person. Since that time, brands all over the world have been using celebrities to endorse and sell their products.

The shift from celebrity endorsement (though that still exists) to influencer marketing can be traced back to the widespread use of the internet. Before the internet, celebrity was typically only achieved by people who appeared in the media, including the radio, television, movies, and the like. The internet changed that, however, because it democratized access to influence by connecting people all around the world. The earliest influencers on the internet were bloggers in the late 90s and early 2000s, and successful ones managed to gain large followings of people who faithfully read posts.

When social media came along, namely Facebook and Instagram, it became easier than ever for bloggers and others to establish a wide reach, and many popular bloggers started recognizing their influence. At the same time, there were early Instagram users who started gaining popularity and mass followings, and the same thing was happening on Vine, the platform for short video.

As more businesses began establishing a presence on social media, they began partnering with these non-celebrity influencers, finding ways to insert product placements, endorsements, and other promotions into influencer videos and photos. Since then, the practice of influencer marketing has only continued to grow and become more sophisticated, and although Instagram is still the top platform for 92% of all influencers, there are also influencers active on YouTube, Facebook, and other networks as well.  

Major Benefits of Partnering with Influencers

There are plenty of reasons why influencer marketing is becoming so popular, and the first is that it works. The return on investment (ROI) on an average influencer marketing campaign is 16 times higher than a digital marketing campaign and 11 times higher than a banner ad campaign. Beyond that, influencers can help increase brand awareness because they have access to a captive and interested audience that extends far beyond your current audience. Partnering with an influencer is a turn-key strategy: they’ve already put in the work building the audience, and now you can leverage their hard work to reach the people they’ve already established relationships with.

Moreover, influencers can also build a company or product’s reputation, and this is thanks to the role authenticity plays in influencer marketing. The most successful influencers aren't ones who will hock any product that comes along. Rather, the influencers who have the most sway are the ones who represent brands and products they actually like and support, and this authenticity is what audiences are looking for. In other words, the right influencer is actually an advocate, and this creates trust with the audience. This trust is then conferred upon brands by association because when an audience sees an influencer supporting a brand or product, they trust that the influencer has a good reason for doing so, and this acts as an endorsement for the brand.

Current Trends and Best Practices

Influencer marketing in its current incarnation is still in its nascent stages, so trends and best practices are coming and going all the time. One of the biggest changes to the practice occurred in 2017 when the Federal Trade Commission laid out some ground rules about the relationships between brands and influencers. The most important takeaway from the new rules is that influencers now have to be very clear that they're being compensated for their endorsement, which guarantees a level of transparency for all brand-influencer partnerships.

Another development is that social networks themselves are becoming increasingly involved with influencer marketing, and are taking steps to make it easier for brands and influencers to create branded and sponsored content. Facebook and Instagram are two examples of platforms that have launched tools to measure and identify sponsored content, and more platforms are sure to follow.

The rise of the micro-influencer is another trend that will continue to grow, because these influencers have a number of benefits to offer brands. Micro-influencers are ones who typically have between 1,000 and 50,000 followers, and despite having less reach than influencers, they tend to have more impact on their audiences. This is because micro-influencers are involved with their audiences on a more personal level, and as a result, their engagement rates are 60 % higher. As such, these influencers also tend to be more trusted by their followers, and this means a stronger endorsement for a brand.

Finding the Right Influencer for a Brand

One of the main challenges of influencer marketing is finding the right influencer to partner with. The good news is that there are tools being launched that can make the process easier, and this includes platforms like TapInfluence, which helps brands find and manage influencers.

The traditional way of locating potential influencers is a process that involves searching social sites to identify people in your niche with plenty of followers, reaching out to see if they're a good fit, and negotiating a partnership. Although it sounds straightforward, a great deal of thought should go into these partnerships, because a good influencer must have:

  • The right context: An influencer who’s a food critic would be a natural partner for a restaurant, but you likely wouldn’t partner with that influencer if you were an electronics supplier
  • The right values: A hard right-wing influencer probably isn't the best fit for a brand that values pacifism and other left-leaning beliefs, for instance
  • The right audience: An influencer’s audience must include your target audience in terms of interests, habits, demographics, and more
  • The right engagement: An influencer who doesn’t engage the audience hasn’t built the trust and strong relationships you're looking for in a partner, so check for likes, shares, and comments on the prospective influencer’s posts

Influencer marketing is going to be a cornerstone of social media marketing in the future, and many brands are already getting on board. Influencers are a great tool for digital marketers because the right influencer has reach, has an established audience, and built trust with that audience, and has persuasive powers among followers. Digital marketers can leverage influencers to increase brand awareness, improve a brand’s reputation, reach new audiences, and drive overall growth, and influencer marketing should have a place in any comprehensive digital marketing strategy.

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