08 Jan It’s Time To Get the Return on Influencer Marketing You’ve Been Paying For
Influencer marketing has always been a nebulous form of marketing. Its popularity has only made it more difficult to master, especially as each social platform continues to update their algorithm.
Influencer Marketing began with blogging and the largest demographic targeted was mom blogs. Companies would pay these early influencers for a sponsored post and the usual metric for compensation was monthly uniques for the blog. From the get go this was an issue because only a small fraction of the audience will ever see the sponsored post. Yet, this flaw still didn’t change the way influencers were compensated or the way companies measured success. (Regardless, we always measured it based on impressions on blog post and were an innovator in using click tags and tracking pixels to measure blog posts like actual media.)
The next wave of Influencer Marketing moved to Instagram. Here companies paid for sponsored feed posts based on the Influencer’s number of followers. The issue with this metric is that it encouraged influencers to buy followers to attract more offers and be compensated at a higher rate.. So companies paying for these posts wised up and started to quantify success based on “likes”and comments. This strategy still wasn’t foolproof as influencers responded by joining comment “hubs” or “pods,” where they could reciprocate junk comments on each other’s posts to artificially boost these metrics.
The industry has to an extent, wizened up in recent years, and a lot of focus has shifted to micro and niche influencers, but the rates are still being calculated based on follower size.
Now, this wouldn’t be too problematic on Instagram if Facebook didn’t start to impose practices of minimizing organic reach on the platform. The average organic reach on Facebook is <1%. That means that for every 10,000 followers, 100 see it. Only a fraction engage with it. The numbers aren’t anywhere near that low on Instagram (yet), but they’re not nearly as high as they once were. Whereas early on perhaps 50-60% of followers would see a post; now, on average, it’s ~15-30%.
That number not only greatly varies between influencers, it is always fluctuating, and usually not in a direction favorable to advertisers or influencers. But in the current landscape brands have little to no protection when buying a sponsored post if the Algorithm decides to change. And that is because to date, Influencer Marketing has not been treated like media, which it absolutely is.
YouTube is the only one that is commonly treated like media. If a channel has 1M subscribers, it doesn’t make sense to spend $100K on a video based on that number. If the video is only receiving 100K views, are you really going to pay a $1,000 CPM, or $1 CPV (cost per view)? I mean, I’m sure some people do, but I can’t for the life of me think of a good reason to do so. When sold as media, you can pay for only the views that are delivered in a 30-45 day period, on a manageable CPM, and something in-line with your ad buys on Connected TV, Display Advertising, Paid Search, etc.
Why can’t that be done on Instagram? Well, it can. But the industry has been so trained to date that it’s just not part of the lexicon in the space. I think a lot of the issue is due to it being bought by PR firms, Content Marketing firms, and some paid media, which creates confusion when everyone has different definitions of success.
Instagram Analytics provides a detailed breakdown of performance on a post. That gives insight into how many impressions were delivered. But this is worthless if you aren’t requiring, reviewing and acting on this data.
Buying on this model solves two things:
– Removes concern about fraud, and your ad not being seen by a human
– Doesn’t charge you for impressions not seen (which is what happens when you buy based on follower reach)
Now, the cost will be commensurate with the opportunity. CPMs for TV advertising can often reach $100-$200+; Connected TV $40-$75; targeted display $20-$30; and so on and so forth. Authentic integrations into a Feed post, Story or YouTube, are a lot different than advertisement through paid media. They speak to an audience, connect with that prospective consumer, and the brand can piggyback on the backs of the trust the influencer has created over time with his/her followers. There is a lot of value in this. We have run a ton of campaigns over the years that have delivered a substantial amount of value in the form of returns for our partners.
So, our approach will now be to only charge brands for impressions delivered. Our team still spends a majority of time and resources on data, vetting and managing relationships, and will deliver that to brands who will only pay for the native views their campaign delivers.
We are hoping the industry will make this shift in the coming year. Brands are tired of fraud, of paying outsized rates for returns that do not reflect the amount of investment in the opportunity, and desire running more streamlined, transparent campaigns.