Influencer marketing

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Influencer marketing (a.k.a. influence marketing) is a form of social media marketing involving endorsements from influencers, people and organizations who possess an expert level of knowledge and/or social influence in their respective fields.

Influencer content may be framed as testimonial advertising where influencers play the role of a potential buyer themselves, or they may be involved as third parties. These third parties can be spotted either within the supply chain (retailers, manufacturers, etc.) or among the so-called value-added influencers (such as journalists, academics, industry analysts, and professional advisers).[1]

Social influence[edit]

Most discussion concerning the generic subject of social influence focuses on compliance and persuasion in a social environment.[2] In the context of influencer marketing, influence is less about argument and coercion to a particular point of view and more about loose interactions between various parties in a community. Influence is often equated to advocacy, but may also be negative, relating to the concepts of promoters and detractors.[3]

The "two-step flow of communication" concept was introduced in "The People's Choice" (Paul Lazarsfeld, Bernard Berelson, and Hazel Gaudet, a 1940 study on the decision making process of voters). This idea was further developed in "Personal Influence" (Lazarsfeld, Elihu Katz 1955)[4] as well as "The Effects of Mass Communication" (Joseph Klapper 1960)[5].

Influencers[edit]

There is a lack of consensus on what an "influencer" is. One writer defines them as "a range of third parties who exercise influence over the organization and its potential customers".[6] Another defines an influencer as a "third party who significantly shapes the customer's purchasing decision, but may never be accountable for it."[1] Another says influencers are "activists, are well-connected, create an impact, have active minds, and are trendsetters",[7] though this set of attributes is aligned specifically to consumer markets.

Sources of influencers can be varied. Marketers traditionally target influencers who are easy to identify, such as press, industry analysts and high-profile executives. For most B2C purchases, however, influencers might include people known to the purchaser and the retailer staff. In high-value business-to-business (B2B) transactions the community of influencers may be wide and diverse and might include consultants, government-backed regulators, financiers, and user communities.

Forrester analyst Michael Speyer notes that, in the case of small and medium-sized businesses, "IT sales are influenced by several parties, including peers, consultants, bloggers, and technology resellers".[8] He advises that "Vendors need to identify and characterize influencers inside their market. This requires a comprehensive influencer identification program and the establishment of criteria for ranking influencer impact on the decision process."

Similar to a set of diverse influencer sources, influencers can play a variety of roles at different times in a decision process. This idea has been developed in influencer marketing by Brown and Hayes.[1] They are capable of mapping out how and when particular types of influencers affect the decision process. This then enables marketers to selectively target influencers depending on their specific nature or domain of influence.

Identifying influencers[edit]

Market research techniques can be used to identify influencers, using pre-defined criteria to determine the extent and type of influence.[7]

  • Activists: Influencers that get involved with their communities, political movements, charities and so on.
  • Connected: Influencers that have large social networks.
  • Authoritative: Influencers that are counted upon and are trusted by others.
  • Active minds: Influencers that have multiple and diverse range of interests.
  • Trendsetters: Influencers that tend to be the early adopters (or leavers) in markets.

Malcolm Gladwell[9] notes that “the success of any kind of social epidemic is heavily dependent on the involvement of people with a particular and rare set of social gifts”. He has identified three types of influencers, who are responsible for the "generation, communication and adoption" of messages.:

  • Connectors network across a variety of people, and thus have a wider reach. They are essential for word-of-mouth communication.[10]
  • Mavens look to utilize information and share it with others, and are extremely insightful with regards to trends.[10]
  • Salesmen are "charismatic persuaders". Their source of influence leans toward the tendency of others to attempt to imitate their behavior.

Currently, most of the subject matter on influencers focuses on consumer markets, rather than business-to-business influencers. A key distinction is that most of the focus in consumer markets is on consumer influencers themselves, primarily because word-of-mouth communication is prevalent in consumer environments.[1] In business marketing, influencers are people who affect a sale, but are typically eliminated from the actual purchase decision. Consultants, analysts, journalists, academics, regulators, and standards bodies can be considered as few examples of business influencers.

Influencers can also be defined by the number of followers they have. Influencers with a large following mostly include celebrities with a strong reach. Sometimes these influencers can command six- or seven-figure fees for a single post.[11]

Businesses are striving to pursue people who aim to lessen their consumption of advertisements and are willing to pay such influencers a higher amount. Targeting influencers is seen as a method of increasing the reach of marketing messages, in order to counteract the growing tendency of prospective customers to ignore marketing efforts.[7]

Payment[edit]

Most influencers are paid upfront prior to the start of a marketing campaign while others are paid after the execution of the marketing campaign.[12]

Social media[edit]

Online activity can be considered a core part of offline decision-making, as consumers research products and review websites.[13]

Critics of this online-intensive approach argue that researching around just the online sources misses critical influential individuals and inputs.[1] They note that much influential exchange of information occurs in the offline world, and is not captured in online media. Indeed, the majority of consumer exchanges occur face-to-face rather than, in an online environment, as proven by Carl.[14] He notes that "an overwhelming majority of word-of-mouth (WOM) episodes (nearly 80%) ... occur in face-to-face interpersonal settings, while online WOM accounted for just around seven to ten percent of the reported (WOM) episodes."

Carl concludes that "The majority of the WOM action still seems to be happening in the offline world. These findings are especially provocative since they appear at a time when more and more organizations are paying attention to how their brands are discussed online, and; recent academic research has focused on online WOM. Thus it is important for organizations to keep online as well as offline conversations on their radar screen."

Keller Fay announced in 2007 that "While experts have previously estimated that 80% of marketing-relevant word-of-mouth takes place 'offline' (i.e., face-to-face or via telephone), the latest results indicate that this figure could be even higher – 92%." [15][7]

More recently, Nate Elliott from Forrester observed that "the huge majority of users influence each other face to face rather than through social online channels like blogs and social networks." [16]

With any marketing strategy, risks are involved; and there have been reports of brands dropping their influencers because of the controversies that surround them. One such influencer is YouTuber PewDiePie, whose use of antisemitic and racist comments led to canceled deals from Disney and a widespread backlash.[17][18][19]

Applications[edit]

Few marketers use influencer marketing to establish credibility in the market, while others use the same to create social conversations around their brand. There are also still others who attempt to drive online or in-store sales of their products. The influencer marketer can also switch to marketing diversified products and services, leveraging upon the credibility earned over time. The value which influencer marketing creates can be measured in several ways. Some marketers measure earned media value, others track impressions[20], while there are few others who track cost per action.[1]

Regulation[edit]

In the United States, influencer marketing is treated by the Federal Trade Commission (FTC) as a form of paid endorsement, governed under the rules for native advertising; the advertising agency complies with the established truth-in-advertising standards to such advertising and fulfills requirements for disclosure on the part of endorsers (influencers).[21][22] In 2017, the FTC sent out more than 90 letters to influencers (namely celebrities and athletes) reminding them of their obligation to disclose sponsored posts.[23] One practical impact of the FTC's action was Instagram's 2017 feature which inserts a "paid partnership" mention at the very top of an Instagram post by an influencer.[24]

Media-regulating bodies in other countries, such as Australia, have created guidelines around influencer marketing following the decision of the FTC.[25] In the United Kingdom, a voluntary agreement was announced on January 2019 between the country's Competition and Markets Authority and high-profile social media influencers to ensure that all of them comply with consumer law.[26]

Fake influencers[edit]

Fake influencers have been around for as long as their real counterparts. All criteria used to determine the veracity of an influencer account can be fabricated. Instagram has shut down third-party sites and apps which provide paid services to individual accounts for buying followers, likes, comments and more.[27]

A marketing agency researched to test whether fake influencer accounts can profit. The company created two fictitious accounts - with their presence built up through paid followers and engagement (likes and comments) - and applied to campaigns on popular influencer marketing websites. They published their results with a step-by-step explanation of how the false accounts were created and the brands which had sponsored them.[28]

An analysis involving over 7,000 influencers across the UK revealed about half of their followers, in turn have up to 20,000 followers, are "low-quality"; on account of inclusion of mass followers, internet bots, and other-accounts that seem suspicious. As such, more than 4 of 10 engagements with this group of influencers are "non-authentic".[29]

A study of UK influencers which looked at almost 700,000 posts from the first half of 2018 found that 12% of UK influencers had bought fake followers.[29]

Virtual influencers[edit]

Virtual influencers are sometimes considered fake influencers too, given their profiles do not correspond to real individuals. It can be argued, however, their presence and role on the platform are different, in the sense they are not automated (bots) nor implemented with the purpose of generating fake likes, fake comments, fake followers or in any way tampering with the platforms where they are created. Simply put, virtual influencers are virtual characters purposefully designed by 3D artists to look like real-life people attending real-life events or situations.[30] Most of these characters' publications are easily distinguished as computer graphics, but some users may be caught off-guard by better polished images.[31]

These characters are usually portrayed as models, singers or other celebrities, and their creators write their lives narratives, answer interviews on their behalf, and interact as if they were the characters themselves.[30]

See also[edit]

References[edit]

  1. ^ a b c d e f Brown, Duncan and Hayes, Nick. Influencer Marketing: Who really influences your customers?, Butterworth-Heinemann, 2008
  2. ^ Cialdini, Robert. Influence: Science and Practice, Allyn and Bacon, 2001
  3. ^ Reichheld, Fred. The Ultimate Question: Driving Good Profits and True Growth, Harvard Business School Press, 2006
  4. ^ Katz, Elihu (2006). Personal influence : the part played by people in the flow of mass communications. New Brunswick, N.J: Transaction Publishers. ISBN 978-1-351-50020-3. OCLC 1069711332.
  5. ^ Klapper, Joseph (1960). The effects of mass communication : [an analysis of research on the effectiveness and limitations of mass media in influencing the opinions, values, and behavior of their audiences. Glencoe (Illinois: Free Press. ISBN 978-0-02-917380-0. OCLC 813851873.
  6. ^ Peck, Helen, Payne, Adrian, Christopher, Martin and Clark, Moira. Relationship Marketing: Strategy and Implementation, Butterworth-Heinemann, 1999
  7. ^ a b c d Keller, Ed and Berry, Jon. The Influentials, Free Press, 2003
  8. ^ Speyer, Michael. Identifying IT Buyers’ Hidden Influencers: Finding And Nurturing Your Brand Presence Beyond Your Formal Channels, Forrester Research, 2007
  9. ^ Gladwell, Malcolm (2000). The Tipping Point: How Little Things Can Make A Big Difference. United States: Little Brown. ISBN 0-316-31696-2.
  10. ^ a b Brown, Duncan; Hayes, Nick (2008-01-01). Influencer Marketing: Who Really Influences Your Customers?. Elsevier/Butterworth-Heinemann. ISBN 9780750686006.
  11. ^ "The 75 celebrities and influencers who make the most money per Instagram post, ranked". Business Insider. Retrieved 7 May 2019.
  12. ^ Wiley, Danielle (12 December 2018). "How to Craft an Influencer Marketing Strategy That Will Outperform Traditional Advertising". Adweek.
  13. ^ "McKinsey: The Consumer Decision Journey". Mckinseyquarterly.com. 2013-03-13. Retrieved 2013-04-29.
  14. ^ Carl, W. J. (2006). What’s all the buzz about? Everyday communication and the relational basis of word-of-mouth and buzz marketing practices. Management Communication Quarterly, 19(4), 601–634.
  15. ^ "Keller Fay and OMD Study Finds Offline Word of Mouth More Positive and Credible than Online Buzz". Keller Fay Group. Archived from the original on 24 Nov 2010. Retrieved 2017-10-06.
  16. ^ Elliot, Nate (2009-09-30). "Using Social Media To Create And Amplify Offline Influence". Retrieved 2014-01-30.
  17. ^ Spangler, Todd; Spangler, Todd (14 February 2017). "YouTube Cancels PewDiePie Show, Pulls Channel From Ad Program After His 'Death to All Jews' Stunt".
  18. ^ Solon, Olivia (14 February 2017). "Disney severs ties with YouTube star PewDiePie over antisemitic videos". the Guardian. Retrieved 28 August 2018.
  19. ^ "PewDiePie apologizes for using n-word during live stream". Associated Press. 13 September 2017. Retrieved 28 August 2018.
  20. ^ Schwemmer, Carsten; Carsten, Carsten (2018). "Social Media Sellout: The Increasing Role of Product Promotion on YouTube". Social Media and Society. 4 (3): 1–20. doi:10.1177/2056305118786720.
  21. ^ "Native Advertising: A Guide for Businesses". Federal Trade Commission. December 2015. Retrieved 2 April 2018.
  22. ^ "FEDERAL TRADE COMMISSION 16 CFR Part 255 Guides Concerning the Use of Endorsements and Testimonials in Advertising" (PDF). Federal Trade Commission. November 2010. Retrieved 2 April 2018.
  23. ^ "FTC Staff Reminds Influencers and Brands to Clearly Disclose Relationship". Federal Trade Commission. 2017-04-18. Retrieved 2019-07-18.
  24. ^ "Instagram is testing a new way for celebrities and influencers to identify their sponsored posts". TechCrunch. Retrieved 2019-07-18.
  25. ^ "Clearly Distinguishable Advertising Best Practice Guide" (PDF). AANA. 18 June 2018.
  26. ^ Jane Wakefield (23 January 2019). "Social media stars agree to declare when they post ads". BBC News.
  27. ^ Lintao, Carissa (2017-07-04). "Instagram is cracking down on fake influencers". The Next Web. Retrieved 2017-08-08.
  28. ^ "Here's How Easy It Is to Become a Phony Instagram Influencer". Highsnobiety. 2017-08-08. Retrieved 2017-08-08.
  29. ^ a b "'Blurred lines' - closing in on the influencer frauds". PRWeek. 2018-09-13. Retrieved 2018-09-13.
  30. ^ a b Hsu, Tiffany (2019-06-17). "These Influencers Aren't Flesh and Blood, Yet Millions Follow Them". The New York Times. ISSN 0362-4331. Retrieved 2019-07-19.
  31. ^ Condon, Orlaith. "Meet the CGI influencers that are fooling everyone on Instagram". The Daily Edge. Retrieved 2019-07-19.

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