Chapter 1

What Is Influencer Marketing?

what is influencer marketing

How many times have you bought a particular product or service because someone you know recommended it to you? Or did some online research to narrow down your choices? Or read product reviews and write-ups to make sure your top choice is a good one?

And my favorite: when you end up buying something you don’t even really need, just because someone you trust said it’s worth it.

While you kick yourself over your monthly credit card statement, remember that you’re not alone.

Research compiled by HubSpot showed that 90% of people surveyed believe brand recommendations from their friends, while 70% believe general consumer opinions. These stats illustrate a trend that many people flat-out trust strangers more than advertisements.

That’s because social influence is one of the most powerful motivators there are.

As society-based, communal creatures, it speaks to the heart of who we are, and how we grow and build our world. (I’ll stop myself from going into a poetic and philosophical spiel.)

Our social tendencies, combined with other factors like savvier consumerism and the growing role of social media in daily life, make it easy to see why some have dubbed influencer marketing as ‘the next big thing.’

And there many others who argue that it’s already at full-steam.

A 2018 survey by the Association of National Advertisers shows that 75% of respondents already use influencer marketing, and 43% are planning to spend more on it next year.

At the core of the phenomenon is the power of relationships: how effectively an influencer’s channel can perform when they’ve built real relationships with their audience, as well as how effective a brand’s campaign can be when it builds real relationships with its influencers.

Take it from Ted Rubin, leading social marketing strategist and the man behind the term #RonR – return on relationship:

Influencer marketing, when used to its best effect, is about building a network of business relationships that will yield results over time. You’ll get as much out of the program as you put into it.

Ted Rubin, Social Marketing Strategist

Ted Rubin, Social Marketing Strategist

This is a radical departure from the current media and ecommerce environment as consumers seek information when and where they want it vs. proceeding along a predictable purchase path.

Mobile is accelerating this behavior, leaving many retailers, brands and publishers perplexed about how to capitalize. So the key is harnessing the power of social influence in a compelling way that connects authentic storytelling with brand and product interaction.

Welcome to the age of influence, where anyone can build an audience, advocate brands, build relationships, effect change, and make a difference.

In this chapter, we’ll discuss:

  • A brief influencer marketing definition
  • Why it’s so effective in today’s consumer landscape
  • Influencer marketing trends and considerations to keep in mind
  • Some key legal and ethical issues for brands and digital influencers
  • How to make sure you’re following laws and regulations

Influencer Marketing: A Definition

To understand the definition of influencer marketing, it’s essential to answer the question, “what is a social media influencer?”

Simply put, a social media influencer is an individual with an online presence on various social media channels (like Instagram, Facebook, YouTube, Twitter, etc.) who can use this presence to influence the behaviors and opinions of their audiences.

In influencer marketing, brands hire – or otherwise partner with – these digital influencers to promote the brand in some way to the influencer’s audience. From sponsored posts to content co-creation to brand ambassadors, the influencer marketing ecosystem takes many forms.

But in the end, you can think of it as using influential people as a marketing channel.

And while top celebrities might be the first ones to come to mind, research shows that your influencer marketing impact can be much higher when you focus on working with people whose audiences align very closely with your brand… even if that means they have only 5,000 followers!

We’ll discuss the concept of smaller, more relevant audiences in Chapter 3 when we get into working with micro-influencers.

 

ROI of Influencer Marketing

Leveraging the power of social influence for marketing is nothing new. In fact, the first celebrity endorsement is dated back to a pottery and chinaware brand in the 1760s.

But in the age of social media, influencer marketing brings a unique set of results that brands struggle to get on their own.

One study from Business Insider Intelligence shows that across industry verticals, the average engagement rate from digital influencer campaigns is 5.7%. To compare, engagement rates from different brands’ Instagram accounts have been around 2–3% the past year.

That’s around double the engagement.

Another survey shows that influencer marketing ROI was $7.65 for every $1 spent.

effectiveness of influencer marketing

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So Why Is Influencer Marketing Effective?

  1. Brands can reach more relevant audiences
  2. Promoted products and services are ‘vetted’ through shared interests between influencers and their followers
  3. It builds a stronger feeling of authenticity among consumers
  4. Consumers feel more confident knowing the influencer stands behind the brand
  5. It caters to consumers’ increasing need to craft their own online and shopping experiences
  6. It fits seamlessly with growing social media culture
  7. Consumers willingly follow influencers, as opposed to ‘unwelcome’ ads’

Oberlo’s Venetia Anderson notes that influencer marketing has a few unique benefits for ecommerce merchants, too:

Venetia Anderson, Oberlo

Venetia Anderson, Oberlo

Many of Oberlo’s most successful merchants turn to influencer marketing to promote their products when they are just starting out.

It’s generally cheaper than advertising, and helps you test both your intended audience and your product ideas at the same time.

An added benefit of using influencer marketing is that you can use the photos they take of your products on your website and in future advertisements (just make sure you get permission to do this from them first).

Because of its mass success in the past few years, social media influencer marketing is growing faster than ever. Let’s take a look at what this means for brands and influencers, including considerations and trends that we can expect to see in the coming years.

Influencer Marketing Trends and Considerations

As we approach 2019 and beyond, it’s clear that social media influencer marketing isn’t going anywhere. In fact, if you take a look at Google Trends, you’ll see that Google searches for the term ‘influencer marketing’ started skyrocketing around 2014.

And if you’ve ever tracked business performance using a chart, you know that the general up-and-right direction of this arrow is good news.

influencer marketing trends

So what’s in store for the industry, and the savvy brands and digital influencers who take advantage of its growing stronghold?

Here are some key trends and things to consider as you learn how to build an influencer marketing strategy.

  • Influencer marketing will ‘take off’ and be included in the typical marketing mix. Even small brands are recognizing the value, which will translate into influencer marketing as one of the basics – like content marketing and paid ads.
  • Because it will be so common, so too will influencer marketing platforms and apps that help to consolidate, manage, and track a brand’s efforts, as well as maintain relationships with different influencers.
  • Brands will place a bigger priority on securing long-term social media influencer partnerships and brand ambassadors. As opposed to one-off campaigns and sponsorships, more companies are seeing the value in relationships that keep their offerings front-and-center while building consumer trust in the long run.
  • Fortune 500 companies will give influencer marketing opportunities a much bigger chunk of their marketing budgets. You could say that larger companies have been ‘pioneering’ the space. They’ve seen results, and they’re ready to invest more.
  • More influencers will begin to recognize their power and use it to build their own consumer brands – like YouTube star Emma Chamberlain. She released a private label clothing line after gaining nearly 5 million subscribers within a year of her debut video.

A Closer Look at Emma Chamberlain’s Influence

I’d like to examine what I’ll call The Curious Case of Emma Chamberlain.

What’s completely mind-blowing about this 17-year-old’s clothing line High Key by Emma is that some of her items sold out in under 30 minutes… even though the items were blurred out in the product photos and the item descriptions were scrambled!

Emma Chamberlain influence

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Another interesting aspect is that her line is sold exclusively on the Dote app, which calls itself ‘The Mobile Mall’ and is geared toward Gen Z shoppers. This exclusivity adds an extra element of appeal, and the fact that nearly everything is labeled ‘limited stock’ creates a sense of urgency.

When you think about it, she’s gained so much adoration, esteem, and loyalty from her fans that they’re willing to shell out money based on blind trust that they’ll like whatever she’s promoting.

This might not seem important to anyone whose main business audience isn’t Gen Z consumers. But remember: these consumers are our next generation – and they’re massively changing the way we buy today.

Some food for thought.

Legal and Ethical Issues

As with any promotion, brands should be aware of the legal and ethical issues that might come up. In the realm of influencer marketing, these main issues relate to transparency – making sure consumers know that all of your efforts are the result of a marketing partnership.

When you think about the power of social influence, it’s easy to see how it can be unfair and misleading when consumers don’t know that a certain post or page is there because the influencer got money or free stuff.

That’s why the U.S. Federal Trade Commission (FTC) created Endorsement Guides that lay out key guidelines and examples for companies to use.

In April 2017, the FTC sent 90 letters to influencers and marketers to educate them on these influencer marketing rules.

influencer marketing legal

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More simply, you must clearly and openly disclaim when a personal relationship with the business influences your promotion, or if they gave you money or free products.

Then in September 2017, the FTC sent warning letters to 21 of those original 90 individuals and groups whose disclosures just weren’t cutting it. Among the 21 recipients included celebs Lindsay Lohan, Naomi Campbell, and Sofia Vergara.

If the FTC gets to the point of sending a final order, those found guilty can face a civil penalty of up to $40,654.

The FTC has made it clear that it’s willing to crack down on those who violate influencer marketing regulations.

How to Follow Influencer Marketing Laws

So how can you make sure you don’t run into any influencer marketing legal issues?

The tricky thing is: there are currently no hard-and-fast rules to follow. The whole process operates on a common-sense approach that requires every piece of promotional content to very clearly state it.

On an Instagram post, for example, this can often be seen with hashtags like #ad, #paid, or #sponsored in the post’s body. You can ask your influencers to use these.

(While some have tried to get away with hashtags like #sp, #partner, #ambassador, or #thanks[brand name], the FTC has stated that these aren’t clear enough… so don’t try it!).

Don't try sponsored ads

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If the platform they’re using has disclosure options, consider using those too. For example, Instagram recently created a feature to disclose paid partnerships at the top of a post. This feature is expected to be mandatory in the future.

Viral filmmaker Zach King used both techniques for his Universal Pictures partnership:

Zach King filmmaker

As you’re starting out, here are some general rules to follow:

  1. Ultimately, each brand is responsible for what its influencers say. So let your influencers know the rules, and monitor their posts to make sure they’re adequately disclosing your relationship – even if it’s just a shoutout after a freebie you sent them.
  2. In the words of the FTC, use language that’s ‘clear and conspicuous.’ One of the easiest ways to do this is the #ad or #sponsored hashtags I mentioned above.
  3. Keep it at the top of the post. Users shouldn’t have to click the ‘Read more’ button or scroll down to see your disclosure.
  4. Even if it seems obvious, don’t assume that audiences will know that a post has a ‘material connection’ – play it safe and disclose anyway.
  5. On image-only platforms like Snapchat, superimpose your disclosures over the photo.

Do's and Don'ts of Influencer marketing

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To learn more about the FTC’s ‘truth-in-advertisements’ guidelines, check out their helpful database here. And take a look at this great infographic that’s broken down by channel and type of post.

 

Now, you’ve got a primer to help answer the question, ‘what is influencer marketing?’ Next, let’s take a look at some of the most common ways that brands and digital influencers collaborate.

Next Chapter