Seventy percent of adults aged 18 to 29 use Instagram, and it is common to see sponsored posts by influencers while scrolling through the app. This is also true for other social media platforms.
The University of Washington did a study on how different things that have to do with social media influencers affect marketing. Social media influencers are usually people who have a lot of followers because they are experts on something, like makeup, cooking, or animals.
This study is one of the first to examine influencer marketing by including cost data. Researchers found that if firms spend 1% more on influencer marketing, they would see a nearly 0.5% increase in engagement. They also concluded that reallocating spending based on the study’s insights could result in a 16.6% increase in engagement.
This study looked at how people react to online content. The researchers thought that the number of times something is shared is a good way to measure how much people like it.
Robert Palmatier, who is a professor of marketing in the UW Foster School of Business, said that influencer marketing is doing better than most other types of marketing in terms of ROI.
Palmatier predicts that in the future, marketing will be crowdsourced. As a marketing manager, you will manage a portfolio of influencers, just like Nike manages a portfolio of celebrities.
This study looks at data from Weibo, a microblogging website that is one of the largest social media platforms in China. The data is from 5,835 posts written by 2,412 influencers related to 1,256 campaigns for 861 brands in October 2018. The brand sponsors are from 29 categories, including beauty products, e-commerce platforms and food and beverages.
If an influencer is original and has a lot of followers, their posts are more effective. If a brand is prominently featured in a post, that post is more effective. If an influencer announces a new product in their post, that post is less effective. This is because followers are less likely to want to share something unknown to their networks.
The amount of activity an influencer has, how positive their posts are, and how well their followers match the sponsor’s interests all have an inverse U-shaped effect on engagement. This means that too much or too little of these things hurts engagement. So, a balanced approach is best.
Palmatier said if you don’t post, she will forget who you are, but if you post too much, it cheapens you. There is an optimal point of activity where something performs the best.
If you’re only talking to people who are already interested in what you’re selling, you’re missing out on potential customers. Instead, you should be talking to people who are interested in your product but don’t know about it yet. These are the people most likely to buy from you.
Palmatier explained that Tiffany & Co. used influencer marketing to connect with young people. The company had trouble connecting with young people in the past because it was mostly popular with longtime consumers.
Palmatier said that Tiffany’s marketing department was probably a group of people who knew their historic targets. He said that they spent a very small part of their budget to bring in some influencers. He said that those influencers got multiple times higher returns than Tiffany’s own product managers.
He said that they had to be clever and find a niche. Influencers win their following by understanding their audience very well. When he goes to an influencer with his product, they create posts that resonate with their followers. Tiffany never understood how to position its product for that group, but influencers were able to connect.
Influencer marketing has the advantage of letting customers pick what they want to see. Customers can follow topics they’re interested in on social media, for example if they’re planning a trip to Paris.
Palmatier said that crowdsource positioning is when you give influencers a product and they go position it. He said that people see influencers as being more authentic because they feel like they are actually “friends” with the people they follow on social media, even though they’ve never met them.
Other co-authors were Fine F. Leung and Flora F. Gu of The Hong Kong Polytechnic University; Yiwei Li of Lingnan University; and Jonathan Z. Zhang of Colorado State University.
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Tom Taylor is a sportsman and news reporter who has worked for some of the biggest names in the business. He has a wealth of experience and knowledge in both fields, and is highly respected by his peers.