Challenges & Opportunities for Influencer Marketing in 2018
Both marketers and industries far and wide have been wondering whether the Influencer Marketing trend is here to stay – it may seem like an obvious and resounding ‘Yes!’ However, there are some underlying problems with the industry that are worth digging into before we base our answer on gut instinct alone.
The Challenges of the Influencer Industry
Most of the time, influencers with under 100k followers are able to score relationships with brands here and there, but it doesn’t make their gig lucrative enough for ‘digital influencing’ to be their full-time job.
There’s a large initial investment of time required to build a loyal follower base before an influencer can start reaping the rewards of their mini-fandom. It’s harder work than some would think. As these influencers begin to fully realize the amount of time and energy required to build a powerful social following, many begin to drop off and stop investing in their accounts.
As an influencer begins to step away from their account, it directly impacts the health of their community or following. It takes time to build a relationship between the influencer and their audience, and when they are no longer consistent or tending to their following, that relationship in turn falls apart. In order for an influencer to be successful, they have to continually engage their following.
Another thing about the Influencer industry is there is a continuous stream of up and comers. Oftentimes, we’ve found brands can get free coverage from influencers without having to pay a cent. However, this is especially true of brands with a strong and established brand presence.
When Rihanna launched her new cosmetic line, Fenty, beauty influencers were more than happy to purchase and promote the line without ever being approached to do so. In fact, FENTY Beauty received so much buzz it quickly sold out in many locations after the launch. The success of Fenty is a direct result of Rihanna having an established following and personal brand, but secondly, the line was unique in that it offered a stunning area of foundations that catered to POC – something missing from the market.
With a press party invite, brands can get the same amount of coverage they would if they were to pay each one individually. The main challenge for less established brands is that it can be difficult to guarantee that notable influencers will attend – they have the privilege of choosing which invitations they accept. There’s a better chance less notable influencers will happily to attend in hopes of swag.
This creates a bit of a double edged sword between brands and influencers. It can be difficult to get free coverage from high profile influencers for less established brands. On the flip side, less notable influencers are more willing to attend and promote for free as they build, and this makes it challenging for other influencers to cement their place as paid professionals.
Less Interest in Sponsorship
Influencers have begun leveraging alternative revenue avenues. Some have started creating their own goods to sell themselves as opposed to opting into brand sponsorships. This trend could create challenges for brands attempting to use influencers for marketing purposes. Alternative avenues to create direct revenue of their own may be much more lucrative for influencers than short term project payments or brand sponsorships.
Seen as Low ROI
Influencers have had some strong conversion rates in industries like luxury fashion brands. According to research by MuseFind, in the case of luxury brands “…92 percent of consumers trusted influencers over celebrity endorsements.” However, influencers haven’t proven to be as effective in other industries.
Budgets invested in the influencer community are still limited even in industries with high ROI. In fact, less than 10 percent of marketing budgets are allocated to influencer marketing among 59 percent of luxury brands. Influencers have been used as an exposure tool much like traditional media, which is why a lot of Public Relations companies have placed influencer marketing under their umbrella.
Much like traditional media, you can pay for sponsored content but it will never be as strong as organic earned media.
Opportunities in Influencer Marketing
New Celebrities Everyday
There’s an unlimited number of people hoping for fame on their mediums. This means the industry won’t be going away anytime soon, even withstanding the high turnover of celebrity influencers. Simply put, people get bored and are constantly seeking new accounts to follow.
In order to keep up with the onslaught of new and changing influencers, brands who benefit from influencer marketing should develop a standardized process that can work with any which influencer as time goes on.
In addition to high turnover, each social medium produces its own celebrities. Each influencer having leveraged their medium to garner a mass following who buys into their values. As new mediums are created so are new mini-celebrities. Of those many, few will rise to full stardom.
This allows brands to capitalize on some of the rising stars at a more affordable rate – which leads us to our next point.
Can be Affordable
Influencers are an affordable way for brands to engage with audiences more intimately and authentically. While brands can’t control the conversation as much, they can tap into the trusted relationships influencers have with their followers.
You’ll see in some industries – especially beauty and luxury fashion brands – these relationships have resulted in strong conversion rates. In many cases, you’ll now see brands giving full control to the influencers and finding the return to be highly worthwhile. And it’s not only luxury and beauty brands that have reigned in success from this strategy.
Lynda.com, a website offering learning resources for online skills development wanted to find a way to skirt ad blockers. They decided to work with YouTube influencers instead, and while they didn’t have control of the content, they were able to reach an audience of 46 million people through strategic influencer choices such as The Fine Brother, Rooster Teeth and Jacksfilms.
It worked perfectly because the influencers were perfectly aligned to what Lynda.com was offering, which meant the influencer’s audience was poised to gain value from the partnership.
Word Of Mouth
Word-of-mouth is still the number one influencer of purchasing decisions. According to 2017’s Environics Communications CanTrust Index, “74% of Canadians trust recommendations or word-of-mouth (WOM), second to just sampling a product or service (76%).“
Brands willing to co-create with influencers is a massive step. It allows the influencer to maintain trust with their followers while endorsing a brand authentically. Further, this allows brands to tap into an authenticity which is elusive to most marketing avenues beyond word-of-mouth.
More Studies to Prove Value
There are more and more studies coming out proving that influencer campaigns can generate ROI. While it’s been mostly seen in the beauty and fashion industry, it is believed this can spread to other industries too. “Social media campaigns have 11 times higher ROI than traditional forms of digital marketing.”
Yes, influencer marketing is here to stay but the state of the industry’s growth is still a work-in-progress. As this art form becomes an overanalyzed science, we’ll begin to breakdown the most optimal ways for brands to work with influencers of all shapes and sizes to produce the highest ROI.
For now, the organic collaboration is exciting. Brands who are most willing to hand the reigns over to influencers have the opportunity and potential for a surge of revenue.
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