Influencer Marketing 101 | What is Influencer Marketing

Influencer marketing is a type of marketing in which brands work with social media influencers or other individuals with a large following and influence on social media platforms. The goal of influencer marketing is to use the reach of these individuals to promote products or services to their followers.

Influencer marketing can be effective because influencers have built a relationship of trust with their followers, and their recommendations can be seen as more credible than traditional advertising. Influencers create content in which they promote a brand or product to their followers through sponsored posts on social media platforms or sponsored content on their own blogs or websites.

Influencer marketing has roots in the entertainment industry, where celebrities have long been used to endorse products and brands. However, the rise of social media platforms like Instagram, TikTok, and YouTube in the early 2010s led to the emergence of a new type of influencer: everyday people with large followings on these platforms. Brands began to realize that these social media influencers could be powerful ambassadors, and influencer marketing as we know it today began to take shape.

In recent years, influencers have become increasingly popular and sophisticated, with some companies dedicating entire departments to managing influencer campaigns. Today, influencer marketing is a multi-billion dollar industry, and it continues to grow as social media use becomes more widespread.

To be effective, influencer marketing campaigns should be carefully planned and executed. Brands should work with influencers who align with their values and target audience, and the content produced should be authentic and genuine. It’s also essential to track the results of influencer marketing campaigns to see what is and isn’t working and to adjust strategies as needed.

Types of Influencers

Influencers can be categorized into the following four categories:

1. Micro-influencers are individuals with a relatively small, but highly engaged following on social media, typically between 1,000 to 100,000 followers. They are often seen as more relatable and authentic by their followers and considered experts in a specific niche or industry. Brands often work with micro-influencers because they can reach a highly targeted audience at a lower cost than working with larger influencers.
2. Macro-influencers have a larger following, typically between 100,000 and 1 million followers. They have a broad reach and can influence a large audience but may be less relatable and authentic than micro-influencers. Brands often work with macro-influencers to increase brand awareness and reach a large audience.
3. Nano-influencers have a very small following, typically fewer than 1,000 followers. They are often seen as highly authentic and relatable, and are typically considered experts in a specific niche or industry. Brands often work with nano-influencers to reach a highly targeted audience and increase brand loyalty.
4. Celebrity influencers are famous and have a large following on social media, typically millions of followers. They are often seen as highly relatable and authentic and can influence a large audience. Brands often work with celebrity influencers to increase brand awareness and reach a large audience.

Influencer Marketing Examples

Here are a few examples of influencer marketing campaigns:

1. A fashion brand partners with a fashion blogger to create sponsored posts featuring the brand’s products. The blogger’s followers see the sponsored posts in their feed and may be more likely to purchase the products.
2. A food and beverage company partners with a food blogger to create a recipe video featuring the company’s products. The video is shared on the blogger’s social media channels, reaching the blogger’s followers and potentially increasing sales of the company’s products.
3. A beauty brand partners with a makeup artist to create a tutorial video featuring the brand’s products. The video is shared on the makeup artist’s social media channels, reaching the makeup artist’s followers and potentially increasing sales of the brand’s products.
4. A travel company partners with a travel influencer to create sponsored posts featuring the company’s travel packages. The influencer’s followers see the sponsored posts in their feed and may be more likely to book a travel package with the company.
5. A home decor brand partners with a home design influencer to create sponsored posts featuring the brand’s products. The influencer’s followers see the sponsored posts in their feed and may be more likely to purchase the products.

Read more: Social Commerce

Why are Influencers a critical element in DTC Marketing

There has been a confluence of factors facing the DTC market for a while now:

1. Low barriers to entry – With platforms like Shopify, Recharge, Stripe, etc., launching Brands in the DTC space has become easy & inexpensive.
2. Rising CAC – Reaching out to target audiences via Ad Platforms (Meta, Google Ad Manager, TikTok, etc.) has become expensive (causing many to declare death to DTC already).
3. Need for high CLV – To generate decent margins, Brands need to acquire customers who are interested in purchasing premium products and /or purchasing multiple times
4. Need for Social Proof – For customers to trust and purchase from DTC Brands with no offline retail presence, Brands need social proof from existing customers and experts in the domain

So, to sustain and thrive in the DTC space, a Brand must:

• Figure out an efficient way to reach high-LTV customers among millions of people
• Be persuasive enough for them to try out the product

And that’s where Influencers come into the picture. Influencers are opinion leaders with a social following base and are considered trustworthy sources of info in their niche. By partnering with an appropriate Influencer, a DTC Brand can reach its target segment efficiently & position itself effectively. Brands operating in niche categories with high repurchase rates (Health & Wellness, Personal Care, Fitness, etc.) engage the most with Influencers. DTC Brands use platforms like impact.com, TUNE and GRIN to manage Influencer / Partner relationships. DTC Brands need to evaluate influencer performance & tweak their investments continuously. To achieve this, DTC Brands typically use coupon codes or custom URLs to track customers acquired via Influencers and thereby track performance.

Challenges and Risks of Influencer Marketing

One of the main challenges of influencer marketing is the issue of fake followers and engagement. Some influencers may artificially inflate their follower count and engagement metrics, such as likes and comments, by purchasing fake followers or using bots to engage with their content. This can lead to brands paying for promotion to a larger audience than actually exists, and may also skew metrics used to measure the campaign’s effectiveness.

Another challenge of influencer marketing is the lack of control over the content produced by the influencer. Brands may not have control over the content’s messaging, tone, or aesthetic, which can lead to inconsistent branding or negative associations with the brand.

Measuring influencer marketing campaigns’ return on investment (ROI) can also be difficult. Traditional metrics such as sales or website traffic may not accurately reflect the campaign’s impact, and there may be a lack of standardization in metrics used to measure ROI.

Finally, influencer marketing is subject to various regulations and compliance issues. For example, the US Federal Trade Commission (FTC) requires that influencers disclose any sponsored content. Brands may also be held liable for false or misleading claims made in sponsored content.

Influencer Marketing Best Practices

The strategy for Influencer Marketing involves the following key aspects:

1. Research and select influencers carefully: It’s important to choose influencers who are relevant to your brand and target audience, and who have a genuine following that is interested in the types of products or services you offer.
2. Set clear goals and objectives: Before you begin working with influencers, it’s important to have clear goals and objectives in mind. This could include things like increasing brand awareness, driving sales, or improving customer engagement.
3. Have a clear contract: It’s essential to have a clear and detailed contract in place that outlines the terms of the partnership, including the specific tasks the influencer will be responsible for, the duration of the partnership, and the payment terms.
4. Create a content plan: Work with influencers to create engaging and authentic content that resonates with their followers. This could include sponsored posts, product reviews, or branded content.
5. Use a combination of paid and organic tactics: While paid partnerships with influencers can be effective, engaging in organic outreach and building relationships with influencers in your industry is also important. This can help you build long-term relationships and increase the authenticity of your influencer partnerships.
6. Track and measure results: It’s essential to track and measure the results of your influencer marketing efforts to understand what’s working and what’s not. This could include tracking metrics such as reach, engagement, and sales.
7. Engage with your audience: Influencer marketing is not just about reaching new customers, it’s also about engaging with and building a relationship with your existing customer base. Be sure to respond to comments and messages from your followers, and encourage influencers to do the same.
8. Stay up to date: The world of influencer marketing is constantly evolving, so it’s important to stay up to date on best practices and trends in the industry. This could include things like staying up to date on changes to social media algorithms, or keeping an eye on new influencer marketing platforms.
9. Foster long-term relationships: Building long-term relationships with influencers can lead to more effective and authentic collaborations. Consider offering ongoing support and resources to influencers to help them create better content and achieve their goals.

How to Track your Influencer Marketing Efforts

To track the effectiveness of your influencer marketing efforts, you can follow this template:

1. Define your goals and objectives for the influencer marketing campaign.
2. Identify the metrics that will be used to measure the campaign’s success.
   • Reach: This is the number of people who see your content because of the influencer’s promotion. You can track this by looking at the influencer’s total number of followers and the engagement on their post about your brand.
   • Engagement: This is the level of interaction that people have with your content, such as liking, commenting, or sharing. Higher levels of engagement can indicate that the influencer’s followers are interested in your brand and are more likely to act.
   • Traffic: If you have a website or online store, you can track the number of visitors who visit your site because of the influencer’s promotion. This can help you understand how well the influencer drives traffic to your site.
   • Sales: If you are running a product-based business, you can track the number of sales generated due to the influencer’s promotion. This can give you a sense of the return on investment for your influencer marketing efforts.
3. Set up tracking links and pixels to track the metrics identified in step 2.
4. Work with the influencers so they use the tracking links and pixels correctly.
5. Collect and analyze the data collected from the tracking links and pixels.
6. Use the data to optimize the campaign and make data-driven decisions.
7. Continuously monitor the campaign’s progress and adjust as needed to ensure that it meets your goals and objectives.
8. Use a data visualization software to make it easier to understand and make decisions from data.

Influencer Marketing Attribution using a Data Warehouse

Integrating influencer marketing with other marketing channels can help to create a cohesive and holistic marketing strategy. Data warehouse can be used to track the effectiveness of influencer marketing campaigns and attribute any resulting sales or conversions to the appropriate channel.

A data warehouse is a centralized repository for storing and managing large amounts of data from various sources. It allows data from different marketing channels (such as email, social media, and influencer marketing) to be integrated and analyzed.

In addition to tracking performance, a data warehouse can also help with marketing attribution by allowing you to see the complete customer journey. For example, if a customer sees an influencer’s post, clicks on a link, and then makes a purchase a few days later, the data warehouse can help track that entire customer journey and attribute the sale to the influencer’s post.

There are also several tools and platforms available that can help you track and measure the success of your influencer marketing efforts, such as social media analytics tools and influencer marketing software.

Choosing the Right Influencer Marketing Platform

Influencer marketing platforms are online platforms that help companies connect with social media influencers. These platforms allow companies to search for influencers based on specific criteria, such as their number of followers, location, and content categories. The platforms also provide tools for companies to manage their influencer campaigns, track their performance, and measure the results of their influencer marketing efforts.

Many influencer marketing platforms are available, each with unique features and pricing plans. Some popular influencer marketing platforms, apart from already mentioned Impact, Tune and Grin, include:

• Upfluence: Upfluence is an influencer marketing platform that offers a wide range of features, including influencer search, campaign management, and analytics.
• AspireIQ: AspireIQ is an influencer marketing platform that helps companies find, engage, and measure influencers’ performance. The platform offers features such as influencer discovery, campaign management, and analytics.
• BrandSnob: BrandSnob is an influencer marketing platform that helps companies find and collaborate with social media influencers. The platform offers influencer search, campaign management, and analytics features.
• Hypetap: Hypetap is an influencer marketing platform that helps companies find and collaborate with social media influencers. The platform offers influencer search, campaign management, and analytics features.

It’s important to carefully consider the features and pricing of different influencer marketing platforms before selecting one for your business. You should also consider the specific needs of your company and the goals of your influencer marketing campaigns when choosing a platform.

Influencer Marketing Trends

Here are a few trends in influencer marketing that you should be aware of:

1. Micro-influencers: These are influencers with a smaller following (usually under 100,000 followers) who often have a more engaged and dedicated audience. Brands are starting to focus more on working with micro-influencers because they can be more authentic, and their followers may be more likely to trust their recommendations.
2. Authenticity: Consumers are becoming savvier and can spot inauthentic content from a mile away. Brands are looking for genuine and authentic influencers in their content creation who can authentically represent the brand.
3. Integration with other marketing channels: Influencer marketing is no longer a standalone tactic. Brands are integrating influencer marketing with other marketing channels, such as email marketing and social media advertising, to create a holistic and cohesive marketing strategy. Read more: Marketing Analytics
4. Social issues and causes: Influencers increasingly use their platforms to raise awareness about social and environmental issues. Brands are partnering with influencers who align with their values and can help to promote their corporate social responsibility efforts.
5. Virtual events and experiences: With the rise of COVID-19, many events and experiences have moved online. Brands are working with influencers to host virtual events and experiences to engage with their audience and promote their products or services. Also, read – Experiential Marketing

Conclusion

In conclusion, influencer marketing and social commerce have seen a significant rise in recent years, and businesses are aware of their potential value. However, many companies struggle with measuring the ROI of these marketing strategies.

That’s where Saras Analytics comes in. Our platform has helped hundreds of brands establish a strong data foundation to track, analyze, and act on their data, enabling data-driven marketing and growth. So don’t let data be a barrier to success, contact us today.