A fillip to e-commerce
During the pandemic, a dramatic increase in time spent in front of screens ensued and, social media catapulted to being a primary source of interaction and entertainment not only for millennials and Gen Z but even the older demographics. This trend continues to hold even beyond the pandemic. Such increasingly digital behaviours in consumers have opened up a marketing opportunity for creating brand awareness and engagement with audiences using influencers and targeted content thus, providing a fillip to yet another channel for commerce.
The impact of these new consumer behaviours has been quite dramatic. Take for instance social commerce, which in the US is estimated to account for $84 billion of revenue (Business Insider) and, where 48% of millennials and Gen Z users claim to have already used social channels to purchase products (Bizrate Insights). India-based studies also mirror that heightened use of influencer marketing has piggybacked atop the burgeoning consumer interest in social media. Not surprisingly, there is a huge upswing in companies designing campaigns using influencers who are perceived to be the right fit for their brands. An influencer is someone who posts in social media in exchange for compensation and, influencer marketing attempts to propagate products or increase brand awareness and engagement by spreading curated content targeted at social media users by those who are considered influential. Influencer marketing is executed on the pillars of technology, reach, relevance and resonance and, is estimated to hit $15 billion in revenue in 2022 itself.
Interestingly, this heightened interest in influencer marketing is somewhat tempered by the criticism that it can be a virtual black box for advertisers who want to see measurable outcomes for their expenses. With ever increasing dollars being put into this stream, there are demands from marketers for tangible performance measures that establish a stronger cause-effect corelation with campaign effectiveness, while necessarily addressing questions regarding ROI.
This article explores an important perspective namely, key considerations that marketers such as brands or agencies should weigh in during decision making.
But even before that, there is a need to discuss the tendency of brands and marketers that wrongly compare results with other digital media campaign engagement metrics. Unlike social or digital campaigns, in influencer marketing campaigns the influencer creates content that can be re-purposed and metrics of the benefits accumulate over longer periods of time. Thus, this longer lasting effect of social content should ideally not be compared with digital campaigns that have distinct start and end dates. Another temptation of those brands and marketers that are overtly KPI focussed is to evaluate and compare the cost of media buy with that of a content creation campaign, which may not be the right thing to do.
Having addressed that, we now move onto some common questions that preoccupy brands and agencies when using influencer marketing; for instance, how does their influencer programming compare to the industry standard. Or, while providing brand visibility to their end-customers, how do their influencer marketing campaigns perform relative to multiple data points? Or even, how can the data enable them to optimize their spends by benchmarking performance of programs across social channels, categories or influencers? From here emerges a demand for benchmarks as an iterative guide, reflective of this constantly evolving space, that can enable them to maximize ROI with the right sponsored content and drive that all-important metric: conversion or sales.
Given that demands are shifting to more performance-driven attribution with creators, benchmarking is of interest where for instance the performance of individual content posts are tracked and compared with historical category and social platform data. For example, if an influencer produced a fitness post on Instagram say a week ago, the performance of that content is compared to both 7-day-old fitness category benchmark and the Instagram benchmark.
Some takeaways for tech service providers operating in this space is that marketers seek speedy customisation in product development and, a design-first approach while incorporating new features. Pertinently, a brand’s need for visibility of a single central database; a repository which contains all historical data pertaining to the organization’s creative relationships has gained importance. Brands can then dynamically evaluate validated benchmarks from the data repository containing campaigns and transactions across tens of thousands of influencer marketing programs across multiple verticals to get an unbiased view. Platforms such as the Qoruz Score seems to answer this challenge by providing a meaningful and transparent framework to measure the impact of influencers on brands to elevate influencer marketing to the level of other core marketing practices. Others such as Unbox social, Eleve Media, Klear etc also are available easily. In fact, service providers can be both: a technology-only provider (e.g., Qoruz a AI driven SaaS based platform that offers a licenced version) and also offer agency services (e.g., TeraReach which has a servicing model) or either one.
Other challenges that marketers face when implementing influencer marketing are legacy metrics or ad-hoc reporting that don’t accurately measure the performance of a brand or the impact of influencer’s content on business metrics. This has seeded interest in those tech platforms or solutions that allow data-based decision making and, not on fuzzy information or just vanity metrics. Also, tech service providers are consciously expected to bring in a progressively more affordable price point; being deeply aware that marketers do not want to forfeit a sizable portion of their budgets to a service provider’s platform while running their marketing campaigns.
In sum, marketers require dash boards for comprehensive decision making which include:
Competitor mapping: to understand competitive behaviors including new ‘kids’ on the block;
Category benchmarking: to analyze firms with products across multiple categories perform both within and across specific categories.
Platform analysis: ability to consistently have visibility and measure across key social platforms and geographies and understand where to focus efforts.
Influencer insights to track performance of influencers and content; better understand what engages target audiences, discover new influencers for partnerships etc.
With reportedly 11x more ROI as compared to the typical marketing campaigns, we no longer debate the benefits of an influencer marketing strategy. When done well it can be the most cost-effective way to see sales conversions, track consumer sentiment and follower engagement across all platforms. With trends towards more accountability and transparency gain momentum especially as the industry moves towards a more performance-based influencer marketing, it is important to have easy access to better analytics and tracking options, that measure performance effectively.
Dr. Jacqueline Mundkur, Sr. Adjunct Faculty, School of Business Management, NMIMS and, CEO of The Nxt Levels, a Business Advisory Firm. She is a Marketing, Sales and CX practitioner with more than 2 decades industry experience across multiple industries and writes on contemporary marketing and CX strategies.