The word ‘influencer’ sometimes brings to mind the image of a model laying on the beach holding some kind of weight supplement — but that isn’t always the case. Influencers can range from ambassadors to content creators, to those with knowledge on a niche subject.

It’s a cost effective way for brands to create content, tap into audiences, and build authentic relationships. However, entrusting your brand to an influencer also has its risks and today’s marketers are under increasing pressure to account for every dollar they spend.

According to Gartner’s Insight Report: Influencer Engagement, “despite the risk of controversy with inherently personal influencer marketing, brands still find benefit from increased media mentions, site visits and sales”.

“The disintermediation that influencers provide between consumers and brands results in more buyer interest and media reach,” the report states.

That enthusiasm is reflected in spending trends. Over a third of brands intend on increasing their budgets throughout the rest of 2018, according to The State of Influencer Marketing, Linqia 2018.

Experts Which-50 spoke to are bullish on the role of influencers, but cautioned that marketers need to do their homework to avoid the most obvious pitfalls.

Influencers: hot or not?

Fashion retailers have capitalised on the opportunity of influencers. For example, Australian companies St Frock and Showpo use young women with large followings on Instagram to showcase their products.

St Frock, which began life as a stall at Bondi markets before moving online, uses influencers in all aspects of its marketing content — from Instagram and Facebook through to site banners and emails.

“We find it’s a really effective way to create beautiful content that we may not have budget or time to curate in-house, such as an aspirational shot of a maxi dress on the beach in Hawaii, or a playsuit shot in a street in Europe,” Sandradee Makejev, founder and Director of St Frock, told Which-50.

The brand works with a variety of different influencers — across all sizes, nationalities and ages — to tap into new audiences or to reach specific segments to promote niche product categories like maternity wear.

“Because of the authentic nature of this creative, we find it’s a really effective way to build brand personality and street credit. Influencers are also a great way to diversify your brand, and reach diverse audiences.”

Showpo CMO Mark Baartse

Mark Baartse, CMO at online fashion store Showpo, said the brand has an active influencer program which has been a big part of the company’s success.

He said “influencers have a reach we don’t have. It’s a great way for us to reach new customers. Also, when you work with an influencer, you are really working with their aesthetic and vibe, which is a great thing. It is much more authentic to leverage their style rather than impose your style on them. Their style is what made them popular.”

The key is identifying influencers that are relevant to the business. “Finding girls with the right style, with followings in the right geography, and with a primarily female audience.”

Beware the hype

Influencers are a popular way to market a brand or product, but the most important lesson Makejev has learnt is not to get too caught up in the hype surrounding an influencer.

“Each and every brand is different, and the ‘it’ list of Instagram influencers does not work for everyone,” she said.

“Rather than investing in the biggest names in the industry — who can charge up to $5000 per post — it’s worth taking the time to research and test less well-known influencers who can actually attract higher ROIs.”

She also recommended asking for a trial rate as “a low-risk way to test an influencer’s affinity with your brand before backing the winners.”

“We’ve also learnt that building relationships with these influencers is essential. The more familiar they are with us, the more on-brand and effective the content. Providing regular work can also afford you the ability to negotiate rates.”

Once St Frock has identified an influencer it wants to work with, it checks their number of followers and their average engagement rate.

“If these don’t look right, or they don’t match, we often steer clear. For example, if they have 50,000 followers, but average 70 likes a post and no comments, there’s something not right,” Makejev said.

The industry has grown wary of influencers and their “true followerships”.

Lewis Shields of Touch Creative, who has lead influencer campaigns for Toyota, Corona and Gumtree, says there is an epidemic in the industry with people buying audiences in order to make themselves more commercially relevant.

“We often get influencers looking for work, pitching to work with some of our clients. Some have 40,000 followers on Instagram, but might only have 100 likes on their posts — that is a real discrepancy in our eyes,” he said.

Shields explained the normal reach is ten per cent of followers. So if they have 100 likes and comments with 40,000 followers that’s a clear sign of disengagement.

He noted that social media sites are cracking down on this type of influencer fraud. “I know Instagram, Facebook and Twitter are doing massive amounts of work to get rid of these fake numbers — they are really taking a hard line on that.

The times it has fallen down, and the times we faced pitfalls, are when brands engaged with influencers en masse with subjective and unclear briefs and really let them fly by themselves.”  

Tim Sharp, regional strategy lead for digital advertising agency APD, is also a believer in the potential of influencer marketing, but said there are “structural issues” that need to overcome to increase transparency.

“I think that there is a bit of a bubble around the influencer marketing world that is ready to pop. It’s all about transparency. There are some amazing stories out there about influencer marketing, but there’s also a lot of fraud,” Sharp said while speaking at an event hosted by Hootsuite recently.  

The issues around fake followers or brands not disclosing sponsorship are damaging the industry, he said.

“Transparency builds trust. Whether that’s brands making sure the partnership is disclosed as a paid post or if it’s the influencer understanding their metrics and reporting those,” he said.

The risks of influencers

Sometimes an influencer collaboration goes awry. A prime example would be the legal situation going down at the moment between Snapchat’s PR agency, PR Consulting, and 20-year-old Instagram influencer Luka Sabbat.

Snapchat Spectacles

According to TechCrunch, PRC paid Sabbat $45,000 to wear the company’s latest Snapchat Spectacles four times on his Instagram.

Reportedly, he missed two of the stories, one of the swipe-ups, the photoshoots, the pre-approvals and analytics. From this, the agency is suing Sabbat — asking for its $45,000 back and another $45,000 in damages.

This highlights an issue between agencies and influencers where prorated payment terms need to be the default payment in a contract — so if the influencer doesn’t fulfil their duties the client doesn’t suffer.

Brand safety is also a major concern, according to founder of Colloquial Australia and advertising and digital media lecturer Zeina Khodr.

She cited the Girls Make Your Move campaign where the federal government spent $600,000 on influencers who aren’t athletes but glorified models that could trigger some younger women to feel bad about their bodies.

Another area of concern is alcohol brands breaching ad standards with Instagram influencer targeting adults under 25.

Despite the pitfalls, Nichole Provatas, Head of Digital and Social at WE Buchan, says influencers are “absolutely worth investing in” — just make sure you do your homework first.  

“Yes they’re worth investing in but not if you don’t do it the right way. And it can backfire significantly — if it’s not worth your money, it can go the opposite direction,” she said.

“There have been a lot of cases this year that have played out in courts that reiterated the importance of not just doing your research of finding the right partner but asking the right questions to inform your strategy.”

Provatas argues that marketers should apply the same level of rigour to developing an influencer campaign as they would developing a marketing channel strategy, including knowing who you are trying to reach and doing the due diligence to find the right partner whose brand values align with yours.

Measuring influence and trusting the data

Shields recommends letting data guide your decision making when hiring an influencer.

He warned against “not looking into their background, not making sure there is a clear line of the brand, engaging people either because in a commercial sense rather than brand sense or being led by intuition and personal subjectivity rather being led by data, evidence, their kind of past performance to deliver against brand campaigns.”

Shields said it is not about an influencer’s reach, their content and their following, it’s about looking at who they’re reaching and how they can influence them.

“At the end of the day, Influencers are a means to an end. Unless it’s going to change the beliefs or behaviours of your target audience then they are not fulfilling their role,” he said.

Zeina Khodr says influencer marketing has moved considerably from art to more of a science. The content created by influencers must be measurable and tied to a business outcome.

“The ROI will focus on attribution. Ultimately influencers are creating content and content is now more measurable than ever,” she said.

Khodr says clearly define the role for your influencer strategy and influencers and optimise your activity and measurements to those goals.

She says influencer marketing will eventually evolve into part of the broader marketing strategy.  “Influencers will start to have a role in every step of the funnel — from awareness to action and advocacy.”

The golden age of Instagram

Sandradee Makejev believes marketers will continue to increase investment in influencers and they will become a vital part of their digital marketing strategy.

“With Instagram being the window in which people now discover fashion first (no longer magazines), it will be down to marketers to step up their due diligence when working with influencers to ensure the content created will resonate with customers and translate into sales,” she said.

Sandradee Makejev, founder and director St Frock

“With the rise of influencers becoming mini celebrities and turning into brands, they will continue to compete with traditional media, including print and TVCs for dollars.”

Instagram has one billion active people on the platform, and half of those return to the site daily. There are 400 million people daily consuming and producing Instagram stories and one million Australians uploading stories.

There are twenty five million businesses on Instagram. Two hundred million people globally visit a business profile every day, with 80 per cent of users following some sort of business.

Young people aged 13-24 open their Instagram app 55 times a day and spend about 90 seconds on the app, on average.

So from these statistics already, if a business or brand wants to reach a particular audience, Instagram would be one of the platforms to do it on.

Brands can use hashtags to be found by those with similar interests or use a personal hashtag to see what other users are posting about the brand. They can geotag a location showing where their stores are located or where they are posting from.

Mark Baartse said this could be the golden age of an organic Instagram for business.

“Facebook is investing substantial resources into various features such as business profiles, post tags, story shopping tags and providing businesses richer data.

“But unlike Facebook, businesses have free organic reach on Instagram. This will almost certainly change at some point. We may look and see this period as a golden age of organic Instagram for business.”

Distributors vs Creators

Kieley Taylor, Managing Partner, Global Head of Social at GroupM, argues there are two ways to look at influencers: distributors and creators. Each one is on a different growth trajectory.

“Influencers as a distribution point of authenticity on behalf of a brand have already had their moment in the sun. I don’t know there’s that much scale through influencers as distributors of content that we can expect.”

Instagram Business Profile

Examples of ‘distributor content’ include sharing pre-made creative or sending samples to influencers. But their follower counts are only “so-scaled” compared to the mass media channels agencies and advertisers have at their disposal to buy ads against. 

Taylor sees a big opportunity to brief in influencers as content creators, as part of the overall content mix.

“There’s so much untapped opportunity for influencers that are that much more connected into the communities that brands want to gain relevance with and to gain share of mind with and we’re not necessarily using them as content creators,” Taylor said.

“A lot of influencers now prefer to be referred to as creators. I think that’s where there is untapped potential especially from the cost efficiency perspective as well as an ability to be more native in the types of environments.

“When they post to their Instagram stories brands can try to emulate it, but it tends to feel that much more authentic to the person who’s watching the video or the post when it’s done by something who is a native to that platform.”

Zeina Khodr says the way we define and use ‘influencers’ is evolving, and predicts the term ‘influencer’ will slowly die out.

“The focus will be more on using content partners to build better customer journeys and addressable audiences for brands, that weaves its way to smaller groups of people rather than continue to amplify content to the ‘masses’ of audiences on ‘rented-land’ of social channels,” she said.

Provatas notes that platforms like Instagram will also dictate how the market evolves.

“There will be a lot of changes where those platforms essentially make changes to start to regain a bit of control over that influence.”

The industry is largely dependent on the whims of social media giants like Facebook, and whether or not consumers will continue to trust and engage with content via these platforms.

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