Despite the broader advertising pullback since the onset of the coronavirus pandemic, influencer marketing appears to be somewhat resilient. Some creators saw a slight dip even as social media usage notched upward during early lockdowns, but some signs point to a gradual recovery in ensuing months as marketers target homebound consumers and turn to influencers for fresh creative while studio production remains mostly off-limits.
The once niche tactic has seen a boom in recent years with the emergence of creator-driven platforms like TikTok and new features on established channels like Instagram that are designed to appeal to influencers and their typically young fans. Before the pandemic, spending on influencer marketing was predicted to hit $9.7 billion in 2020, with 66% of marketers planning to boost their budgets in the space.
Now, influencers continue to fit into growth strategies for advertisers looking to cut through ad clutter by working with social media personalities who possess dedicated followings.
In this report, Marketing Dive breaks down:
How brands like Grubhub are deploying deeper influencer integrations to reach homebound followers, particularly Gen Z
New social platform developments and ad formats supporting the tactic
Consumer trends driving growth in the influencer sphere
We hope these insights help to shape your strategy for the months ahead in a rapidly evolving environment.
Influencer campaign volume slipped 3% during pandemic, Forrester finds
By: Robert Williams
Influencer marketing appears to have been resilient during the pandemic among brands that show little signs of cutting back their spending, even as the broader advertising market experienced a significant pullback in the second quarter, a report from Forrester Research suggests.
The number of social influencer campaigns fell 3% during the early days of the coronavirus pandemic, slightly reversing a trend of rising activations in the past few years. While activations slowed in March, they returned to near normal levels by April and May, according to Forrester's study.
A poll of 15 marketers at large brands conducted in April found that 13 of them expected their influencer investments to continue to grow, while the remaining expected investments to be flat. No one in the survey said they expected their influencer marketing spending to fall.
Marketers used influencer campaigns for creative work and content that was unavailable from advertising agencies when pandemic lockdowns began, helping them get in front of consumers at a time when social media usage was increasing. That shift helped to buoy spending on influencer campaigns in April, per Forrester.
In contrast, major ad holding companies reported falling revenue during the period, including a 23% drop at Omnicom and 13% declines at Interpublic Group and Publicis Groupe, with the automotive, travel, financial services and industrial categories experiencing the biggest cuts in ad spending, the Wall Street Journal reported.
Forrester, whose analysts worked with 20 influencer marketing businesses to learn how the pandemic affected them, compiled several insights about working with influencers on campaigns during the ongoing health crisis. The researcher found that overtly commercial posts by influencers may be perceived as "mercenary and inappropriate" during the pandemic. To avoid damaging the reputations of brands and influencers, posts must have an appropriate tone, the finding suggests. In kind, airlines, hotels and retail chains may be wasting their spending on influencers amid pandemic restrictions, per Forrester.
The resilience of influencer marketing came as marketers expected a slower economy to result in lower spending on all media channels. Forrester forecast a 10% to 20% decline in social media marketing this year, even as homebound consumers spend more time online, including on social channels where influencers have remained active. The influencer activity came as 46% to 51% of U.S. adults said they increased their social media usage during the pandemic, per a Harris Poll study cited by eMarketer.
A variety of brands recruited influencers for their campaigns during the first few months of the pandemic to reach consumers through digital media platforms. Among the examples in Q2, NYX Professional Makeup's campaign on social video app TikTok included influencers who guided viewers through a makeup routine, while chocolate maker Russell Stover enlisted TikTok star Jason Coffee to urge people to join the "world's biggest virtual hug" as the pandemic kept people apart.
Study: Microinfluencer opportunity 'massive' as Gen Z, millennials organically promote favorite brands
By: Peter Adams
Influencer marketing's command of the attention and trust of young consumers has been apparent for years now, but research from Morning Consult indicates that growing interest in the channel as a career path can benefit brands as well.
In a survey, Morning Consult found that over half (54%) of Gen Zers and millennials are interested in becoming influencers, valuing the time flexibility, pay and recognition. Pursuing an influencer career comes as young consumers continue to trust online content creators more than traditional celebrities. Nearly three-quarters of Gen Z and millennials follow influencers, with teenagers often following multiple accounts.
At the same time, 86% of Gen Zers and millennials report they're open to sharing sponsored content online for money, per Morning Consult. In fact, 61% of respondents said they're likely to boost the brands they enjoy without getting paid to do so, creating a "massive" microinfluencer opportunity for businesses to tap into at a relatively low cost.
A bigger micoinfluencer economy has been steadily building as brands focus less on high-profile and often pricey celebrity endorsements. Microinfluencers comprise 40% of brands' annual influencer spending versus 28% for celebrity influencers, per a 2019 survey by Rakuten Marketing.
Authenticity is one of the most critical factors for influencer success. Influencers' conveying of expertise in the products they're promoting makes their followers 56% more likely to purchase, Morning Consult found. Almost half (49%) of those surveyed said an influencer's relatability drives them to buy.
However, channel choice and demographics are also important to consider when making the most out of influencer marketing. More 13- to 16-year-olds use the viral social video app TikTok than Facebook, according to Morning Consult. Twitch, the livestreaming platform owned by Amazon, is another increasingly popular destination. Yet TikTok and Twitch, despite currying favor with teenagers, are not the dominant services for following influencers. The biggest sites for following influencers are actually YouTube for young men, who are interested in categories like gaming and fitness, and Instagram for women, who turn to the platform to follow beauty and fashion accounts, per Morning Consult.
The controversial YouTuber PewDiePie, for example, was the most-cited influencer in Morning Consult's survey, achieving the same level of name recognition — and slightly higher favorability — among Gen Z men as NBA star LeBron James. Kylie Jenner, who's built a successful line of beauty products thanks to her massive following on platforms like Instagram, also landed in the top five for recognizability.
You, like many other marketers, are likely using the trainwreck known as “2020” to reevaluate your philosophies, past and pending investments, the efficacy of certain tactics, and, last but not least, visionary opportunities to create seismic growth for your brand. Beyond mask-wearing and hand-washing, this is a safe and healthy practice for marketers in this climate.
As you analyze the broad spectrum of marketing tools to which you have access, you’ll likely notice you have labeled different vehicles according to the widely-accepted interpretation of their primary purpose — consumer promotions drive trial, TV and digital display create awareness, influencers inspire, email drives loyalty and so on. This isn’t pigeonholing for pigeonholing’s sake; instead, it’s your method of creating a classification system that specifies your go-to tactics for achieving any variety of objectives.
But as you move between planning seasons and copy/paste your list of available tactics, you often miss some of the advancements made in these industries and undervalue their newfound preparedness to solve a wider array of challenges. Influencer Marketing, for example, is a routinely misunderstood industry because of the rate at which it evolves. Each year there are new channels, new measurement capabilities, new concerns and new creators bursting onto the scene, yet, because your attention is constantly pulled in no less than seven-hundred directions, it’s difficult for you (and even for many of the industry’s providers) to keep pace.
Typically grouped with other top-funnel tactics, Influencer is classified by most as an effective tool for creating brand and product intrigue as an early step in the consumer journey. For many years that’s exactly what it was. We all thought, intuitively as consumers ourselves, that it probably impacted purchase decisions in some way, but there was no definitive evidence to prove it and marketers valuing attribution over instinct largely steered clear. Today, though, it’s possible (and, by all means, advisable) to fight beyond the fluff and evaluate these spends in ways once considered unrealistic.
These are some of the new fundamentals of Influencer Marketing, each allowing you to measure its impact more accurately and, in some cases, merge fragments of the consumer journey into a single touchpoint.
Influencer “Assist Rate”
As a disciplined marketer you’re well-versed in the art and science of multi-touch attribution, and part of Influencer Marketing’s evolution has been recognizing its rightful place (and criticality) among those “touches.” Clarifying the difference between influencing a sale— compelling a consumer in the direction of your brand over others — and enabling a sale — simply facilitating a transaction — is an important distinction you must make when building and evaluating these models.
In a recent webinar where Inmar Intelligence’s Leah Logan presented alongside Austin Ratner, Affiliate and Digital Partnerships Manager at HP, we learned about their strategy for isolating various stages in purchase journeys for consumer electronics items. HP has determined that, though influencer-created content may not be the first or last touchpoint, it is an important piece in eliciting sales for their brand that may not have otherwise occurred. Using calculations modeled specifically for their business and its categories they understand that influencers “assist” in 40 percent of purchases occurring through various eCommerce channels, versus a 14 percent average assist rate for other tactics.
Developing similar methodologies to understand how, when and where positive actions for your business are influenced can more accurately guide your investments. Your business may be wildly different from HP’s — for example, consumers don’t behave the same when searching for meat marinades as they do when searching for a new laptop — but it’s critical to understand which spends are wasteful and which are directly or indirectly responsible for turning demand into purchases.
Replicating Familiar Experiences, and Making Them Shoppable
We could all have a quick gripe sesh about the lack of visibility into walled garden performance, and the need to play directly with platforms (and dish out a significant share of your budget to them) in order to gain valuable attribution data or properly tag placements for your own analysis. We completely understand why they’re guarded with this information and altogether hate it at the same time. It just is what it is, that’s that, and [insert third cliche here].
It’s possible, however, to create “extensions” of walled garden ecosystems that look, feel and function similarly, but with added features that enable seamless shopping and, in some cases, include promotional offer integration. Creating experiences similar to those provided by walled gardens — such as microsites showcasing sponsored content and use cases in a feed-style format — is not a new concept, but is one that elicits user behaviors comparable to those witnessed on popular social platforms and creates a higher likelihood of purchase follow-through.
Combining commerce features with doppelganger extensions of native environments gives you a way to merge touchpoints and bring intuitive shopping mechanisms into the content discovery experience for viewers. Shoppers will continue to shop at their own pace and with their own, unique variety of touchpoints, but solutions exist to help them simplify the process.
Smarter (and Distanced) Events and Experiences
Odds are the event plans and engaging shopper experiences you had scheduled for this year were spoiled, but the lack of physical gatherings and encounters with retail associates doesn’t eliminate the possibility of personalizing unique interactions with your customers.
The new age of Influencer Marketing was already slated to include expanded roles for everyday creators as brand spokespeople, and the pandemic has only accelerated that plan. Across various industries influencers are playing the part of virtual store associates, creating social broadcasts (both one-to-one and one-to-many) for brands and bringing trusting audiences into the experience. They’re creating new looks for apparel companies via at-home try-ons, online “masterclass” tutorials for beauty brands, and hosting nightly or weekly events where they share new recipes, all streamed live on social platforms or via one-to-one channels like video calling.
These interactions between online personalities and audiences large and small bring an unparalleled amount of personalization and democratization to your marketing toolkit, as you allow real people (armed with necessary guidelines and guardrails, and often joined by moderators) to share their actual use cases in an informal setting. Even better, new technologies enable many of these sessions to be shoppable and attributable by facilitating ways for viewers to seamlessly purchase the item(s) showcased with a single click.
As you’re navigating this new world and doing so under heightened scrutiny surrounding each dollar spent on advertising, it’s important to refresh what may have become outdated observations of growing industries. Influencer Marketing has matured beyond its nascent stages and is ready to become a powerful and relied-upon tool in your arsenal, just as it has become an irreplaceable step in consumers’ complex paths to purchase.
Article top image credit: PeopleImages via Getty Images
TikTok tests new ad format to share revenue with influencers
By: Robert Williams
TikTok began piloting an advertising format in 2020 with a call-to-action (CTA) button that links marketers to social influencers who post in the popular viral video app. TikTok will split the ad revenue with influencers, helping to support their creative efforts, Digiday reported.
TikTok's test of a transactional ad format could be useful in attracting brands to and keeping influencers interested in the platform. Brand advertisers who are seeking more ways to measure the effectiveness of their influencer campaigns also may be interested in TikTok's new ad format. For direct-to-consumer (DTC) brands that have increased their media spending during the COVID-19 pandemic on video platforms like YouTube, an ad format with a CTA button is especially significant in helping to drive response from TikTok users.
The ad format could also help mobile marketers to set up influencer campaigns directly through the viral video app as part of their other promotional efforts. By giving influencers a way to monetize videos through revenue-sharing arrangements, TikTok can support a virtuous cycle that incentivizes creators to develop higher-quality content, which in turn, drives audience engagement.
TikTok faces competition for sought-after talent, including its influencers who got their start on rival platforms like YouTube, which has revenue-sharing plans for popular creators. The competition for talent is growing, with Facebook's IGTV offering more incentives to create videos for its platform and the livestreaming industry swelling with Amazon's Twitch, Facebook Gaming and YouTube Gaming.
TikTok's test of the CTA ad format for influencers comes as the company carves out an identity as a mobile marketing platform. The coronavirus pandemic has heightened TikTok's differences from rivals like Facebook, Instagram and Twitter.
"These platforms that were once used as an escape from everyday life are now on information overload," Suzin Wold, SVP of marketing at Bazaarvoice, said in emailed comments. "In contrast, TikTok is the destination for fun and community, and brands should keep all of these platforms in mind when developing their social strategy."
However, TikTok's place in the U.S. influencer marketing landscape became more insecure by mid-2020 once President Trump singled it out as a potential security threat because it is owned by China-based ByteDance. Questions about TikTok's role going forward could be resolved by mid-September, by which time Microsoft is expected to announce a deal to acquire the platform. If that doesn't happen, an executive order banning U.S. companies from doing business with TikTok goes into effect on Sept. 20.
The creator CTA ads are available to a small group of advertisers and agencies during the test. As of May 2020, TikTok hadn't set the terms for revenue-sharing with creators, and is weighing arrangements that would give creators 20% of ad sales, Digiday reported, citing people familiar with the matter. The new ad format would give TikTok the chance to capture some of the revenue that advertisers currently pay directly to influencers for sponsored videos.
TikTok's test of the ad format follows a variety of initiatives to blend influencer content with commerce as consumers become more comfortable shopping on their phones. Apparel brand Levi's touted its successful test of "Shop Now" buttons that let consumers buy products shown in TikTok videos, TechCrunch reported. Last year, TikTok introduced a Creator Marketplace to connect brands with influencers and started running beta tests that let creators embed links to product pages in their videos.
TikTok is especially popular with younger audiences, helping brands to connect with consumers that are difficult to reach through other media channels. Its global downloads more than doubled to 315 million in Q1 2020 from a year earlier, lifting its total past 2 billion as people boosted their mobile usage during the COVID-19 pandemic, researcher Sensor Tower estimated. TikTok's lifetime installs in the U.S. reached 165 million, behind 611 million in India and 197 million in China, where the app is known as "Douyin." That mass audience makes TikTok much more viable as a mobile marketing platform.
Virtual ambassadors cloud already murky legal picture for influencer marketing
Whether or not CGI avatars have staying power, they're raising questions around the increasingly blurred lines between content and ads in digital media.
By: Natalie Koltun
Yumi, an ambassador for Procter & Gamble's SK-II brand, is adept at interacting with the Japanese skincare company's customers online, offering beauty tips around the clock to help people better understand and care for their skin.
But unlike the products she's hawking, Yumi is not real. She's a computer-generated avatar powered by artificial intelligence — a chatbot with a face that doubles as a lifelike brand ambassador. In June 2019, SK-II unveiled Yumi as "the world's first autonomously animated digital influencer" that can answer customers' questions and suggest skincare products based on a shopper's preferences.
SK-II is far from the only brand to incorporate virtual influencers into its marketing strategy. Chanel, Prada, KFC, Vans and Rihanna's Fenty Beauty are among the established players that have explored driving brand buzz with similar digital characters.
Much of what's supporting the uptick in virtual influencers is consumer curiosity and mounting uncertainty around the authenticity of traditional creators, according to Anna Gilligan, senior strategist at agency T3.
"There is a lot of skepticism right now about what's organic content versus paid, so this gives brands an out-of-the-box way to cut through that conversation," she said.
Whether or not these characters have much staying power as influencer marketing's next big thing, they are raising a slew of legal questions around proper disclosure, intellectual property and blurred lines between creator content and outright ads. Coupled with few concrete guidelines from the Federal Trade Commission, these questions point to the current state of legal limbo in influencer marketing as the federal agency that protects consumers from misleading advertisements catches up to the trend.
'Common sense can go a long way'
The FTC proposed guidelines in 1972 to crack down on misleading advertisements. It has continued to update its rules since then to match modern trends and technology, but is often months or years behind. One workaround emerged in 2009 when the organization provided examples of how established rules could extend to include social media ads, and again in 2017 when hundreds of human influencers were called out for burying disclosures of paid partnerships or omitting them entirely. The FTC released additional guidance for social media influencers in Nov. 2019, though it failed to specifically address virtual influencers. However, an agency spokesperson told CNN that "advertisers using CGI influencer posts should ensure that the posts are clearly identifiable as advertising."
According to Venable LLP Partner Melissa Steinman, the legal agency often provides fresh guidance in informal ways — spokesperson statements, speeches, interviews and letters — to keep apace with rapidly developing trends.
"The FTC may not have come out and made new rules, but the sentiment is there. This is advertising, and it should be treated as such," Steinman said. "The FTC is mostly concerned about whether consumers can clearly tell when something's an ad, and they've indicated that nothing will be that different in the rules around influencers: CGI or flesh-and-blood."
Currently, the agency is observing the landscape around virtual influencers and how well consumers understand their role in advertising before developing definitive rules. The safest move for brands in the meantime is to treat these CGI personas as human influencers and double down on disclosure to avoid legal action or negative brand attention, Steinman said.
"If it feels like you're trying to hide something, that's a red flag. This is an area of consumer protection, and we're all consumers, so disclosure and common sense can go a long way," she said.
What's driving the hype?
Much of what's powering these virtual characters' emergence is fatigue around their human predecessors. Influencer marketing has long surpassed the threshold as a buzzy trend and is now a mainstream tactic that's nearing saturation on platforms like Instagram. Despite concerns around overcrowding, influencer marketing spend was forecast before the pandemic to surge to $15 billion by 2022 from $8 billion in 2019.
As more brands double down on working with these typically young, stylish tastemakers who have amassed extensive online followings, consumers are beginning to show signs of influencer fatigue. On Instagram, the top social media platform for influencer marketing, creators saw their engagement rates hover near all-time lows in summer 2019 as Instagram grew congested with sponsored posts, per a study by analytics firm InfluencerDB.
"They're not able to actually use the product ... so how can they really endorse something?"
Venable LLP, partner
Brands responded to this decline by exploring creative ways to renew excitement, which became even more imperative as social platforms like Facebook and YouTube considered removing the "like" count from posts.
While virtual creators have shown significant brand power, they have yet to match that of traditional influencers, according to Gilligan. Perhaps the most recognizable virtual star, Lil Miquela, has amassed 2.5 million Instagram followers since her 2016 debut and has collaborated with brands such as Prada, Calvin Klein and direct-to-consumer athleisure line Outdoor Voices.
Brand safety vs. authenticity
Like traditional influencers, Lil Miquela and her virtual counterparts appeal to brands because of their fast-growing followings, consumer intrigue and consistent social media content that young users can relate to. A key differentiator, however, is brand safety. Even marketers with the strongest influencer partnerships and detailed legal contracts can't predict what human creators do or say. Opting for the CGI type gives brands tighter control over content, whether they run their own virtual stars like luxury brand Balmain or partner with a third-party operator like KFC did in 2019.
But because authenticity is the cornerstone of influencer marketing, can these virtual stars be trustworthy or relatable when someone else is strategically directing their entire existence to foster positive brand image?
"They're not able to actually use the product. Lil Miquela isn't wearing that Calvin Klein shirt. She doesn't wear anything," Steinman said. "Certainly they're not eating, so how can they really endorse something?"
According to T3's Gilligan, virtual influencers are arguably more authentic than the traditional kind. She said users are savvy enough to recognize that virtual influencers are used as extensions of brands and, thus, any product mentions are ads. Hundreds of human creators have been hit with FTC warnings for burying or omitting disclosures, prompting users to now question any product endorsement on social media, even if they appear to be organic.
"We know their content is a direct byproduct of a brand. Their intentions are not hidden, so us users can kind of let our defenses down," Gilligan said. "Instead of having brands be hidden puppet strings behind [human] influencers we consider relatable, maybe we prefer them to own it and just create their own so we can filter through that content and not make us question [human] influencers' motives."
Murky legal landscape
The bigger question, according to Steinman, is whether brands should be required to disclose that these influencers are not human. Lil Miquela and her fellow CGI characters look almost real, but there's still enough nuance where the average consumer may be unsure. That gray area introduces opportunities for riskier brands to go rogue, using the lack of clear FTC guidance as a loophole around fully disclosing partnerships.
"If consumers can't clearly tell that these influencers are virtual, then you really should be disclosing that on top of any paid relationship between the advertiser and the influencer's creator," Steinman said.
Risk-averse brands can avoid damaging press or potential private litigation by over-disclosing while the FTC clarifies its rules, she said.
Other legal considerations when working with virtual influencers include standard contractual agreements around intellectual property ownership, trademark licensing, copyright, compliance and a moral clause, which outlines behavioral standards for paid partners to safeguard brand reputation. If a virtual influencer breaks the agreement, Steinman suggests marketers treat the situation as they would for a human creator.
Aside from a terminated partnership, brands whose CGI influencer crossed the line could face fines, class action or private lawsuits, and a headache-inducing level of bad PR. Steinman expects consequences for virtual creators' misdeeds to mirror that of human influencers, where the first few cases usually serve as industry examples with no monetary fines, but beyond that, potential penalties could cripple a brand.
"Legal orders that bind a company to not engage in similar behavior can last years or decades," Steinman said. "Nobody, especially in the technology age, wants to be restricted to what they can and cannot do when it comes to marketing on social media or elsewhere."
"When I think about gaming, I think it's like the new 'Netflix and chill' for us. Grubhub and gaming go hand in hand," VP of Brand Marketing and Creative Jessica Burns said.
By: Natalie Koltun
People are hungry for captivating images when they're browsing online for somewhere to eat. Restaurant websites, Yelp, OpenTable and the like are go-to hubs for food inspiration, but much of the visual content on those platforms comes from the restaurants themselves. Often, beautiful photos draw in customers who are later disappointed with sub-par dishes.
To sidestep this issue and serve up more candid visuals from real diners, delivery startup Grubhub leans into user-generated content (UGC) on Instagram with the goal of making consumers crave a treat and order, VP of Brand Marketing and Creative Jessica Burns explained on an Advertising Week panel in September 2019. The platform has also started to experiment with gaming platform Twitch, in part because of how it differs from Instagram and rounds out Grubhub's influencer strategy.
"The best way to describe Instagram in the Grubhub world is 'our digital mood board of food porn,'" she said.
Much of the company's UGC on Instagram comes from influencers and foodies, who appeal to Grubhub because they deliver more trustworthy restaurant reviews than traditional advertising. However, the image-sharing app isn't always the best platform within Grubhub's influencer equation, as it's sticky but static, according to Burns.
"You have channels that are very static but scalable, like the LinkedIns and Twitters of the world, and then you have channels that are very dynamic — I would say risky — and they're really hard to work on and develop work for … Instagram sits in between," she said.
Instagram is the most popular platform for influencer marketing. More than 500 million people — half the platform's monthly user base — check the site daily, which could spur impulse orders from food delivery platforms like Grubhub.
While brands tend to use influencers on Instagram to authentically tell stories that connect with a loyal audience, mostly static content, lack of sound and distracted viewing makes doing so quite challenging despite the platform's massive user base, The Outloud Group's Chief Growth Officer Bradley Hoos said on the panel.
Video killed the Instagram star
Grubhub used these insights to transition some of its influencer dollars to video and explore marketing channels that deliver higher engagement by breaking through the clutter that's mounting on Instagram.
"If a picture is worth 1,000 words, a video is worth 1.8 million," Burns said.
Twitch is a key platform Grubhub has experimented with in recent years, she said, highlighting the shared demographic of millennial men — a notoriously fickle cohort. The Amazon-owned gaming site sees around 15 million daily active users, 81.5% of which are male, according to MediaKix. It captures an ultra-engaged audience compared to other channels, with streamers spending an average of 95 minutes per session.
"When I think about gaming, I think it's like the new 'Netflix and chill' for us. Grubhub and gaming go hand in hand," Burns said.
Despite the channel's captive audience that aligns with Grubhub's target customer, Twitch's homepage is chaotic with movement and measurement is nebulous, she explained. Grubhub's approach to influencer marketing on Twitch is grounded in experimentation to test what tactics work best on the nascent platform. Previous trials by the food delivery service include brand integrations with creators, where Grubhub tracked session traffic after those integrations to measure cost-per-response and optimize over time. That strategy has gleaned useful insights into which creators are most effective for a partnership, the appropriate number and timing of Grubhub mentions and identifying specific games to focus on.
Twitch possesses both challenges and opportunities unique from other influencer-centric channels, according to Burns, who emphasized the need for constant experimentation.
"You have to provide some loose guidelines for these streamer integrations, but you can't handcuff them, either," she said. "You have to say a little prayer and let them do their thing."
Article top image credit: AWNewYork/Shutterstock
Gen Z prefers influencers who fit into their 'social bubble,' study says
By: Robert Williams
Generation Z and millennial consumers tend to follow social influencers who they consider most authentic and relatable, per a survey by market researcher Cassandra. When deciding to follow an influencer, 89% of young consumers said it's important that the influencer seems like a nice person, while 86% want to feel that the influencer "isn't just trying to sell them something," the survey found.
Eighty-six percent of respondents said they follow influencers who make their day better or improve their mood, while 85% said it's important that influencers they follow try to make the world a better place and are people with whom they'd want to hang out, the survey found.
Cassandra's research on the influencer following activities of Gen Z and millennials indicates that young consumers are looking for people who they can trust to provide good advice. That's an important characteristic amid a social media environment that's flooded with misleading information, fake news and inflammatory content. For brands that are developing an influencer marketing strategy to reach these young and increasingly valuable consumers, it's important to vet those influencers to ensure they'll make good brand ambassadors.
Authenticity has become a more important theme amid growing concerns that influencer marketing is associated with misleading advertising. In early 2020, the Federal Trade Commission (FTC) took a key step toward cracking down on marketers that disguise paid advertising as authentic reviews or endorsements from an influencer. The agency voted to seek public comment on whether to update its rules on the use of testimonials in advertising. The concern comes as spending on influencer marketing is forecast to reach $15 billion by 2022 from $8 billion last year, Business Insider Intelligence estimates based on Mediakix data.
While fashion and lifestyle influencers are most associated with consumer purchase activity, Cassandra's data indicates that influencers in categories such as beauty, interior design and video games also have followers who are more likely to buy products. Eighty percent of people who follow these influencers buy beauty and grooming products, followed by fashion and style (74%), meditation and mindfulness (71%), books and literature (68%), interior design (68%) and health and wellness (66%).
Kylie Jenner, Huda Kattan, Zach King and James Charles are among the personalities who have parlayed their massive social media audiences into lucrative endorsement deals with major brands. However, microinfluencers with audiences as small as a few thousand followers are also important to marketers' influencer strategies. Microinfluencers comprise 40% of brands' annual influencer spending versus 28% for celebrity influencers, Rakuten Marketing found in a 2019 survey.
Instagram IGTV tests video ads to support monetization for influencers
By: Robert Williams
Instagram is testing features to help influencers make money, a departure from its limits on direct monetization for popular personalities on the photo-sharing app. The features include ads in IGTV videos, digital badges that fans can buy on Instagram Live, product sales from Instagram Shopping and an expansion of the Brand Collabs Manager that helps to connect sponsors with creators on campaigns, per a blog post by the platform.
IGTV's ads are geared for mobile viewing and can be as long as 15 seconds. They will appear when viewers tap to watch videos from previews that appear in their IGTV feeds. Instagram will test the ads throughout 2020, including the ability to make them skippable for viewers.
Influencers can monetize their posts by selling badges that include heart-shaped icons that appear in Instagram Live videos. Viewers can pay $0.99 for a single heart, $1.99 for two or $4.99 for three, though they are limited to buying one badge each during a livestreamed video. The badges appear next to the viewer's name in the video, helping creators see their supporters, TechCrunch reported.
Instagram's test of monetization features for influencers may alter how mobile marketers work with popular personalities who help to keep audiences engaged with the photo-sharing app. Influencers who can make more money creating videos and livestreams for IGTV will have greater incentive to post more frequently and to improve the quality of their work. Those incentives can spur a virtuous cycle of higher viewership and engagement that appeals to advertisers who collaborate with creators or buy ad inserts in videos.
IGTV was introduced in 2018 as a standalone app to feature long-form videos from creators and publishers, but the app hasn't gained much traction among Instagram's user base of more than 1 billion. Only 1% of Instagram users had downloaded the IGTV app as of January 2020, per research that TechCrunch commissioned from Sensor Tower. The difficulty in boosting its audience led Instagram to remove an IGTV button from the home page of its app in early 2020.
However, the coronavirus pandemic led to a surge in Instagram viewership among homebound consumers who rely on their smartphones for entertainment and to stay in touch with the outside world during lockdowns. Creators of videos on Instagram Live saw a 70% increase in views from February to March 2020, per the company's blog post. Brands such as Cholula Hot Sauce, McCormick and PepsiCo's Tostitos have sponsored Instagram Live events to entertain viewers and raise money for pandemic relief efforts. It remains to be seen whether IGTV can convert and maintain that Instagram Live viewership once lockdowns end and people gradually leave their homes more often.
The IGTV badges can help lesser-known influencers to develop another revenue stream from their videos, as rivals like Amazon's Twitch, ByteDance's TikTok and Google's YouTube already have done. While Instagram is a major influencer marketing platform, its notable personalities have had to seek their own sponsorship deals with advertisers instead of soliciting direct support from fans. Kylie Jenner, the reality-TV star and cosmetics entrepreneur, is one of the most prominent celebrities to parlay her popularity on Instagram into million-dollar sponsorships of her posts.
The growing array of programs for creators offered by Instagram is likely to urge more influencers to create videos for the platform, giving mobile marketers more opportunities to participate in collaborations with influencers and to reach engaged audiences.
Article top image credit: Retrieved from Instagram on May 28, 2020
You & Mr Jones buys influencer marketing agency Collectively
By: Robert Williams
Startup You & Mr Jones bought influencer marketing agency Collectively in early August to expand services for brands seeking to work with social influencers. Terms of the deal weren't disclosed.
You & Mr Jones will combine Collectively with TheAmplify, the influencer marketing firm it acquired in 2016. Adobe, Coty, Danone, De Beers, Diageo, HP, Intuit, LinkedIn, NFL, Old Navy and Unilever are among the clients of the newly combined company, which will operate under the Collectively brand.
Collectively co-founder and CEO Ryan Stern will lead the merged company. Her management team will include TheAmplify CEO Amy Luca, who will be president and head of international, while Collectively co-founder and executive vice president Alexa Tonner will be COO, according to the announcement.
You & Mr Jones' acquisition of Collectively is a sign of how influencer marketing continues to be a growth strategy for advertisers seeking to cut through ad clutter by working with social media personalities with dedicated followings. You & Mr Jones' TheAmplify saw 50% growth during the first six months of 2020, contrasting with the pullback among major ad holding companies like Interpublic, Omnicom and Publicis that reported double-digit declines in revenue as marketers slashed spending in the coronavirus pandemic's early days.
You & Mr Jones saw 27% revenue growth during the first half of 2020, and was valued at $1.3 billion in a $200 million funding round in 2019. The acquisition of Collectively marks its latest investment in the influencer marketing industry after participating in a venture capital round for influencer relationship management startup Traackr in 2018. In 2017, You & Mr Jones disclosed an investment in Tribe Dynamics, an influencer platform that ties press coverage to sales, The Wall Street Journal reported at the time. David Jones, the former CEO of advertising giant Havas, founded You & Mr Jones in 2015 with a $350 million investment and positioning around leveraging technology for marketing.
Before the pandemic, spending on influencer marketing was forecast to reach $9.7 billion in 2020, with 66% of marketers planning to boost their influencer budgets, per a survey by CreatorIQ and Influencer Marketing Hub. The pandemic led to a slight dip in influencer campaigns in March, but there were signs of a gradual recovery in ensuing months as marketers targeted homebound consumers, a Forrester study indicated. Marketers used influencer campaigns for creative work and content that was unavailable from advertising agencies when pandemic lockdowns began, the firm found. Procter & Gamble's Bounty brand of paper towels, E.l.f. Cosmetics, Häagen-Dazs, Hollister and Macy's are among the companies that enlisted influencers in 2020 campaigns.