Influencer marketing: an effective promotion tool at a high price

Popular video blogger with 48 million subscribers Felix Kjellberg, known on YouTube as PewDiePie, in his video in 2014 mentioned the opportunity to get acquainted with a demo version of a certain game. YouTube selibritis was somewhat disingenuous in its message to fans. In fact, it wasn't about "opportunity" —Warner Bros. paid him and other popular video bloggers tens of thousands of dollars to write and talk about the new game, Shadow of Mordor. Two years later, the Federal Trade Commission launched an investigation into Warner Bros., and it was Kyellberg who offered the company his assistance and protection. In particular, he indicated on his YouTube page that the video had a sponsorship character, and that Warner Bros. was the customer. Separately, Kjellberg noted, that he is not obliged to disclose the details of his relationship with the advertiser, including the amount of compensation. However, in view of the ongoing investigation, he decided to help the company in this way. The history of the collaboration between Kjellberg and Warner Bros. demonstrates the growing popularity of influencer marketing, and the FTC's investigation is connected with an increase in cases of abuse in the relationship between the advertiser, the influencer and his audience. Brands are increasingly using influencer marketing, including as a tool to combat ad blockers. In addition, this is an attempt to reach out to a young audience, which will quickly believe a story from a specific person, an authority for them, than a colorful banner. The exact size of this market is still unknown, but the peak in popularity of the term "influencer marketing" falls in September 2016 according to Google Trends. A 2015 survey of over a hundred marketers showed that nearly 60% of them plan to increase their marketing budgets for “influencers” or opinion leaders. Influencer marketing company Captiv8 estimates that brands on Instagram alone spend $ 255 million a month. Further evidence of the popularity of this type of marketing is Google's decision to acquire FameBit, a marketplace that connects influencers with brands. According to Krishna Subramanian, co-founder of Captiv8, influencer rewards from brands can be as high as six and seven figures. Therefore, finding influencers on Instagram is very important today. A 2015 survey of over a hundred marketers showed that nearly 60% of them plan to increase their marketing budgets for “influencers” or opinion leaders. Influencer marketing company Captiv8 estimates that brands on Instagram alone spend $ 255 million a month. Further evidence of the popularity of this type of marketing is Google's decision to acquire FameBit, a marketplace that connects influencers with brands. According to Krishna Subramanian, co-founder of Captiv8, influencer rewards from brands can be as high as six and seven figures. Therefore, finding influencers on Instagram is very important today. A 2015 survey of over a hundred marketers showed that nearly 60% of them plan to increase their marketing budgets for “influencers” or opinion leaders. Influencer marketing company Captiv8 estimates that brands on Instagram alone spend $ 255 million a month. Further evidence of the popularity of this type of marketing is Google's decision to acquire FameBit, a marketplace that connects influencers with brands. According to Krishna Subramanian, co-founder of Captiv8, influencer rewards from brands can be as high as six and seven figures. Therefore, finding influencers on Instagram is very important today. influencer marketing, estimates that brands on Instagram alone spend $ 255 million a month. Further evidence of the popularity of this type of marketing is Google's decision to acquire FameBit, a marketplace that connects influencers with brands. According to Krishna Subramanian, co-founder of Captiv8, influencer rewards from brands can be as high as six and seven figures. Therefore, finding influencers on Instagram is very important today. influencer marketing, estimates that brands on Instagram alone spend $ 255 million a month. Further evidence of the popularity of this type of marketing is Google's decision to acquire FameBit, a marketplace that connects influencers with brands. According to Krishna Subramanian, co-founder of Captiv8, influencer rewards from brands can be as high as six and seven figures. Therefore, finding influencers on Instagram is very important today. The size of influencer rewards from brands can reach six and seven figures. Therefore, finding influencers on Instagram is very important today. The size of influencer rewards from brands can reach six and seven figures. Therefore, find Instagram influencers is very important today.

But there is also a downside to the coin: marketers have a question whether influencer marketing lends itself to scaling and whether it will be able to maintain its effectiveness with widespread use.

Why influencer marketing is a hot trend

Influencer marketing advocates point to various factors explaining the growth of this market. “If you zoom out, you realize that influencer marketing is very different from traditional advertising,” Subramanian said. “When brands try to attract so-called 'millennials' (young people aged 20-35), they quickly realize that such an audience will not click on banners and go through them to shopping. "Millennials" listen much more to the opinions of their peers, as well as "digital" authorities, but not Hollywood stars. " Victor Ricci, founder of influencer marketing firm TrendPie, which is used by AOL, Unilever and Yahoo, adds: “People interact with their smartphones all the time. and the most direct route to them for advertising is through application interaction. " A Forrester study found that consumers spend 84% of their time on five apps, topped by Facebook. Influencer marketing can also dramatically increase ROI. A 2015 study by Nielsen Catalina found influencer marketing achieved ROI 11 times higher than a standard digital ad campaign. According to another study, this type of marketing generated a return of $ 6.50 on every dollar spent. “People realized that word of mouth was more effective than traditional advertising,” said Jonah Berger, professor at Wharton Business School. “A dollar spent on such a promotion can bring in 10 times more. Therefore, companies think about how how they can more effectively create buzz around their products. " In view of this demand, the prices for sponsored posts are simply going through the roof. A sponsored post on Instagram from Kylie Jenner, for example, can cost up to $ 300K. A tweet from TweetLikeAGirl, a parody account with 1.65 million followers, can cost from $ 30K. Interest in a 3-parody account from brands is due to its popularity from the audience. People subscribe to parody pages for entertainment content and pay more attention to them than celebrity accounts. 65 million followers, can cost from $ 30 thousand. Interest in a 3-parody account from brands is explained by its popularity with the audience. People subscribe to parody pages for entertainment content and pay more attention to them than celebrity accounts. 65 million followers, can cost from $ 30 thousand. Interest in a 3-parody account from brands is explained by its popularity with the audience. People subscribe to parody pages for entertainment content and pay more attention to them than celebrity accounts.

Scaling problems

While influencer marketing ROIs significantly outperform banner performance, banners have an edge over influencer marketing. Their main advantage is scalability. If a marketer wants to amplify their message, they can simply buy more banners. At the same time, influencer marketing is a much more time-consuming process that involves identifying influencers and then negotiating to reach a deal with them. “This type of marketing is definitely difficult to scale,” said Misha Talavera, co-founder of influencer marketing company NeoReach. “I don't think influencer marketing can be fully automated. After all, the human component, which is its basis, also creates certain difficulties. " The effectiveness of influencer marketing is driven by consumer confidence, added Talavera. “Having a level of trust suggests that the authority chooses what he really likes, and the information about it is valuable to his fans,” he said.

Punctures

Attempting to scale influencer marketing sometimes results in marketers spending budgets buying opinions from celebrities with millions of followers, but far from the brand and “ashamed” of their positive recommendations. This is fraught with unpleasant consequences for both the brand and the opinion leader. For example, Scott Disick, a member of the Kardashian clan, was caught in May last year that instead of creating publications, he simply copied and pasted Skinny Tea's recommendations on what to write in a sponsored post. Later last summer, Kylie Jenner came under fire for a laudatory post on Airbnb on Instagram that did not clearly indicate the sponsorship nature of the post. After a series of complaints, she had to change the post. With the proliferation of influencer marketing and increased abuse, the FTC has taken a more aggressive stance and introduced some requirements for sponsored publications. It is no longer enough to just add hashtags to a post (#ad, #sp or #sponsored), especially if they are hidden at the end of the post and are not immediately visible to readers. Brands now need to make it clear to consumers that they are paying celebrities to promote and support their brand.

For example, the FTC fined retailer Lord & Taylor for hiding the fact that it paid 50 Instagram opinion leaders ($ 1,000 each) to advertise dresses. Also, the regulator forced to disclose details of marketing campaigns of influence of Warner Bros. and PewDiePie.

Wider doesn't mean better

By and large, many influencer marketers view the FTC's moves as a clear win, as they aim to clear the market from abuse. At the same time, with absolute transparency, it is likely that influencer marketing will lose its effectiveness if it is used even more actively. After each of the sellers and influencers is tagged with paid posts, there is a risk that consumers will develop an analogue of "banner blindness" for this category of advertising, that is, they will ignore those publications of their idols in which there is a mention of brands. “This strategy is becoming an increasingly common tool and the payout to the stars is getting smaller,” said Derek Rucker, professor at Northwestern University's Kellogg School of Management. "As more and more people do this, there is less opportunity to stand out or even just keep up with the market." From this point of view, expanding the use of influencer marketing may not be very useful for building trust in a brand, and more simply used to influence the audience. It is possible that this has already happened. Analyzing the situation with Disick, Ricci noted that even after the scandal, many people learned about the brand. "Some of Scott Disick's Twitter posts received up to 25,000 retweets, 25,000 likes - just crazy, insane numbers," he said. On the one hand, the brand has gained a large audience reach. On the other hand, such a number of re-posts of frankly "toxic" posts is unlikely to please the company. expanding the use of influencer marketing may not be very useful for building brand trust and more simply used to influence audiences. It is possible that this has already happened. Analyzing the situation with Disick, Ricci noted that even after the scandal, many people learned about the brand. "Some of Scott Disick's Twitter posts received up to 25,000 retweets, 25,000 likes - just crazy, insane numbers," he said. On the one hand, the brand has gained a large audience reach. On the other hand, such a number of re-posts of frankly "toxic" posts is unlikely to please the company. expanding the use of influencer marketing may not be very useful for building brand trust and more simply used to influence audiences. It is possible that this has already happened. Analyzing the situation with Disick, Ricci noted that even after the scandal, many people learned about the brand. "Some of Scott Disick's Twitter posts received up to 25,000 retweets, 25,000 likes - just crazy, insane numbers," he said. On the one hand, the brand has gained a large audience reach. On the other hand, such a number of re-posts of frankly "toxic" posts is unlikely to please the company. that even after the scandal, many people found out about the brand. "Some of Scott Disick's Twitter posts received up to 25,000 retweets, 25,000 likes - just crazy, insane numbers," he said. On the one hand, the brand has gained a large audience reach. On the other hand, such a number of re-posts of frankly "toxic" posts is unlikely to please the company. that even after the scandal, many people found out about the brand. "Some of Scott Disick's Twitter posts received up to 25,000 retweets, 25,000 likes - just crazy, insane numbers," he said. On the one hand, the brand has gained a large audience reach. On the other hand, such a number of re-posts of frankly "toxic" posts is unlikely to please the company.