Influencer marketing is a key component of a brand’s cohesive digital marketing plan, but the future of influencer marketing is not a one-size-fits-all approach. As the industry becomes more sophisticated, brands need to continually evolve their strategy and analyse how they are working with influencers in order to have the greatest conversion and impact on their bottom line.
Over the last five years, we have seen marketing budgets increasingly being shifted towards influencer marketing over traditional print and out-of-home advertising. According to Statista, the global influencer marketing value stood at $16.4 billion as of 2022; having more than doubled since 2019; and is expected to jump a further 29 per cent to an estimated $21.1 billion in 2023.
So how do brands ensure that they get the best cost-per-action out of this budget? Fundamentally, through meeting customers where they are. Brands need to use data to know who their target customer is; and having a clear picture of their demographics and psychographics should inform the foundation of any influencer marketing strategy. It is these insights of your target consumer that determines the profile of influencer you will be collaborating with, as well as what platform is the most relevant for your audience.
It is imperative for brands to do their due diligence on any potential brand partnership to ensure that the influencers demographics align with their target audience – quite simply, are you engaging with a following of potential customers or are you hitting the wrong target market and subsequently wasting your marketing dollars? An influencer with a high percentage of male followers is unlikely to convert if your product is marketed towards women. Similarly, if your target demographic is Gen-Z then TikTok would be a much more effective platform than for example, Facebook.
Nano and micro influencers have a smaller following but, if used correctly, build trust and credibility through a strong relevance to your brand niche. Macro and celebrity influencers, meanwhile, have a high number of followers and potential reach to new customers so are instrumental in building on brand awareness. All are imperative to include as part of a well-rounded influencer marketing strategy, with different tactics incorporated to target each segment of the industry.
Once a brand is clear on its target audience, the next step in identifying the correct influencer for the campaign is to have a clearly defined KPI and call-to-action. As a brand, are you looking to drive conversion, build on brand positioning and awareness or grow your CRM system through data capture?
Influencers with a high reach are instrumental in improving brand awareness and are a powerful form of social proof. These influencers would typically be a consumer’s first touchpoint with a new brand or product launch, providing brands with the ability to reach new audiences and increase traffic, although typically these influencers have a lower engagement rate.
Nano and micro influencers are a great entry point for brands that have a limited budget for influencer marketing as they are, generally speaking, open to working with brands on either a barter basis or through an affiliate programme. These influencers would naturally be existing customers and advocates of your brand and the lifestyle associated with it. Collaborating with influencers with a strong relevance to your brand also allows you to shape authentic stories for owned media channels, with user-generated content being an organic way of using storytelling to build buzz for a brand.
So how do brands get the greatest ROI for their influencer marketing dollars? This is where having access to critical data of consumers, influencers and results is key. A cross-functional approach ensures that brands are targeting each segment of not just their customer base, but also each level of the influencer ecosystem. The use of UTM parameters links is a non-negotiable for any collaboration, big or small, in order for a brand to track and measure ROI – we need to be cognisant of the fact that the highest investment may not always provide the highest return.
By Charlotte Codd, account director at Performance Communications
