How Influencer Marketing Works

• By : Staff Writer
• Business Development
• 0

Introduction

Learning how influencer marketing works is not a herculean task. Influence plays an important role in the decisions people make. Deciding on what or when to make purchase is usually subtly influenced by external factors. This is how influencer marketing works. It leverages one of these factors – the influence of role models.

Influencer marketing is one of the many components of selling online. It is, however, more closely related to social media marketing. It is a marketing strategy that few small brands understand. Ever heard the word, ‘brand ambassador’? Good! That is the progenitor influencer marketing!

If you’ve ever wondered why brands spend so much on brand ambassadors (read influencers), keep reading. This article discusses just that.

Table of Contents

• What is influencer marketing
• Influencer Marketing vs Brand Ambassadorship
• What is an effective influencer marketing campaign?   
• Conducting a successful influencer marketing campaign 
• Other things to note for the success of your influencer marketing campaign
• Is influencer marketing worth the investment?   
• Why is influencer marketing effective?
• What are the categories of influencers?   
• Why should brands work with influencers?   
• How to measure the performance of an influencer marketing campaign

What is influencer marketing?

Influencer marketing is the collaboration between a brand (business) and an individual who can affect people’s decisions to patronize a brand to increase sales and awareness. Simply put, businesses partner with someone who has a large online following to endorse and showcase their products or services. The goal of the partnership is to convert followers of such influencers into customers.

Leveraging the explosion of social media use gave rise to social media marketing. This in turn created an avenue for businesses to include influencer marketing in their sales strategy. An influencer is someone who has been able to get the attention of a lot of people either through valuable content, social service, demonstrating expertise or outstanding performance in a field.

These people follow the social media influencer, paying close attention to what they say or do. Moreover, most of them see the social media influencer as a role model and their decisions on certain issues are directly or indirectly influenced by the influencer.

Consequentially, when these influencers endorse a particular product or service by either using or advertising it, many of their followers purchase the endorsed product or service.

Influencer Marketing vs Brand Ambassadorship

When the average person hears the word ‘influencer’ today, they immediately think of Instagram, Facebook, Tik Tok, or Twitter. The word influencer marketing is being closely associated with social media. However, influencer marketing has begun long before the advent of social media. 

Giant brands like Coca Cola and Guinness had been leveraging on influencer marketing since the 90s. Remember Michael Powers’ adverts for Guinness? What about Britney Spears and other popular musicians being signed on as Coca Cola’s brand ambassadors? 

The difference between influencer marketing and signing on brand ambassadors is simply the tenure of the relationship between the influencers and the brand. While influencer marketing, as we know it today involves a short-term agreement with brands, brand ambassadors usually have a longer-term relationship with brands.

What is an effective influencer marketing campaign?   

A marketing campaign is an organized course of action to either create or promote awareness of a product or service or to sell it. An influencer marketing campaign, therefore, entails promoting or selling a product or service through an influencer. An effective influencer marketing campaign fulfills its goals and objective with the least resource expense.

It is correct to say that the major component of an influencer marketing campaign is the influencer. The effectiveness of an influencer marketing campaign, therefore, depends in a major way on each brand’s choice of an influencer.

Conducting a successful influencer marketing campaign 

You shouldn’t just splurge on someone because they have a large following. Having a large following, though important, is not useful in itself to make your influencer marketing campaign successful. You also need to check if the engagement is lively. People buy followership these days, those kind of inflated or fake followership are not useful.

Also, you need to define your niche and clearly define who your target audience is. Who is your product/service? Who needs your product/service? Most importantly, who wants your product/service? 

Moreover, you need to ascertain that the influencer has built their followership in your business niche. Having clearly defined who your target audience is. You should choose an influencer who has your target audience as followers. This is perhaps the most important thing to note in learning how influencer marketing works. 

An influencer may have a million followers, but if the followers are not your target audience, they are useless to you. For instance, if you run an auto business you do not need an influencer in the dental health niche even if they have a million followers. Therefore, your business niche and that of the influencer must be as closely related as possible. That’s how influencer marketing works.

Also, you need to draw a clear and concise contract agreement with the influencer. The agreement should be legally binding. It should also detail how long the partnership with the influencer will last. Moreover, the contract should state how frequently the influencer will run your ad. Most importantly, it should contain how much you will pay the influencer.

You may add other terms to the agreement as you deem fit as a brand. It is also good practice to allow a legal practitioner to go through the contract for you.

Other things to note for the success of your influencer marketing campaign

Furthermore, it is advisable to engage more than one influencer in your influencer marketing campaign. Do you know how the saying goes? It’s not safe to put all your eggs in one basket.

Moreover, you should have a monitoring system or data analytics in place. This is what will help you decide the success or otherwise of your influencer marketing campaign. You must be able to track the exact volume of sales each influencer generates for your business.

Lastly, you should have a well laid out plan and budget or your influencer marketing campaign. The budget should contain the projected cost and revenue. Ideally, costs should be overestimated while revenues are underestimated. If this does not give you an adequate profit margin, you should not proceed. Do not contract an influencer your business cannot afford. This is how influencer marketing works.

Is influencer marketing worth the investment?   

The answer depends on who you ask and what their experience is. Each business will have to proffer their answers to this question. Their answers, which is based on their experiences, depend on how they carry out their influencer marketing campaign. 

Generally speaking, influencer marketing is effective all other things being equal.

According to Hubspot, 80% of marketers reported influencer marketing as an effective marketing strategy, 89% described it as good enough or even better than other marketing channels. In terms of the quality of traffic and customers, 71% of marketers opined that influencer marketing generates good quality traffic and customers. 

It also reported that 49% of consumers rely on recommendations from influencers before making decisions on purchases; while 60% confirmed a recommendation had influenced their choices when shopping in-store.

The rule of every marketing campaign is to ensure not to spend disproportionately on what you hope to gain. This is why analytics is very important in business. Once a marketing venture is spending more than its earning, it’s time to pull the plug.

Therefore, your influencer marketing campaign would be worth the investment if you do not spend more than you earn from it. If you also take care to follow the steps listed above in making your campaign effective, you definitely will not lose out, every other thing being equal.

Why is influencer marketing effective?

Influencer marketing is effective because of how it works. The secret sauce of influencer marketing lies in the psychology of consumers. People find it easier to make a purchase when others are making purchases too, especially people they admire. It’s easier to do something when others are doing it, this a common human behavior. Influencer marketing, therefore, leverages this.

People are more inclined to make a decision when others they admire or look up to spur them on. For instance, most teenagers would prefer a certain brand of tennis shows because their favorite tennis player wore it to a famous game. Also, most girls would usually feel more inclined to dress a certain way because their favorite TV personality dress that way. This is how influencer marketing works.

Moreover, customers tend to trust other people better than marketers and producers. Purchasing decisions are reached faster when marketing is carried out in the wheels of word-of-mouth and social proofs. Word-of-mouth, testimonial, and social proofs are the hinges on which influencer marketing rests.

Therefore, influencer marketing is effective because it relies on word-of-mouth, testimonials, and social proof. It also works because it is highly well targeted at people who are already inclined towards and interested in the niche of the product its service is being marketed.

What are the categories of influencers?   

There are 5 categories of influencers and they are stated as follows;

Micro-influencers

Micro-influencers usually have a not so large following. Their followers are usually within the range of about a thousand to tens of thousands. They have valuable content for their followers in a specified niche and have good interaction with their followers. They communicate and engage their followers through social media, written publications, and forums.

Moreover, a key advantage of micro-influencers is that they have a high engagement rate with their followers due to the manageable size. Also, they are well familiar with the thought processes of their followers and can envisage and answer their objections.

They also have a close bond with their followers and have personal relationships with them. These, therefore, make them valuable to brands and businesses seeking to promote their products and services.

Celebrity influencers

Celebrity influencers are a more expensive route to influencer marketing. Although expensive, celebrity influencer marketing is effective. Celebrities are people who are popular and well known across many industries. They already have a large number of following or fans who may or may not be your exact target audience. 

However, because they are well known, they are usually effective at reaching a larger audience across many platforms. It is a highly effective social proof to have them promote your product or service.

You may ask celebrities to take pictures with your products, wear your branded items, or explain why they love your product or service to their audience.

Blog influencers

Blog influencers have established blogs with a large number of readers, followers, or subscribers. Usually, they have established themselves as an authority in a certain niche and already have access to the thousands or millions of the target audience in that niche.

Brands may approach them to write a review of their product or service. They can also write about answers to frequently asked questions about a product or service.

Social media influencers

Social media influencers are people who have carved a niche for themselves on social media. They are well known on specific social media platforms and have a large following.

They post content on various on a wide variety of topics. Brands should work with social media influencers whose contents are complementary to their products or services.

Key opinion leaders

Key opinion leaders are high-level experts in a specialized topic in certain fields. They may or may not have a large following but their opinions are weighty. Their endorsement of your product or service will convince many to purchase.

Why should brands work with influencers?   

Brands should work with influencer marketing for the following reasons;

First of all, having an influencer marketing plan gives brands a head start in their marketing efforts. One of the most important things in marketing is focusing on the right audience. Influencer marketing allows businesses to direct their marketing efforts towards a prepared audience who are actively interested in their niche.

Moreover, influencer marketing allows brands to leverage the relationship, trust, bond, and credibility that influencers had already built with their audience.

Influencer marketing also improves and widens the scope of brand awareness. It promotes the brand name and identity across many platforms when well-planned.

Moreover, it helps businesses to build good partnerships and network.

How to measure the performance of an influencer marketing campaign

Influencer marketing is one of the popular marketing strategies brands and marketers adopt these days. It has been proven to be highly effective and is being adopted by many. Despite this, about 53% of worldwide brands find it difficult to measure the performance of an influencer marketing campaign, according to Mediakix.

Initially, businesses use a flat rate of sponsorship to reward influencers. However, brands are now looking into measuring the performance of the influencer marketing campaign to determine how to compensate the influencer.       

Some of the measures brands use are outlined below:

Influencer score

An influencer score is a number between 0-100 used as an indicator or measure of how influential an individual is on social media. It can be used to determine which individual has the greatest impact on social media. There are different methodologies and tools specifically designed for this. Thorough research is needed for an informed decision.

Influencer reach

Influencer reach is the total number of people an influencer has in their circle of influence. It is usually calculated based on their following. An influencer’s reach is the total number of people can speak through their social media accounts, blogs, forums, and websites. It is the total number of subscribers or followers they have. 

An influencer may have a reach of several thousand or even millions. This number may be attractive to brands who are interested in promoting their products or services through influencer marketing. It is, however, important to note not only the reach of an influencer but their engagement rate.

Engagement Rate

Engagement is simply how many of the people in an influencers’ reach interact with their content and how often the interactions occur. Influencers with good engagement get the people in their reach to perform certain actions like views, clicks, comments, replies, sharing, hashtags, tags, etc.

The more engagement an influencer has, the better suited they are for brands and their marketing purposes.

Cost Per Engagement (CPE)

Cost per engagement is usually calculated based on how responsive the target audience is towards their call to action. The cost incurred in the course of the campaign is compared with specific consumer action. Some consumer actions use is the volume of purchase, number of clicks, subscriptions, or email sign-ups.

None of the measures stated above can be said to be the best. Each has its merits and demerits. Each brand is expected to set goals for their campaign and determine what their key performance indicators (KPI) would be. The choice of whether to embark on an influencer marketing campaign; which type of influencer to engage, and how to measure their performances would then be based on the pre-determined goals and KPIs.