Social media influencer marketing, or simply influencer marketing, has become a very popular model for advertising and engaging audiences for brands in recent years, due to the overwhelming increase in the use of social networking sites and other digital platforms with social components.
There are roughly 3.6 billion social media users in the world today. Out of these, most lie in the various brackets between the ages of 18-44 years. Because most mainstream brands mainly target groups within these demographics, and only 1 in 4 individuals follow brands they buy from on social media, influencer marketing is now an indispensable marketing tool given its fluidity and seeming boundlessness.
Who is a Social Media Influencer?
A Social Media influencer is an individual within a particular niche (e.g., fashion, skincare, collectable footwear) who has established a sound presence on various social media platforms for themselves due to their specialized content, knowledge, or insight regarding the field. Such a person is seen as a reliable figure of authority in all matters related to said niche and, thus, gains the trust of their audience. This unique mixture of content creation and trust-based engagement is exactly what gives influencers their name. They are online entities with a significant hold over people’s opinions and behaviours.
Studies have shown that up to 49% of consumers rely on social media influencers for product/brand recommendations. 92% of marketers now believe that influencer marketing is a useful strategy. Additionally, about 17% of companies spend half of their marketing budget on influencer-based marketing. Meanwhile, 55% of companies have a standalone content marketing budget.
However, keeping these numbers aside, it is important to understand some fundamentals of influencer marketing in order to ensure the best results. Influencers vary depending on the size of their social media following, preferred content channel, and the specific niches and audiences they are comfortable navigating. Before taking any other steps, an influencer marketing campaign should specify the desired characteristics they are looking for in influencers.
Types of Influencers
Broadly speaking, there are 3 types of influencers, based on the size of the social media following they have. They all come with different perks:
- Micro-Influencer: These influencers have around 10,000 – 100,000 followers. Micro-influencers are a great choice when the brand’s goal is to generate engagement because the close bond these influencers share with their followers boosts the population’s willingness to trust the brand. They also tend to have audiences that share a few common characteristics thus making content tailoring easier. Several studies have shown that marketers prefer working with micro-influencers for these reasons.
- Macro-Influencer: They have between 100,000 – 500,000 followers and have similar functions and benefits to micro-influencers, just at a larger scale. They also have the added benefit of greater awareness building.
- Mega-Influencer: With a following of anywhere 500,000 and 2 million, mega-influencers are very expensive to collaborate with. However, their follower count ensures that they will spread the message about the brand to as many people as possible. They are a great option for awareness building phases of campaigns and should always be collaborated with on an exclusive or semi-exclusive contract basis.
- Celebrity-Influencer: Celeb-influencers may or may not be actual celebrities, but they have celebrity-like followings, with 2 million+ followers, at least. They generate immediate impact but due to diverse demographics within their follower base and lesser influencer-follower interactions, customer loyalty might become a blind-spot.
Additionally, it is imperative to pick an influencer whose goals and values align with your brand motto. Paid promotions are only convincing when the content is authentic. This is best described as the influencer’s brand affinity. The importance of brand affinity can be seen in the recent shift from influencers doing paid promotions to creating their own brands and products to sell to their followers.
As more and more influencers are starting their own businesses and flourishing, it is becoming apparent that users prefer buying a product when they perceive the endorser genuinely connects with it and finds value in it. One explanation for this can be that many followers find influencers relatable and feel as if they understand them better than their friends, a point which further intertwines with the trust-based approach of influencer marketing
Picking the Right Social Media Channels
There is an abundance of social media channels that can be used for marketing purposes in this day and age, and there are influential opinion leaders on all these platforms. Picking the right channel for your product makes or breaks an influencer marketing campaign, as many influencers have different brand affinities and personas on different channels.
Statistically, Instagram has become the most used social media channel for influencer marketing. A 2019 eMarketer report estimated that there were nearly half a million influencers on Instagram. Instagram’s popularity is due to its highly visual content that can be consumed within 10-15 seconds while getting the message across adequately. This is a favourable quality at a time when people spend less than 15 seconds on a single social media post.
A Mediakix report delves into other popular social media channels for influencer marketing, with YouTube taking second place. YouTube content creators can deliver real-time footage of them interacting with the products of the brand they are endorsing and showcase how or why they are a good item for their users to invest in.
Facebook and blog-posts are also channels worth considering according to marketers, where, in a similar fashion to YouTube, creators can delve deeper into the products they are endorsing through different media such as pictures, videos, demos, written content, etc.
Influencer Marketing Campaigns
After selecting the type of influencer and the preferred social media channels for brand promotions, companies can go forward and create a concrete influencer marketing campaign.
This involves picking products to promote, audiences to target, influencers to work with, framing a contract, selecting the mode of payment, and finally, chalking down the parameters to measure success, i.e., gauging the returns on investment (ROI).
An influencer must always be selected based on the audience you wish to target, as this will generate maximum reach. As mentioned above, working with micro-influencers is a great strategy for targeting specific audiences. There are many services that provide data about the audiences an influencer generally interacts with, making it easier for brands to pick the right ones. It must also be ensured that the influencer follows FTI regulations about promotional content.
After picking an influencer, the terms of the contract must be determined. Based on the campaign goals, a contract can be short-term or long-term; exclusive, semi-exclusive, or non-exclusive; and pay per post or pay per action. Additionally, the contract must clearly delineate how the goals will be measured, for example, applications used for tracking, post interactions seen as valid engagements, minimum affiliate link clicks required, etc.
When it comes to paying influencers, the range varies vastly depending on the number of followers the influencer has and the platform they will be using. A general calculation model can be found here. Influencers typically quote the price themselves or are guided by their agencies if they are using one. They can receive commissions for affiliate links and coupon codes or get paid per post, story, video, or blog-post they upload. Non-monetary exchanges like free samples, memberships, invitations to promotional events, etc., can also be used as payment. This strategy is especially useful with micro-influencers.
Measuring Return on Investment (ROI)
It won’t be too far-fetched to say that this is still an emerging area, with marketers trying to determine the best possible algorithm for measuring ROI. However, as influencer marketing campaigns have very diverse goals, it can be safely assumed that calculating ROI will also remain a fairly diverse and personalized endeavor, as well.
Some general strategies and best practices to evaluate ROI are as follows:
- Defining the goals of the campaign: Different campaigns have different goals. Some brands wish to increase visibility, while others look for conversions or an increase in revenue. The measurement of all these goals is done in different manners. Visibility can be measured by website visits through affiliate links. A useful tool for this is Google Analytics, which compiles all website analytic variables automatically, among other things. It is also free and thus, a good starting point for small businesses. If the goal is engagement, clicks, likes, shares, comments, etc., will be better parameters for measurement. Instagram has built-in tools to analyze such data for business profiles. However, there are many other services like AspireQ, UpFluence, #paid, etc. that do all the leg-work for you. Finally, if revenue is the end-goal, unique URLs and affiliate links come in handy. Additionally, coupon codes are also a good way to measure how many purchases were generated by the influencer’s promotional content.
- Measuring target audience growth: Evaluating how much the brand’s target audience grew during a campaign is another trick to gauging ROI. For this, many of the services and metrics mentioned above such as Google Analytics, influencer marketing services, click-throughs, engagements, etc., are useful domains to analyze.
- Using third party services and web analytics: As mentioned above, algorithmic tools are a great source of rich web-related data. Some alternatives to Google Analytics are Adobe Analytics, Salesforce, and Tableau.
- Traditional market research: Good old research always goes a long way. To get more detailed insights into ROI or to fill gaps left by third-party services, use customer surveys to get to know things like how customers found out about the brand, where they first heard about it, etc.
- Calculate using a formula: According to Mediakix, the final ROI can be calculated by using a simple formula when all the variables relevant to influencer marketing, most of which are mentioned above, have been accurately accounted for. One only has to divide the total profit earned by the total amount spent and multiply the number by 100. This will give a clear percentage of the growth generated by one influencer.