Influencer Marketing ROI
…real or imagined?
By now you have probably heard of “influencer marketing.” If you aren’t familiar with the concept let’s introduce you to it now.
The basic premise is that you can market a product in the traditional sense with advertising and media buys, or you can exploit a less direct but equally effective marketing concept whereby individuals who are respected and popular in a specific product-associated vertical, endorse or acknowledge your product or service.
As an example, if you are launching an athletic shoe company, it would be extremely helpful for your brand if a popular athlete or fitness model posted photos of themselves wearing your shoes on a social media outlet or shared a “link” to your company website or perhaps penned a few nice words on Twitter about your product.
The premise of this influencer marketing as it has come to be known is that influential, well-known celebrities or writers who are associated with a particular product/ brand, may influence their “followers,” or fans to consider purchasing this brands products. It is this same concept that has resulted in product manufacturers paying movie production agencies large fees to prominently display their brands in movies or television shows.
It is this subliminal association or “relationship” between product brands and popular movies, television shows, celebrities, actors, models or athletes that has created the concept of such association being worth a specified value. It is only recently that these association values have been questioned from a results or ROI (Return on Investment) standpoint.
No doubt, influencer marketing can provide an advertiser access to a contained, active audience with third-party validation of a leader or high-profile individual in that space. Research shows that “posts” shared by trusted influencers converted at a higher rate than those posted by the brand itself. Additionally, customers acquired through trusted social influencers recognized a 37% increase in retention rates!
However, influencer marketing has run into some issues recently. There has never been a simple or accurate tracking tool to calculate the hard-data impact of a specific influencer. For that reason, there has been no way for marketers and product manufacturers to assign a real dollar value on what influencer marketing is actually worth….and what it should cost.
In short, how does someone actually gauge the “Return on Investment,” associated with paying for a particular influence marketer? In other words, how can sales data for a product or brand be tied directly to the marketing of that brand or product….as generated by a specific influencer?
As an example, if Usain Bolt (one of the fastest sprinters in the world and a popular iconic personality) tweeted about a new athletic shoe or brand, how does any sales increase for that product get associated directly to his Tweet? How do we know that an increase in the sale of this particular product isn’t tied to any other traditional marketing program the company has implemented?
Is it possible that some other market or environment variable had a positive impact on the marketing of that product? If a 2% bump in sales took place in the 30 days following his Tweet, how much of the 2% was associated with him and what exactly is that worth?
A new company by the name of Snips believes they may have solved this challenge by combining influencers and marketers under a one-roof system that tracks the actual influence of individual influencers and overall campaign performance. They claim to be able to do this from the point of initial engagement through conversion. If they are able to confirm their claims, Snips may be able to stabilize the influencer marketplace and create a more realistic model and payment structure.
However, the bottom line is many marketing and advertising companies believe that unless you are able to actually track individual sales to the cash register once they originate from a specific introduction point, you will never be able to fully assess the effectiveness and value of influencer marketing.
One approach is for an influencer to provide a discount or access code for a product that can be used when ordering on line or purchasing in a “brick & mortar.” By consumers using such a code, the guess work or assumption analytics can be factored out and it becomes obvious how much impact an influencer is actually having.
While the company paying for influencer marketing has endorsed such a concept….the influencer marketplace has not. This point in and of itself may be the most telling statistic regarding the effectiveness of influencer marketing and their actual conversion rates.
Almost all marketing and advertising companies believe that influencer marketing is a positive attribute… most public relations firms will attest to the negative impact of an influencer degrading a product or brand, yet the question remains….just what are marketing influencer efforts worth?