Why Influencer Marketing Shouldn’t Influence Your Marketing Budget
Brittany Thomas, Senior Producer and Developer – Shop Marketing and Creative Group
Influencer marketing is not a new concept but, with the continued importance of social media, it has become more prevalent. Rather than focusing on a target market as a whole, influencer marketing focuses on influential people and identifies individuals that can impact potential buyers. More and more brands are moving toward influencer marketing and, in some cases, have chosen to allocate the majority of their marketing budget toward influencers.
Influencer marketing seems to be a brilliant approach: identifying real individuals with an established social media presence that your target audience can relate to while positioning your product in a seemingly more authentic and less promotional way.
But, what kind of ROI can influencer marketing bring you?
According to HubSpot, despite the belief that influencer marketing is a worthy tactic, it remains “incredibly challenging” to report accurate campaign ROI. In fact, 78% of marketers say that one of their top 2017 challenges will be determining the success of their influencer marketing campaigns. Additionally, Rakuten Marketing and Morar Consulting conducted a survey of 200 marketers and found that 38% of marketers were unable to determine whether influencer activity actually drove sales and 86% were unsure of how influencers calculate their fees. While influencer marketing seems attractive on the surface, these statistics should alarm you.
Not only is determining ROI a challenge, the significant surge in influencer marketing has also put brands at a higher risk of fraud. Not all influencers are celebrities, some are simply individuals on social media with large followings, captivating posts, and lots of user engagement. It easy to label these people as influencers, but how do brands know whether the influencer is actually influential? There are over 83 million fake profiles on Facebook alone (stock photos, purchased followers, impersonators). So, how do brands determine if an individual is a legitimate candidate for their product?
To prove that it is possible to secure a paid brand deal, MediaKix created two fictitious accounts with stock images and a model, purchased followers, and purchased engagement. Once hitting the threshold of followers and curated content, each account was offered monetary compensation, free product, or both, from four different brands! Without meeting an influencer in person, brands are taking the risk of sending their products and payment to fraudulent accounts.
Influencer marketing is further complicated by the Federal Trade Commission (FTC), who has recently increased enforcement of its endorsement guidelines. Under those guidelines, influencers (and therefore brands) must more clearly indicate when they are paid to promote products through their social media channels with tags like #AD or #ADVERTISEMENT, potentially lessening the impact of less advertorial influencer marketing approach.
Without real benchmarks for success in place, the chance of fraud, and antithetical regulations, influencer marketing should not be a tactic that brands heavily rely on, but rather a very small piece of the brand’s marketing puzzle.