The entire focus of marketing is anchored to the concept of return on investment, of a gain in market or sales in some way. Where influencer marketing differs, of course, is in the ability to engage organically to provide those returns. It also holds a certain unique status in that it’s leveraging the voices of others that can provide long-term returns that are otherwise unattainable with a short-term advertising campaign.
There is a concept I addressed in my previous book, Maximize Your Social: Why pay for social media when it’s free?1 It’s a valid question. The same point can be raised about influencer marketing. Connecting on social media costs nothing. So, the question remains: Why pay?
If we step back and look at influencer marketing as an extension of your social media strategy, then we can understand the context better. When social media first made an impact, some companies experienced social media engagement so intensely that they diverted their company site URLs to their Facebook pages. I would not suggest that companies replace their website with a redirection to a social media site.
There is a large amount you can do with social marketing organically, without paying a cent. Building and developing a community that is interested in your message is a fundamental social media strategy. However, there are times when that’s not enough. There are times when you have a campaign you want to push further, or a demographic you want to connect with more than your community allows. Paid social allows you to boost what you do organically. Where social media is the amplifier to your message, paid social is the accelerator.
Paid social allows you to get where you want faster. Whatever you’re promoting, whatever metric you use to measure success of engagement—whether it’s a sale or building a community or generating clicks on a link, or more people going to the store—with paid social and a bit of money you will get to the result sooner. Paid social has become so important that some companies now separate their social media department into paid and organic, both with different aims, methods, and objectives, to garner the results they’re looking for from both.
Paid social complements organic social. Organic social by itself will only get you so far. However, you can’t only do paid social. There must be some organic presence and, ideally, engagement. If your profile doesn’t replicate your message and your community doesn’t reflect the message and idea shown in your promotions or ads, then you lose credibility. People will go to your profile. If your campaign pushes an image of a large company and they see that you only have 150 followers, then your brand identity and credibility take a hit. At that point the message, and the cost that you’ve invested to promote that message, is all for naught.
When you think of growing your brand and social media presence in terms of growing a crop, the analogy becomes clear. It’s more than just saying that you reap what you sow. When everything is growing steadily, and you’re happy with the rainfall and the results it’s bringing, then you don’t need anything else. That’s organic growth. But sometimes you need something to boost that. You need to add something extra from the fountain. You dip the bucket into the well, or turn on the faucet a little, and let some more water into the crop to help it grow. Paid social is dipping into the well. It’s allowing some more water to flow into the crop to help you get to the next step more quickly than waiting for the rain.
BUILDING PAID SOCIAL
Paid social has become more important in recent years simply because, as mentioned before, the algorithms on social media networks work against businesses. Social media is for people, not businesses. So the reality of the landscape is that social media is pay to play. In terms of older days, consider when being in front of customers meant that companies simply needed to be listed in the phone book. It was free to be listed but making your brand stand out cost a bit more money for a bigger ad or larger type. Paid social is how you can stand out.
There are definitely some networks with much more of an organic engagement level but when looking beyond the immediate present and projecting even for the short-term future, we see that things will change. Brands need to adjust how they communicate their message. Only a few years ago it was easier to spread your message on social media. Now there is much more distrust in advertisements. There are entire demographics turning away from the usual methods brands use to communicate.
The problem with paid social is that when ads become prominent, invading the space of social media users, then the eyeballs you target turn off. Social media platforms change their algorithms to change the way users interact with ads. When scrolling through feeds it’s easy to spot an ad. There is a format to them. They stand out. They might be rare to start with, or novel in their design, but they quickly become more prevalent and water down the effectiveness.
Influencer marketing engagement supports both organic social and paid social. It’s the third prong of the social media strategy. A survey by Relatable showed that 94 percent of marketers found influencer marketing to be an effective form of marketing.2 Furthermore, eight out of ten brands will have a dedicated budget for influencer marketing in the next year. Influencer marketing is quickly evolving from a subset of a campaign budget for having its own integral line item in the marketing budget of a growing number of brands.
AGENCIES OR GOING IT ALONE
Now that you’re committed to influencer marketing, you need to take a look in-house and decide if you are going to invest internal resources or hire an agency to develop relationships with influencers.
Agencies are often looked to as the middlemen when dealing with influencers. This can be a useful approach, but is largely a replication of the traditional celebrity endorsement model. Engaging with influencers is fundamentally different and you may find a varied approach works better. It’s a long-term commitment with a long-term view on benefits. There are platforms that make working with influencers easy (which will be covered in depth later). Agencies can be a helpful intermediary between a brand and an influencer where there is confusion and can be leveraged for their experience. For those companies new to influencer marketing, who lack the internal resources to properly follow the guidance in this book, or who simply haven’t seen good results from their influencer program, working with an agency with a strong track record of influencer collaborations is the quickest way to effectively work with influencers while driving business results.
Agencies can play an important role in your influencer marketing program only if they have a deep understanding of your brand culture, target market, and specific requirements your brand might have for influencer engagement. The current data suggest that nearly a quarter of businesses are still engaging with influencers through agencies.3
A client of mine who was a business author worked with an agency to manage his social media marketing. The agency began pushing influencer marketing. This could open up a new range of ways the author could share his message. However, the influencers the agency suggested, and with whom they already had relationships, were action sports athletes and millennial celebrities who didn’t fit with the business author’s demographic. These influencers definitely had a grasp of social media and their audience, but they did not have the audience the business author shared or wanted to reach. For this reason, they were irrelevant from the very start. It would be analogous to advertising for a business book on a billboard at a skate park. The billboard would be ideal for some shoe brands or lifestyle brands, but not for a business author.
This is an example of an agency pushing talent as influencers, or the other way around. While there is a lot of money to be made in influencer marketing, missteps like this can cost more than they will benefit.
Another often held misconception is that you have to pay a lot of money when working with influencers. Stories about leading Instagram influencers and the figures they pull in for each post further this myth. There are certainly people making a substantial amount of money, and brands paying it, but you’re not required to pay in order to work with influencers. Agencies, brands, and influencers might work together for a short-term one-night stand but this is a trend that is changing. Brands and influencers alike recognize the value of building and developing long-term relationships. A study published by Activate showed that nearly 50 percent of marketers are working with influencers for six months or longer.3 The more investment you put into organically building relationships and hopefully turning influencers into advocates, the more benefits you will reap later. You will already have the relationships to draw on when you need to return to the fountain.
Buying influence is traditionally more of a B2C approach stemming from the celebrity endorsement model. The audience can identify an ad and recognize its transactional nature. The bought influence is often one-time or short-term. Building is often linked more to the B2B brands and products, stemming from working with ecosystem and distributor partners. In recent years we have been seeing a convergence where both sectors are realizing the benefits of blending both for their influencer program.
By engaging with influencers in an organic way, approaching them as people, and building relationships, the returns have the potential to be long-term. You convert influencers to advocates, going beyond the campaign you have in front of you. The influencer becomes a partner. This is a win/win situation and yields the highest return on investment. When it’s a one-time transaction, everything you’ve taught someone about your brand, all the work you’ve done to find affinity and alignment, is gone with one swing of the bat. Working longer with an influencer brings other benefits, such as learning and tapping into what they know about their community—and in some cases their expertise in fields you want to reach—along with the community’s needs from your brand and product. The investment here is mostly time. One report showed that at one time 69 percent of companies hadn’t paid influencers.4 Today influencers are more numerous and the industry mainstream, so your experience might differ. This figure does hint at the potentially many benefits to be had outside of a monetary transaction, including the increasingly popular product gifting to micro- and nano-influencers.
Marketing plans for companies engaging with influencers outline different line items. They list organic social and paid social. For influencer marketing, it’s not about a campaign. Instead, it’s about building a pool of influencers you can work with and return to when you need. It’s a two-sided coin giving you options. Investing money for the initial transaction, using some ad spend for paid influencer marketing with a view toward establishing long-term relationships, allows you toward connect with influencers and keep water in the well for when you need it. Each influencer wants something different, and the approach will vary. But approaching them individually, as time-consuming as it can be, leads to a return that can surprise you.
CORA
ENLISTING THE HELP OF INFLUENCERS DOESN’T always have to cost money. What can you give to an influencer that’s not monetary? Why would they work with you while being unpaid?
Smaller influencers, those with fewer than 10,000 followers, often come with a more dedicated following than those with a large following. The engagement is stronger, and at a lower cost. There are ways you can leverage their voice for no monetary transaction, by engaging them with something they can give their community.
Cora sells a monthly subscription to organic tampons. The brand decided to enlist the services of micro-influencers. Cora sent each chosen micro-influencer their product and requested that they include the product in their posts.5 Taking engaging pictures of tampons might be a challenge, but when an influencer is visually literate and able to work it in with their lifestyle pictures, the content is seamless.
The posts engaged with the influencer’s followers, sparking conversation and more referrals to the brand’s subscription services. The posts for Cora were unpaid: The only price for the brand was gifting and shipping product.
THE FACTORS AFFECTING INFLUENCER SPEND
Despite all the discussion about influencer marketing requiring a different approach, and having a different mind-set when looking at costs, the answer still comes down to figures. In order to have a guide, I’ll present two approaches that I’ve found marketers take when considering the cost of influencer marketing programs.
To pay for your influencer marketing program you will have to take money from somewhere. Fitting it into your already existing social media marketing budget or your broader marketing budget only requires a reallocation of funds. It doesn’t need a new budget to be created from scratch. This is another example of how influencer marketing complements everything but replaces nothing. Until there is a visible ROI on this spend, brands naturally have their doubts about increasing the budget. For more aggressive companies, or perhaps for younger startups who have seen the ROI early on, it’s not uncommon to spend over 20 percent of the marketing budget on influencer programs.
According to an Influencer Marketing Hub report, only 19 percent of marketers interviewed spent 10 percent or less of their marketing budget on influencers.6 The survey showed that a majority of marketers were spending over 20 percent of the marketing budget on influencers. In fact, 11 percent of marketers were already allocating more than 40 percent of their marketing budget to influencer marketing. Use these figures as a guide. It’s a barometer to measure and show how your spend and marketing budget line up with others doing the same work.
A separate study by Mediakix that looked at the specific figure spent instead of spending as a percentage indicated that about half of budgets for influencer marketing fall under $50,000.7 In fact, 34 percent of influencer marketing budgets fell under $10,000. These figures, however, don’t necessarily take into account the gifted product given nor personnel and agency expense to manage influencer relationships.
With the spend as a part of the budget, there are other factors to consider when negotiating influencer rates (see Figure 9.1). Just as each influencer requires a level of individual connection, the way in which they are paid and what they are worth paying for your return varies with each case. There are certain points to consider for all of them.
The size and engagement of their audience is the first point that catches your attention. As mentioned earlier, a larger audience is not necessarily the best indicator. Influencers with a large following tend to have lower engagement. This is important to consider when negotiating the fee.
The level of products and experiences gifted also work into the transaction. If your brand is organizing a conference and covering the accommodations and travel of the influencer, then there would be an expectation that the fee would be altered accordingly.
Figure 9.1
The usage rights to their material, which give you permission to use their images or videos in your own marketing content at a later date, also factors into the agreement. The content an influencer creates is legally their work, and it’s entirely understandable that you would want to be able to use their content in your brand’s social publishing.
The issue of exclusivity also comes into the conversation. If you require the influencer to not work with competitors or other brands in your market, and to take on your brand exclusively, then this is another element to consider. This might also work the other way, ensuring the influencer has exclusivity on content related to your brand to help them to continue building their relationships.
The length of partnership is the final element commonly listed. A longer term relationship lowers the initial fee with the understanding that the work will continue for monthly posts, or other conditions related to time commitment.
The factors taken into consideration when negotiating how much to pay can also be affected by the way in which you pay. There are other parts of the transaction that an influencer might be interested in and would suit your brand. The two most common—reported at 60 percent and 47 percent, respectively, by “a recent ACTIVATE State of Influencer Marketing” report—are a flat fee, and product in kind.8 When asking an influencer to share your product on social media if they like it, it’s common to give away samples or free memberships, and it’s quite often a mixture of these. Post per engagement or click are a much less common way to pay but can be used as a way to measure results at the same time. The same can be said for affiliate marketing, essentially making the influencer your brand advocate. These models are also often presented in the negotiation as a mixture.
The standard rule of thumb that emerged as a guideline is that the cost of an influencer on Instagram is 1 percent of their followers.9 For 10,000 followers, it costs $100 per post. For an influencer with 1,000 followers, the guide is $10 per post, and so on. This is a guide that has been around for a few years and is holding true even now, although of course it’s subject to the factors mentioned above. Tools have emerged to guide marketers into how much to spend in engaging with influencers on Instagram from Influencer Marketing Hub and HypeAuditor.10
YouTube influencers tend to charge more, double that per follower. However many brands and agencies engaging with YouTube influencers prefer to measure by video views, and by this scale the price rate drops significantly. For influencers over certain levels of followers, the price can jump. This tends to happen when an influencer reaches over 100,000 followers, and again at 1 million followers. I certainly stress the importance of researching the rate of engagement for influencers with followers in this range. These figures are a guide, and for some influencers who have a larger rate of engagement and awareness among their followers, it’s entirely plausible that they charge a higher rate. On the other hand, you might be able to negotiate with micro-influencers for an even lower rate. It’s going to be a case-by-case scenario, but just like understanding the going market rates in any economy, the more you engage and build a track record, the better your understanding will be for market rates.
The medium of the message is another key factor to consider. What platform is the influencer on? Perhaps they’re across several and can engage their followers in multiple ways. Blog posts can range from under $50 to a few thousand dollars, depending on factors considering content, followers, and readership. Twitter posts can have the same range. Some Instagram influencers regularly receive several thousand dollars for a post. The type of content or the message also affects the price, and this one boils down to the usual marketing factors of demand. Travel, lifestyle, and fitness are big forums for influencers, and the big topics that draw many followers.11 Business bloggers or influencers who are heavily B2B have a much lower pool to publish to, meaning their fee drops accordingly.
GOOD GREENS BARS
ALTHOUGH SOCIAL MEDIA AND THE INTERNET allow brands to connect around the world, there is a definite advantage in remaining local. How can you use local demographics to push the reach of your brand? What potential do local influencers present?
Cleveland-based health food company Good Greens Bars looked locally first when promoting their protein bars.12 Good Greens Bars mapped the Cleveland blogging landscape to see who the big voices were on the scene. They then approached the bloggers they identified and asked if they’d be interested in writing about their line of protein bars. Good Greens Bars looked to create longer term relationships from the very start and engaged the bloggers with that in mind.
Over thirty local bloggers worked with Good Greens Bars, guest blogging and otherwise promoting the product, in hopes of increasing the strength of Good Greens Bars’ SEO and other online presence. The Alexa ranking increased to 1.7 million and the site increased to over 2,000 visitors a month, rising from a Google page rank of PR0 to PR3. Insights show that much of the traffic is local, coming from blog referrals. The four months following the campaign showed an increase in sales of 50 percent compared to the four months leading up to the campaign.
Engaging the local community in this hyper-local way helped Good Greens Bars hone in on a geographical demographic. This approach allowed the brand to spread their message in a strong and authentic way, highlighting their local origins, which delivered the return the brand was looking for beyond sales.
BEYOND THE TRANSACTION
When reaching out to influencers with whom you do not have a relationship, the transaction might be completely about a paid element. Establishing relationships can bring down the cost in monetary value because other things are being bartered in the deal. When we consider that we turn to paid social, and to influencer marketing by extension, when we need to augment other marketing, establishing relationships makes good business sense, on different levels.
For influencers, monetizing their following is certainly a major motivating factor, but the opportunity to connect with brands presents more possibilities than that. In fact, many new platforms for influencers have taken the monetary element out of the deal entirely and only offer product in kind as the incentive for working with brands. This concept of what, other than money, can you bring to the table is certainly something to consider when engaging with influencers. When looking to fill short-term goals, money might be the strongest incentive but when you have long-term goals then you and the influencer can create mutually beneficial relationships with an advocacy end-goal.
Identifying the right influencer(s) to work with is an art that will be covered in chapter 11. The essential thing you look for is an alignment between your brand values and beliefs and those of the influencer’s content and community. This way you ensure you and the influencer want similar things. If the influencers you’ve chosen to work with get the most engagement when talking to their audience about your product, then you know you’ve chosen the right ones. This alignment, coupled with trust, leads to the best long-term return for your investment. Keeping these three points in mind—long-term goals, mutually beneficial relationship, and alignment of values and beliefs of brand with influencer content and audience—leads to a greater return over time. This is the same line of thinking as organic social. If you can achieve all your goals with organic social and don’t have to rely on paid social, then that’s an ideal situation. It means you’ve done organic extremely well. The same is true with influencer marketing. When an organic connection is made with the community, then the relationships blossom with less input from you.
Trust comes from building relationships, not from a one-time transaction. You strive to build trust as a brand with your customers, and this is done through multiple levels of engagement and multiple points of contact. This happens over time. The same is true with building relationships with influencers. The trust you want to build with your brand begins with the relationship you build with influencers. This is a point that I can’t understate. Trust between you and the influencer leads to trust in the relationship, which snowballs into trust with the audience you’re targeting.
The first step toward this is engaging with influencers as people first. Many marketers inadvertently make a fundamental mistake when they engage with influencers the first time by not treating them as people. They reach out to them with a business proposition as the first point of contact. This doesn’t build trust. Instead, it shows that you’re simply treating influencers as an advertising platform. Engaging with their content on a personal level is far more effective and opens the door to a relationship. As an influencer, I’ve had brands reach out to me offering clothing, stationery, or accessories as the first point of contact. The offers didn’t engage with me and no further step was made to establish a relationship. The trust was not there to begin with.
You can’t approach influencers as a platform like an advertising billboard or an ad spot. Someone who treats their audience as a platform is probably not going to be an effective vehicle to communicate your message. The engagement rate will be significantly lower than someone who holds more trust and has a better relationship with their audience. This, after all, is what you’re looking for in an influencer and so it makes sense to take this into your own approach to connecting with the first point of contact. (This will be covered in much more depth in a later chapter.) What is important to understand here is that trust and relationships are both built over time. When you have established trust and a solid relationship with an influencer, there are added benefits over time. Perhaps they’ll go above and beyond to promote your message because they have affinity for you. We enjoy working with people who trust us and understand our position. Influencers feel the same way.
So, the question of whether to buy or to build comes down to the fact that it’s not one or the other. The truth is that depending on the scale of your program you might end up having to do both. The essential foundation of the entire enterprise is that the more you build the less you will need to buy over time—but buying opens doors and situations. Buying helps you build, allowing your crop to thrive while giving you something to draw upon when you go to the well, when you need to boost the organic growth.
Judging when to revisit the well, and how to measure your returns is another often misunderstood element of influencer marketing. It’s understandable that everyone involved wants to comprehend the return on the budget. Understanding what’s possible, and what counts as a return, is essential to knowing what progress you’ve made. That’s why it’s important to have a dedicated marketing strategy where you plot your own ROI before you even start.
EVEN THE SMALLEST OF BUSINESSES CAN LEVERAGE INFLUENCERS
THE POTENTIAL COSTS OF INFLUENCER MARKETING can sometimes scare away small businesses with limited budgets. Although engaging with influencers as a form of relationship development takes time, how can a small business engage with influencers for little or no money?
Revisiting the chapter on the different ways to collaborate with influencers, there are many paths for engaging with influencers for little or no spend:
1. Gifting Product—Optional combination with Giveaway or Sweepstakes. This will cost you the price of your product and potential shipping, but if you can find the right nano- or micro-influencer to post about it, this is a very cost-efficient form of influencer marketing.
2. Affiliate Marketing—Optional combination with Promotion Codes and Discounts. A completely cost-free way of working with influencers on a revenue-split basis. Not every influencer does affiliate marketing, but if you can offer a generous cut of your sales to the right influencer, you can see a direct impact on your sales.
3. Content Curation—The easiest way to begin a relationship through sending a powerful social signal while fulfilling the never-ending need to publish authentic content through your social channels at no cost.
4. Content Co-Creation—Asking an influencer for their opinion on a subject that you will later publish as a blog post or in a video is another free method of influencer collaboration.
5. Sponsored Content Distribution—While it will cost money to ask bloggers and social media users to publish your content on their website and feeds, working with the right targeted nano- and micro-influencers can bring this engagement below $100 per collaboration. Obviously, for those influential bloggers who accept guest posts, there is the potential that this could be free as well.
6. Event Coverage—If you’re already doing an event, inviting targeted influencers who live locally, thus not requiring travel expense reimbursement, is an easy way to build influencer relationships in person that can lead to greater collaboration. There is also the option of creating an event with the objective of developing relationships with a selected group of influencers. New event creation and travel fees reimbursement for non-local influencers are the only potential costs your small business will have to incur.