High growth brands are spending more time and resources on their influencer marketing campaigns for one simple reason – it drives results.
In Riding the Tsunami of Change in Consumer Marketing, I talked about what’s causing traditional marketing and advertising to become increasingly less effective and how consumers are embracing the influence economy. Below, we’ll walk through 7 of the reasons why brands are seeing influencer marketing fuel their growth.
New to the Influencer Economy?
Different brands and agencies use slightly different wording, so I always like to level set with what Influencer Marketing means to our team at Sideqik. Influencer marketing is a form of marketing that focuses on identifying, building relationships with, and activating key leaders, partners, and individuals who have reach and relevance to your potential customers.
Who is focused on influencer marketing? According to Forrester, 73% of marketers have budget for influencer marketing. Overall, 59% of marketers at consumer brands say they’re planning to increase their influencer budget in the 12 months. We often see brands get started with a brand ambassador or influencer program and then expand into marketing with other influential marketing partners.
Now, onto why brands are growing with influencer marketing.
# 1 Greater Influence with Potential Customers
Whether you’re working with celebrities and journalists, pro influencers or the lucrative long tail of influencers, those influencers have strong relationships with your potential customers already.
Many brands will initially start their influencer campaigns by seeking out celebrity endorsements. While that can be a good use of ad dollars in the beginning, especially if you have the relationship already, most brands quickly realize what research has shown in almost every consumer vertical. When it comes to community size, 54% of consumers agree that the smaller the community the greater the influence (source: TechnoratiMedia).
McKinsey, Nielsen and others have all found that word-of-mouth recommendations from trusted sources are the primary factor behind 20% to 60% of all purchases decisions. We’ve heard the same things from our customers at Sideqik, with younger demographics being at the upper part of that range.
# 2 Influencers are Social by Nature
Influencers thrive on being social. They’re actively engaging with their friends and people they’re connected with across digital channels.
It’s not just that they’re sharing on social. Many influencers feel that it is their responsibility to tell their followers about their experience with brands. FleishmanHillard and Hearst Magazines found that 73% of millennials feel it is their responsibility to help friends and family make smart purchase decisions.
# 3 Influencers Want to Work with your Brand
Real influencers and brand ambassadors are fans of your brand. They use your products and want to work with brands they like, for many different reasons.
#4 Influencers Let you Magnify your Reach
Each new influencer that you bring onto your campaigns is another audience that you’re able to tap into for growth. Many brands have an existing influencer and brand ambassador list, while others are just starting to build their lists and form those relationships. That’s one area Sideqik helps. Sideqik’s tools to help identify and build relationships with influencers that otherwise would have been impossible or costly to do manually. On average, our customers are able to extend their reach by 50x – 300x what they could reach from their email list alone.
Selling to a younger audience? Millennials have approximately 200 more connections on each social network than members of older generations.
Need help finding your influencers? That’s one of the areas I can help.
#5 More Cost-Effective than Advertising
Without getting into the debate of whether influence should be purchased or earned, I wanted to walk through the value of an individual short campaign with influencers. The calculation also helps when looking at the return on investment (ROI) of influencer marketing.
One of the most common metrics for looking at the value of content is CPM (cost-per-thousand impressions). One of the nice things about CPM is that there are standard CPM benchmarks for TV, print and digital. The table below shows the value of just the brand impressions based on the size of the audience you’re able to reach, assuming a 2.5% engagement rate and a CPM of $5. While many brands are driving KPIs deeper in the purchase decision process, this is good for quick comparison with advertising rates.
We’ve worked with hundreds of brands across different verticals and see engagement rates and the number of posts significantly higher than these. When looking at the cost to set up and run a successful influencer strategy over the year, it’s easy to see why almost 25% of marketers say influencer marketing is their most cost-effective acquisition channel.
|Reach of influencers||Avg Engagement||CPM||# of Posts||Value of single campaign|
#6 Increased Conversions and ROI
A majority of marketers believe that influencer marketing brings in higher quality customers and they see greater revenues from these campaigns. Research shows that offers shared by a trusted influencer or brand ambassador convert at a 4x – 12x higher rate than offers shared by brands.
One consumer electronics company reported a 10x ROI by making it easy for ambassadors to share promotional offers with their friends. They estimate that 50,000 offers will be shared by ambassadors, driving clicks, sign ups, and sales from both their ambassadors and their friends.
#7 Ability to Scale
Successful brands approach influencer marketing as a fundamental strategy within their company. Just as email marketing works best when done consistently by a marketer with expertise in the area, the same is true of influencer marketing.
When trying to scale:
- Manual influencer marketing can work to start a program. However, most brands find themselves using a variety of tools built for other purposes, along with spreadsheets and peoplepower to run their campaigns. If you’re a single person team, this may let you run a few campaigns per year for a boost, but it won’t support growth and predictable results unless you have the budget to allocate substantial headcount.
- It can be difficult to find an agency with a core value proposition around influencer marketing. They do exist though. We have certified a number of incredible agency partners, so let us know if you’re looking for one. If you’re one of those agencies that we haven’t met, let’s talk.
- Use a marketing automation platform specifically designed for influencer marketing. This is the best way to build expertise in-house and scale your programs.
One of the reasons our team gets so excited working with new marketers is that we get to rescue brands from a dependence on legacy and ad-based marketing models. Just as long-tail and marketing automation has revolutionized other marketing channels, we started Sideqik to offer that same disruption to influencer marketing.
These are just a few of the reasons that influencer marketing is quickly becoming one of the most important online marketing channels. Budgets are growing fast, and marketers are seeing short-term and long-term results not matched in other channels. Given the results we’re seeing, expect to hear more soon.
Note: This article was originally published by Sideqik on Sideqik.com after I wrote it. Need a real influencer marketing program, check out their data-driven platform.