“Is Influencer Marketing worth the investment?

Influencer marketing is a method of digital marketing that has become popular in the last
decade. Social Media influencers are independent promoters who use social media platforms
like Instagram, YouTube, Snapchat etc. to promote commercial products. Influencers use
various modes like blogs, posts, videos to promote products (Fredberg, 2010). Influencer
marketing has generated opportunities for brands to directly connect with customers and
opened up channels for more focused and customized advertisements (10 Reasons Why
Influencer Marketing is the Next Big Thing, 2015). In contrast to traditional methods of
marketing, influencer marketing can help customers to better relate with a product. Further,
the digital form of marketing also gives companies the ability to track impacts of a marketing
campaign. Metrices like number of views/shares, total number of posts within and outside the
influencers’ circle etc. can be used to measure customer engagement and popularity of the
campaign. Knowing the effectiveness of a campaign can act as a feedback to companies,
something which has been a challenge in traditional methods of marketing. In this article we
discuss the key aspects that make influencer marketing effective. We would also discuss
some of the challenges faced by this new age method of marketing and possible ways in
which corporates can overcome these challenges.

To have an understanding of why influencer marketing is becoming so important,

organizations need to understand the pivotal role the right influencers play in creating a trust
in the brand. Matthew’s “The definite guide to influencer targeting” states that
recommendations that involve a third party are more trustworthy to followers (Matthews,
2013), than a brand advocating itself. Study by Hall shows that the trust that exists amongst
an influencer and his target audience is impossible to replicate by brands alone (Hall, 2016).
A research by TapInfluence and Influitive (TapInfluence & Influitive.) shows that
recommendations from a personal network has 90% trust rate, and 81% of these referrals are
online. A survey by Tomoson Company in 2016 shows earnings of 6.5 dollar for each dollar
spent on influencer marketing (Tomson, 2016). The survey also indicates that 59%
companies have increased their budget allocation for 2017 (Figure 1). Further, 22% people
voted influencer marketing to be the fastest growing mode of customer acquisition (Figure 2).
There has been a shift towards earned media owing to the increasing influence of ad blocking
and fraud, and thus paradigms that involve trusted individuals who can endorse a brand
without being blocked, are gaining emphasis in the marketing world.

Figure 1: Adapted from (Tomson, 2016)

Figure 2: Adapted from (Tomson, 2016)

Having established the promise and trends in influencer marketing principle, we must
examine the issues that the industry faces. Most instrumental decision point is to find the
appropriate influencers for a brand. Making this decision requires finding an intersection
between the influencer’s followers and the target audience for the brand. The criteria of
choosing influencers involves asking questions like: can the influencer affect buying
decisions for the specific product, or, can the influencer penetrate the niche the company is
trying to target.

In the Influence Marketing book by Brown and Fiorella (Brown & Fiorella, 2013), two
approaches of Influencer Marketing have been discussed. The first one is the Fisherman’s
Influence Marketing Model, wherein the influencer is at the centre of the marketing universe,
and the extent of overlap in his/her followership and the target audience determines the
candidature strength of the influencer. But while this approach can capture large audiences
for influencers with massive followings, the intersection with the intended audience might
still be poor. Thus, a better approach is to make the customer the centre of the universe, since
they are the ones making the purchasing decisions. The circles of influence of targeted
customers spans the followership of many influencers, and an analysis of these influencers
can help us choose the ambassadors advocating our brand. The chosen influencers must take
care to share relevant content, encourage engagement of their audience with the shared
messages, reach wider audiences and share less sponsored content to seem trustworthy.

The other important concern in the industry is to work with chosen influencers to craft
content relevant to the customer. A customer may be at the research, awareness or purchase
stage of the transaction process and the content of influencers must cater to the exact decision
it has to affect and lead the customer to the next stage. Brown and Fiorella discuss the two
stages in the influencer campaign: The Trickle and Ripple phases. Trickle phase is when the
targeted message is given to the influencer, who has to ensure that it reaches the audience
despite the distractions of social media (Brown & Fiorella, 2013). To ensure this, the brands
must work with influencers and answer questions involving implementation of the campaign.
Once the influencer’s audience achieves an intersection with the brand’s message, the content
dissipates through the secondary circles of the customer and a ripple effect is created, moving
the campaign to the Ripple phase. The above analysis is partially motivated from (Biaudet,
2017) .

Influencer marketing promises to have a potential to transform the advertisement industry.

Unlike traditional marketing methods, influencer marketing helps companies design
customised campaigns. Companies can now classify customers based on attributes like
preferences, location, activity on social media etc., helping them identify a set of target
audience. Finding appropriate influencers for the target audience still remains a challenge that
organisations have to overcome. In light of the issues highlighted, the recommendation to the
companies is to be vigilant in choosing the right influencers and analysing the relevance of
their followership for the products of the company. Once the audience is connected, smart
marketing campaigns can take it forward. With the exponentially increasing customer base of
social media platforms, added benefits of influencer marketing and increased focus of
organisation in the digital marketing space, we can expect the “influence” of influencer
marketing to increase in the coming future.
Brief to the audience

The article caters to businesses and marketing teams willing to explore newer methods of
customer segmentation and penetrating audiences which their previous campaigns have failed
to explore. The scope also includes media influencers who want to exploit their reach to
profit organizations and in turn earn considerable money and reputation.

References
10 Reasons Why Influencer Marketing is the Next Big Thing. (2015, july 14). Adwwek. Retrieved from
https://www.adweek.com/digital/10-reasons-why-influencer-marketing-is-the-next-big-
thing/

Biaudet, S. (2017). Influencer Marketing as a Marketing Tool – The Process of Creating an Influencer
Marketing Campaign on Instagram. Helsinki, Finland: Yrkeshögskolan Arcada. Retrieved
from
https://www.theseus.fi/bitstream/handle/10024/134139/Biaudet_Sofie.pdf?sequence=1

Brown, D., & Fiorella, S. (2013). Influence Marketing – How to create, manage, and measure brand
influencers in social media maketing. Que Publishing. Retrieved from:
http://ptgmedia.pearsoncmg.com/images/9780789751041/samplepages/0789751046.pdf

Fredberg, K. (2010). Who are the social media influencers? A study of public perceptions of
personality. Public. Knoxville: Public Relations Review. Retrieved from:
https://www.researchgate.net/publication/251582746_Who_are_the_social_media_influen
cers_A_study_of_public_perceptions_of_personality

Hall, J. (2016, 4 17). The Influencer Marketing Gold Rush Is Coming: Are You Prepared? Retrieved
from: https://www.forbes.com/sites/johnhall/2016/04/17/the-influencer-marketing-gold-
rush-is-coming-are-you-prepared/#766f666734fb

Matthews, K. (2013). The definite guide to influencer targeting. Retrieved from:

https://influencermarketinghub.com/the-definitive-guide-to-influencer-marketing/

TapInfluence & Influitive. (n.d.). Influencers vs. Advocates: What’s the difference? Retrieved from:
https://influitive.com/resources/influencers-vs-advocates-whats-difference/

Tomson. (2016). Influencer marketing study. Retrieved from:

https://www.tomoson.com/blog/influencer-marketing-study/