Smart Influencer Strategy In Times Of Coronavirus
Marketing Leaders: How to get more awareness and sales growth while spending less? The current crisis and deep tech offer a promising solution.
The massive shift in retail because of the coronavirus outbreak has its effects on e-commerce and influencer marketing in particular. While e-commerce sales in some categories are taking a nosedive, others are growing strongly. Think travel vs. food delivery.
At the same time influencer marketing is changing. Just six weeks ago, influencer marketing was slated to become a $9.7 billion business in 2020.[1] Now we are seeing a very mixed picture. Many brands are postponing sponsored posts, freezing budgets and delaying entire product launches. Others are increasing their activity substantially. It is still unclear whether reduced overall demand will lead to a sustainable decline in influencer pricing.
The behavior of influencers is changing as well. Some post less, others more. Virtually all of them post differently. They cannot move freely in their preferred environments, they might have personal issues to deal with, they might develop new preferences regarding the brands they want to represent, or ultimately, some might develop a new style.
Yet most crucial, the majority of professional influencers are dependent on their income. They will want to be in business, undercutting each other, contributing even more to a the decline in market prices that we are seeing today.
Entrepreneurs and brands considering to start influencer marketing or thinking about a smarter way to spend their influencer budget, are right on time. Not only can they get better deals, they can spend their marketing budget on a better selection of influencers driving more awareness and revenue growth.
In this post, let’s look at the latter. How can we efficiently build and maintain an influencer community targeting the right audience? Using an innovative deep tech approach, we will see how advertisers can identify any desired number of ideal influencers — instantly with the flip of a switch.
This approach is possible, no matter how dynamically the environment is changing. Thereby reach and engagement can be tailored to our needs and remain spot on during the rollercoaster ride, we are experiencing during this crisis.
Stepping Stone To Customers
(Skip this paragraph if you already believe in influencer marketing.)
We all know examples of famous direct-to-consumer (DTC) brands that have built their multi-million Euro businesses primarily on the platform. They have become credible competitors to traditional brands.
Daniel Wellington was one of the first brands to fully understand Instagram. It achieved the milestone of 1 million timepieces in annual sales in 2014 after just 5 years in business. This took Rolex 111 years and Tag Heuer 156 years.[2] With this stellar success the Swedish founder Filip Tysander also inspired a whole new category of Instagram watch businesses, a lot of which are now sold in traditional retail. Never has there been more rapid change in the marketplace.
How To Join The Party?
Whether a Nike, Fissler or startup jewelry brand, Instagram is transforming marketing. Most players have understood. Brands and influencers alike. Therefore, the time for quick wins is long over. Many major brands were already complaining about the ROI of their instagram activities in the past. Now it looks like corona might be giving them a break on the cost side. But as brands are trying to cut cost anyway, there is still the need for innovation to efficiently generating more business.
Let’s back up a little. An entrepreneur myself, I constantly scout for new opportunities to win an edge in the marketplace. Recently, I have spoken to brands, traditional agencies, influencer management software providers and a “deep tech agency”.
Defining The Objective
Before setting out to build an influencer base, a business will have to define whether it is aiming to achieve awareness or sales. Depending on the goal the ideal influencer profile varies.
“We found that micro- and nano-influencers (300–2,000 followers) were often more credible in their peer group and thus better at driving sales. Star-influencers (more than 350K followers) were primarily helpful in generating awareness.“ — Marius Krueger, Co-founder & COO of DTC fashion startup Swedish Fall [3]
At this points it looks like this remains true throughout the current crisis.
Overall, brands will want to define a number of characteristics great influencers should have. Here are some I have typically encountered:
- Authentic individual: The target group can relate to the influencer, i. e., posts are professional but not overly commercial.
- Quality of reach: Followers are the actual target group of the brand, e. g., in terms of age, gender, interests, region. They are legit people and not bots. They are active.
- Quantity of reach: Each influencer has enough followers to amortize the respective management costs.
- Engagement: The account regularly active.
- Influencer fees: Whatever the influencer is paid (money, discounts or equivalent) matches the budget of the brand.
- Fan: Ideally the influencer is already following and/or posting about the brand.
Typical Ways To Find Influencers
So how are brands trying to find them?
Manually Searching For Influencers
The above criteria are a great starting point. In practice for brands looking themselves, there seems to be a lot of uncertainty about the choice (tools missing) and assessment of specific KPIs. Tools are missing and the state-of-the-art changes rapidly. As a result search criteria are typically too imprecise.
An agency representative told me finding (not signing) a dozen influencers with relevant reach will take one full time employee a full week. This makes manual search on Instagram unattractive/impossible for most if not all brands.
Outsourcing The Search
Whether at a brand or an agency, the tasks are pretty much the same. Traditionally many brands consider influencer marketing as part of the marketing mix. They see this as non-core and outsource it as part of the general marketing setup.
As they work multiple accounts and focus on Instagram, traditional agencies have some learning effects that make them somewhat more efficient in finding influencers, but that’s it. The bigger contribution of traditional agencies comes from them being generally well-skilled in providing creative input and structuring the influencer programs.
Common Practice Today: Influencer Platforms And Databases
With the manual search being ruled out for most cases, brands and agencies alike are mainly relying on influencer databases and platforms to look for matching influencers. This comes with a number of issues:
- Influencers are already in business and thus potentially aware of their worth and the lack of options for a brand. Both drives the price.
- Influencers are focused on earning money instead of being true brand loyalists.
- Influencer pool in databases is large but still limited as so many advertisers are looking. Therefore, influencers will promote numerous brands or churn frequently.
The Exclusive Club
Considering these drawbacks some agencies have set out to manually build their pool of influencers. They will sign a network of influencers like a model agency in the traditional world. The clear advantage is those pre-screened influencers are generally legit and also likely more unique, depending on the level of exclusivity.
However, there is an obvious conflict of interest as the agency has invested into building the pool. It needs to amortize it rather than finding the ideal influencer for each brand. At least over time the agency will usually try to work with the same influencer for several brands. Generally, this model is mostly suitable for a limited number of star-influencers and medium- to heavy-weights.
While this model serves its purpose and has some great benefits especially in addition to the influencer platform model, its limitations are obvious.
The New Deep Tech Approach
In my research, I was pointed to a deep tech agency, a company that has looked at the question from a data and technology perspective. Asking if they can build a technology that identifies all relevant influencers automatically based on certain criteria, like a Google search, they found the answer to be “Yes”. By now, they have built it and won a number of major global brands now already using the technology.
In a specific case for a sports company, they started out with a live dataset of over 27 million instagrammers. This was narrowed down to about 600 highly relevant accounts in key locations of several countries. Guess how long it took? We are talking hours not days or weeks! This opens up a whole new set of marketing ploys, allowing brands to react on new trends with hired influencers much more rapidly.
Let’s have a look at the approach in detail:
Step 1:
A software platform takes hard search criteria and delivers a number of instagrammers that could be potential influencers. Search criteria could be for instance:
- Reach — Is the focus rather on the long-tail or star-influencers or somewhere in between?
- Engagement score — How does the engagement of the influencer compare to the category benchmark?
- Loyalty of the followers — Is the loyalty of the followers real and worth the money?
- Audience analytics — What location, age and other criteria describe the target group?
Looking at Spotify during a demonstration, we found the most authentic followers were already following the brand. @spotifyde had 1,295 accounts following it — with more than 5K followers each. Combined they had a reach of 29,789,549 people.
Step 2:
Based on the typically massive search results the deep tech agency applies a prototype of an AI to automatically select those that have actual quality posts based on a a number of soft criteria. This is not trivial as it is basically replacing the human effort of evaluating each profile. Criteria could be for example:
- Brand affinity — To what degree has the influencer engaged with the brand in the past?
- Content/Image quality — Are the post of sufficient quality in terms of visuals, language etc.
- Scenery/topic — Are they posting about the right subjects? Are they possible posting about black-listed topics?
Step 3:
As a result this service can provide brands with virtually a full inventory of all applicable potential influencers — even ranked. Ready to approach and sign. There is also an automation for that part, since many brands will be looking at a huge number of new influencers.
This allows brands to pick the influencers they need, whether large known influencers or less widely popular niche influencers. This long tail of niche influencers taken together is a substantial yet untapped resource.
With this approach a brand can not only select the ideal influencers but also keep track of their changing behavior during this crisis and act accordingly: Whether it is specifically supporting influencers, adding new ones when they reach popularity, or replacing some of them altogether because their fit declines.
My main question would only be if Instagram will allow this sort of technology to work on its customer data forever. Maybe they will offer something similar themself at some point.
Conclusion
Before corona, Instagram influencer marketing had developed from a field where brands could play out their first mover advantage to a level playing field with many strong players. In today’s shifting environment, influencer marketing is under cost pressure. At the same time, it is even more crucial to leap ahead and fight for a piece of the suddenly multiplying e-commerce market.
Deep tech algorithms allow for new approaches to provide brands with a clear competitive advantage in terms of reach, speed and cost. Employing these new approaches makes all influencers — especially the previously untapped long tail — readily available for promotional activities. This is the game changer in influencer marketing — at the right time.
Thank you for reading! And stay tuned for another post on further aspects of successful influencer strategies.
Thanks to all the people who spoke to me lately and shared their knowledge and insights.
If you are an expert in one of these fields as well, and would like to critique or endorse the article or some of its parts, please get in touch or leave a comment with your thoughts and suggestions. I would be happy to discuss, learn and share.
Below are some of the published references that went into writing this post. In addition I have spoken to a number of business decision makers at brands, agencies and software providers. Service providers are not named, because this is not meant to be advertise or endorse.
[1] https://influencermarketinghub.com/influencer-marketing-benchmark-report-2020/
[2] https://pmyb.co.uk/daniel-wellington-turned-15000-220-million-within-4-years-influencers/
