We’re living in an age of unprecedented change. We experience with Oculus Rift, invest with Acorns, consume video through Hyper, tune into Pandora and navigate with Waze.
Social media and digital interaction have handed brands exponential opportunity to target and interact with individuals in a relevant way. They’ve also opened up a new avenue of third-party content creation and engagement that’s gaining attention – for both the right and wrong reasons.
‘Influencer marketing’, or the art of tapping into well-known and well-read bloggers and consumers within certain communities to promote products, raise brand awareness and drive conversions, is taking off.
Social Media Today recently reported that 74 per cent of global marketers will use influencer marketing as part of their marketing strategy in the next 12 months. And these activities are apparently paying dividends. According to the 2014 Influencer Marketing Benchmarks Report from US digital and media technology company, Burst Media, brands investing in influencer marketing received an average of $6.85 in earned media value for every $1 of paid media.
Plenty of brands are singing the praises of influencer marketing, too. Sony, for example, has put an emphasis on word-of-mouth marketing in recent years and seen triple-digit conversion rates as a result. Champagne brand, Piper-Heidsieck, also turned to social influencers to reposition the brand as an affordable luxury for everyday moments. Through its ‘Piper moments’ exclusive events, and partnerships with Shoes of Prey, and Adrian Zumbo, interactions helped generate more than 6.3 million media impressions. Most importantly, sales rose 25 per cent during the first seven months of fiscal 2014.
But while there’s plenty of momentum, influencer marketing is also courting plenty of controversy. The big issue is disclosure around brands engaging – and often paying – an influencer to become their next brand ambassador.
Add to this a lack of regulation and defined industry best practices, rising numbers of commercially savvy bloggers, and issues with how to measure effectiveness, and you have a growing marketing channel that’s generating a lot of headlines.
What makes an influencer
What makes an ‘influencer’ is the first point that needs clarification. Head of digital at Ogilvy public relations, Craig Page, describes influencers as anyone with an audience.
“They could be a blogger, a YouTube content creator, a well-known person with a significant number of twitter followers, and of course, journalists, analysts or consultants,” he says. “In theory, everyone with a Facebook account and some friends has some level of influence, but we tend to reserve the term ‘influencer’ for those who either have an audience that is very large and relevant to a certain organisation, brand, topic or subject, or very passionate about the influencer and their content.”
More often than not, these individuals are recognised for having clout on certain subjects, from mass interests such as food, fitness, technology or fashion to complex healthcare matters to specific technical areas of education, engineering or aviation.
Co-founder and MD of word-of-mouth agency Contagious, Nick Law, says modern day influencers come in all shapes and sizes, from small-scale peer-to-peer influencers, who may not have the highest social reach but definitively influence the purchasing decisions of those closest to them, right through to the new ‘social media stars’ with 1 million+ followers. On that list are fashion and beauty YouTube vloggers such as Bethany Mota, Zoella and Chloe Morello, along with Snapchat’s Meghan Hughes and Instagram’s Chris Ozer.
“The main reason we’re seeing so much influencer marketing activity right now, and why it’s so important, is because of the shift from one-way, broadcast communication strategies, to a more complex marketing ecosystem where some consumers now have more influence than the brands themselves,” he comments.
Digivizer head of customer engagement, Alan Smith, is in no doubt influencers have changed the rules of public relations, marketing, engagement, information access, paid-for and earned media, relationship development, customer service and customer advocacy for ever.
“Their mere existence has caused friction with established journalists, and continues to do so in some quarters, and some influencers are better at the task, and more credible, than others,” he says.
“Their importance though is assured. They are a direct connection to the consumer, and often are consumers and the general public themselves. And the old rules of trust and authenticity have been sharpened.”
Defining brand influencer campaigns
The key to influencer/brands partnerships is to ensure there is an obvious and implied sense of ‘shared value’, Page says.
“For an influencer to be really ‘influential’, the relationship they have with their communities is based on a genuine, authentic interest in the topics that they talk about,” he says. “When influencers partner with a brand or organisations where they do not share the same values, they invariably produce content that is seen to be disingenuous and can erode not only the relationship with their community, but the brand or organisation itself.”
Contagious takes into consideration the authority of a recommendation, behavioural factors and propensity to influence over specific channels. “Certain brands would be better suited partnering with an aspirational Instagram influencer whereas others might look to recruit a team of mums who are very socially active on Facebook or offline,” Law says.
All agencies agree it’s vital for every brand engaging with influencers to be clear about their objectives.
“Be agnostic about assumptions,” Smith says. “Don’t rely on past experiences or even past contacts: The world today moves much faster than in the past, and is more granular. The right influencers are likely to be someone unfamiliar to you, and you must rely on data to validate your decisions on who you engage with.
“And understanding their networks and areas of interest is essential. You reach out to influencers without understanding them at your peril.”
When influencers partner with a brand or organisations where they do not share the same values, they invariably produce content that is seen to be disingenuous and can erode not only the relationship with their community, but the brand or organisation itself
Brands should allow influencers to create and recommend content ideas, as they know their audience better than anyone, Page says. “Do give influencers the tools they need, such as exclusive content, spokespeople interviews, event invites or anything else, to extend their advocacy beyond the requirements of an obvious partnership agreement.”
It’s also important brands don’t perceive their engagement with influencers as a customer/provider relationship, Page says. “Don’t ask an influencer to run your content for you,” he adds. “And don’t work with anyone who doesn’t like your product, service or mission.”
A big lesson from Switch on Media head of influencer marketing and social media, Heather Tines Tupper, is to avoid falling into the product launch and campaign mentality trap. “You close a lot of doors if you are focused on a single marketing message,” she warns. “Don’t force one message, one product or service – open up that conversation.”
Courting controversy: The potential pitfalls
Identifying objectives is one thing; knowing the rules of commercial engagement is another. Arguably, the biggest issue is the structure around bloggers being paid for comment in cash or product, and the level of transparency existing around these transactions.
Compounding the issue is the lack of specific regulation or industry codes on how influencers disclose sponsorship and payments to their audiences. Agencies say Australia is very relaxed in this area in comparison with the stricter rules being applied in the US and UK/Europe.
In the UK, for instance, videos by YouTube celebrity influencers including Phil Lester and Dan Howell were banned by the Advertising Standards Authority for failing to disclose they had been paid by Mondelez to make videos of its Oreo cookies.
Yet in April, UK apparel retailer, Lord & Taylor, raised eyebrows for an Instagram campaign that saw 50 influencers posing in photographs wearing the same dress and being paid for their services, but not disclosing their relationship with the brand.
Tines Tupper says the relationship between bloggers and brands is now a mix of paid and unpaid engagement. While there are bloggers who will disclose the nature of their relationship with brands transparently, they aren’t under strict obligation to do so – yet.
So does that mean we need regulation? Tines Tupper suggests the more transparent brands and bloggers voluntary become, the better the relationship and the less chance of consumer backlash.
“As long as you include disclaimers, and as long as people are transparent and honest, there shouldn’t be any issues,” she says. “But we may need laws in the long term.”
The onus is on agencies and brands to be honest and open, too. “Don’t just see it as a monetary opportunity,” she says. “Different bloggers will be more strict on who they will and won’t work with, and the number of sponsored posts they ran and their code of ethics.”
For TWO Social's head of digital, Richard Spencer, the first significant decision brands must make when embarking on influencer marketing if it they’re prepared to pay, or not. One client regulated by APRA, for instance, took the view that unless an influencer has physically used its products, they can’t be used as paid spokespeople, he says.
“Some will also ascribe a lot of value to this. We had one fashion blogger that wanted $30,000 for a blog post, which is a chunk of money and equivalent to some traditional mag advertising, but then traditional ROI measurement comes into play, as with any other advertising format,” Spencer says. “The consideration then is whether that fashion blogger is more influential than Vogue.”
What’s adding to the confusion is the view most people have that social engagement is and should remain free, Spencer claims.
“Most organisations have grown up with the notion that social media is free and it isn’t and never has been,” he says. “Because influencer marketing through social and digital channels is likened to public relations, there’s a feeling that these bloggers should be doing it for free as they are getting great content. But someone pays the journalist, not necessarily the blogger. Plenty of influencers do it as they want to, but there are plenty making a living out of it and money needs to be made somewhere.”
As marketers, we should be paying them, Spencer says. “Equally, should we as brands or organisations representing brands be clear about that? Absolutely. There needs to be something akin to a journalist code of ethics – assurance on what is sponsored and paid for. But good influencers are already doing this themselves.
“What they do have is a personal brand that needs protection."
According to Tines Tupper, one ingredient complicating this exchange is the rise of small talent-management agencies representing bloggers.
“This has created a potential barrier to entry and is creating a lot of challenges for new brands particularly, trying to involve bloggers in a program,” she claims. “Often time they’re trying to take a 10-15 per cent cut but not necessarily offering much value.
“Not every opportunity is to do very expensive campaigns together – there is a lot of variation in these relationships. You might miss out on going to an awesome event or experience because you’re not getting paid for anything and the agent doesn’t pass it along.
“Sometimes from a brand point of view, it’s more about awareness… and it may not be a paid experience.”
This could include a not-for-profit initiative or activity, Tines Tupper says. “But if you have a direct relationship, the blogger may still want to be involved.”
Spencer hopes the industry can do without regulation and says the onus is on the blogger to protect their personal integrity by balancing paid and personal opinion. Unlike Tines Tupper, he saw the new blogger agencies being established as a way of helping minimise this risk.
“There will be those less experienced than the brands trying to influence them, which is essentially where these agencies like the Remarkables, who represent bloggers, are coming in – they’re designed to create a better commercial understanding for these people who might not have that commercial background,” he says. “In those cases, I also hope brands will step up and help out, as they also have a reputation to protect.”
Much like any social engagement, there’s also the risk of backlash for brands from consumers if they choose the wrong, or a less-than-scrupulous influencer to work with. In response to a question on whether brands risk more by using influencers than in other marketing techniques and channels, Smith points out there have always been influencers, even before social media, and therefore always been a risk.
“Anyone who worked in mainstream public relations before the social media renaissance will understand that,” he says. “The social Web does two things, though: It expands the reach of the risk, and shortens the timescale for it to ignite - to a matter of minutes in some cases.”
Management of risk comes down to the experience level of the organisation running the influencer program, Smith says. “Risk is further mitigated if the relationship with the influencer is built on trust, engagement and mutual understanding,” he says. “What’s changed is there are now many more influencers, and the consequences can be widespread.”
What’s changed is there are now many more influencers, and the consequences can be widespread
Rather than call for tougher regulation, however, Smith says consumers will ultimately make the decision as to whether an influencer retains their position of influence. “The consumer will define what’s acceptable, and influencers will align themselves accordingly, especially if they seek to make a living that way,” he says.
The other question is whether consumers will continue to accept branded and paid-for blogger content as more marketers invest in this space. Page believes there has been an “early-mover advantage” in the influencer space, which no longer exists in most sectors.
“That said, traditional paid advertising is being challenged as audiences get better at ignoring content that provides no value for them,” he says. “Savvy brands and organisations realise influencers offer a great opportunity to generate branded content that people actually care about, and have an audience on tap to consume it and share it.
“Influencer engagement will remain part of a smart marketer’s toolkit for a while to come.”
Spencer argues consumers don’t mind being sold to as individuals, provided the sales proposition is relevant and contextual and payment or sponsored brand activity is transparent.
“When the messaging is overtly salesy, or there’s too much advertising in it, and is not relevant to me, then it becomes more of a problem,” he says. “But if it fits, and fits neatly, I think the vast majority of consumers won’t have a problem with organisations selling to them. That’s why advertorial and ads have worked for years.
“Where you have great instances of influencer marketing it has been exposed as a paid-for activity.”
But Law agrees a ‘backlash’ could be on the horizon. “This is still a relatively new marketing medium after all. Marketing professionals may well have to hone their ‘influencer marketing skills’ as things develop in order to keep their brand messages relevant and engaging to influencer audiences but we definitely see this playing out in a more collaborative way moving forward,” he says.
“The secret lies in doing it well. I think the issue is that a lot of people are rushing into ‘influencer marketing’ without understanding that there’s a science to it.
“At the end of the day, you can’t escape the fact that we’re all living in a global environment where the consumer’s voice and opinion is heard more, and therefore makes more of an impact than it ever did. Brands should ignore this at their peril.”
Up next: Tips on measuring influencer impact, examples of successful and innovative influencer marketing campaigns in action plus how to identify the right influencer for you