In 1997, Sidney Frank once again relied on an influencer outreach program for Grey Goose vodka, a strategy that helped establish the superpremium liquor category. Today, the preferred method of influencer marketing, or reaching trendsetters, tastemakers or whatever in-crowd term you prefer, uses the leverage of social media.
E-fluentials and Trendsetters
The value of online influencers was described in a July 2000 Burson-Marsteller study, dubbed “E-fluentials,” which found that 8% of the internet population, or about 9 million users at the time, were “e-fluentials.” Projected onto the current U.S. internet population of 287 million, which in turn is based on a U.S. population of 325 million, the number of E-fluentials has more than doubled today to 23 million.
Several studies place the share of influentials slightly higher. The Burson-Marstellar report points to research conducted by Roper Starch since the 1940s, which found that “influential Americans” account for 10-12% of the general U.S. population, but have an impact twice as large as their population size.
That influencers have a disproportionate amount of political clout was detailed in a 2004 study, called “Communicating With Congress,” created for Blue Shield and Chevron (PDF), which describes their influence this way:
“A 2004 report by The George Washington University Institute for Politics, Democracy, and the Internet (IPDI) found that people who use the Internet to become politically engaged are far more likely than average citizens to be ‘Influentials.’ Influentials — a term coined by the RoperASW market research firm — are people who ‘tell their neighbors what to buy, which politicians to support, and where to vacation.’ Influentials are thought leaders in their communities. They join organizations, attend meetings, try to persuade others of their points of view, and become engaged in political action. Typically, about 10% of the general public can be considered Influentials. Among Internet users, 13% can be considered Influentials.”
RoperASW’s distinction between online and offline influencers is key because several online articles confuse the two. The 2004 RoperASW data, cited in the IPDI report, suggests that today’s offline influentials universe is 33 million (10%), who could influence as many as 66 million Americans.
The RoperASW online estimate of 13% results in an online influentials universe of 37 million, able to impact as many as 74 million Americans. Not only is the online influencer impact group larger than the offline group but let’s face it, if you’re not online today, you’re legally dead. 😜 That’s a market size that should satisfy just about any start-up or existing brand.
Another perspective on the avant-garde was provided in 1999 by Young Rubicam’s Brand Futures Group (BFG), which released a report that attempted to classify “the most open-minded, forward-thinking, and imaginative individuals, American Trendsetters.”
BFG, then headed by Marian Salzman, found that trendsetters were “typically independent, opinionated, self-employed, well-educated, and well paid, people who picked up on what’s happening before it happens — and, in so doing, make it more likely to happen.”
The BFG study also established the share of trendsetters at one-tenth of the population: “10% of the population are individuals who are self-assured, pointed to the future, interested, unconventional people, able to pick up the vibes of the time in which they live and, as a result, point to the future trend.”
BFG’s composition estimate matches that of earlier Roper Starch studies and the study conducted by its later namesake, RoperASW, mentioned in the George Washington University report. While an influencer and a trendsetter are not necessarily one and the same, and may also be mutually exclusive of another popular label today, “innovator,” a 1988 study by MTV points to many similarities, in particular, the “genuine revelation of self and others”:
Given that most social media influencers arrived at each medium early to build their sizable followings, one can safely assume that the social media influentials and trendsetters audiences largely mirror each other, due to the propensity of early adopters to gather at new digital water coolers like Instagram.
Facebook’s launch of its Open Graph protocol in April 2010 gave influencer outreach a big shot in the arm, allowing outside developers to access the rich profile data of Facebook members, something many refer to as the “social graph.”
Facebook popularized the term “social graph” at its F8 developers conference on May 24, 2007, when it was used to explain the benefits of the new “Facebook Platform.”
As Facebook put it, “the social graph offers a richer online experience by leveraging relationships between individuals.” Translation: we now offer customized advertising. While outlining the company’s ambitious plans to map people’s relationships and the things they care about, Facebook CEO Mark Zuckerberg called the third iteration of the Facebook Platform the “Open Graph.” The addition of “Open” reflects an expansion of the social graph to all internet users.
The value of the open or social graph is well documented. Social media users are not only more likely to recommend and buy brands, but their friends are also likely to follow suit. Nearly 68% of consumers say that a “positive referral from a Facebook friend makes them more likely to buy a specific product or visit a certain retailer,” reports Morpace.
Open Graph Evolution
|Facebook Platform||24-May-07||400,000 developers (06/08)||24,000 apps (06/08)|
|Facebook Connect||09-May-08||80,000 sites (04/10)||100.0M end-users 04/10|
|Facebook Open Graph||21-Apr-10||2.5 million sites (05/11)||2.0B likes/day (12/10)|
|21-Apr-10 CNET; Jun. 2008, Apr. 2011 Facebook; Dec. 2010 Simon Cross/Le Web Workshop; May 2011 SearchEngineLand|
Social Media Influencers
That social graph has powered influencer outreach to dimensions far beyond the wildest dreams of Sidney Frank. “Influencers are the golden children of marketing strategies right now,” croons Deborah Weinswig in Forbes. Meanwhile, a Bloomberg article cites a wild estimate by an outfit called Capitiv8 that claims that $255 million is spent each month on Instagram influencer marketing alone.
That would nearly match Instagram’s total 2016 ad revenues, which were estimated at $3.2 billion. eMarketer provides a more down-to-earth estimate of Instagram influencer marketing revenues in 2016: $570 million.
That projection is influenced, pardon the pun, by such Instagram megabrands as Beyoncé, whose social media posts are said to be worth $1 million each, based on her 100 million followers and brand authenticity.
A more realistic pricing model might be the reported sums paid Kim Kardashian, who has 80 million followers and was said to charge $10,000 for each sponsored post. Vine star Logan Paul was paid $200,000 for directing and starring in several clips for Dunkin’ Donuts. According to the company, those clips generated the same reach as a prime time network commercial and got more than 750 million overall views.
Beyoncé’s pregnancy announcement in February 2017 broke the record for most liked Instagram post with nearly 11 million likes. Still, Instagram’s most popular user is Selena Gomez who has attracted 118 million followers. This despite the fact that Gomez readily admits that she doesn’t even like Instagram.
A sponsored post of Gomez drinking a Coke, this article’s lead image, was the most-liked photo on Instagram for almost a year — with 6.5 million likes and 276,000 comments — before Beyoncé’s pregnancy announcement outperformed her in February 2017.
Facebook, Instagram are influencers’ favorite social platforms. That should not be surprising given that most influencers use photo and video content when marketing on behalf of brands. What is surprising is that only 10% of influencers cited Pinterest, a content sharing service that’s all about images and videos. In fact, more respondents considered Twitter to be the best social media platform:
But there is a fly in the influencer ointment. The Federal Trade Commission is planning to crack down on influencer posts that do not properly disclose that they’re getting paid to promote a product or service, stating that hashtags like #ad, #sp, #sponsored, which are common forms of sponsored post identification, are not always enough.
The FTC move will put a significant crimp in the effectiveness of influencer outreach programs because posts that show that a celebrity or influencer is shilling for a brand may materially reduce the effectiveness of said posts.
The trust value of influencers is already in doubt. One Influencer Orchestration Network article misstates a Nielsen study suggesting that “92% of people trust recommendations from individuals (even if they don’t know them) over brands,” — emphasis added. The actual Nielsen study clearly states it’s “family members and friends” only.
Inherent biases should keep marketers alert. Another example of bias is the widely cited study that surfaced in December 2016 claiming that “53% of women made purchases due to influencer posts.” This study was sponsored by Bloglovin — “a media platform that connects consumers with their favorite influencers.” We do not provide links to these studies because they do not deserve any more publicity.
There are already “cracks in the foundation,” as Digiday puts it, due to a growing decrease in effectiveness of influentials.
As the saying goes, where there’s smoke there must be fire. The beauty of influencer outreach is that it relies on one of the internet’s most ballyhooed principles, the “one-to-many” relationship.
Having many followers does not necessarily equal having a lot of influence. “The Million Follower Fallacy” study by Meeyoung Cha at the Max Planck Institute suggests that the number of Twitter followers is largely meaningless. After looking at data from all 52 million Twitter accounts in existence at the time, including 6 million “active users,” the study concluded that popular users with a large number of followers do not necessarily influence the number of retweets or mentions.
A Vocus-Futureworks study of 739 communications and marketing professionals sought their opinions on what makes an influencer. Asked to choose the type of social networker who would have the most measurable effect on an outcome, 57% picked someone who has “a handful of fans/friends/followers that are tightly connected,” versus 8% who picked someone with “millions of fans/friends/followers with little or no connection,” in other words quality wins over quantity.
Despite this prevailing sentiment, marketers appear hell-bent on shoring up their social media profiles by engaging users with many friends and followers. In the same Vocus-Futureworks study, 57% said that they’d be willing to pay for influencers to help them “drive actions or outcomes.” That was back in 2010…
Value and ROI
A study of marketing professionals conducted by Minnesota-based Tomoson says marketers are reportedly making $6.50 for every $1 spent on influencer marketing.
Tomoson also reports that marketers are very “bullish” on influencer marketing, rating it as their fastest-growing online customer-acquisition channel, outpacing organic search and email marketing.
Once again, you have take results like these with a grain of salt because Tomoson is a, sit down for it, influencer marketing outfit. 🙄
Because of their bullishness, the cost of influencers is skyrocketing. Some 62% of marketers surveyed say competing with other brands for the attention of social media influencers is a major challenge.
Another big influencer marketing challenge, mentioned by 61% of marketers, is identifying the right influencers who can truly help a brand or campaign, according Augure, now known as Launchmetrics.
Finally, accurately measuring the ROI of influencer campaigns is another major issue, with 44% of marketers citing it as a significant challenge.
Influencer marketing is so hot that both Amazon and Time Inc. are said to be working on influencer programs, the latter recently launching a social media influencer partnership with Speakr.
That Amazon would create its own influencer program is no surprise given its launch of Echo Look, which is squarely aimed at the style influencers that Instagram is famous for.
According to a November 2016 survey of 170 marketers by marketing solutions provider Linqia, 48% of practitioners said they plan to boost their influencer-focused marketing budget in 2017. Just 4% said they plan to decrease investment in this area. Note that Linqia is an influencer outreach solution provider and is highly likely to supply research that supports its mission.
A bevy of influencer analytics firms provides metrics on something once thought difficult to measure: the influence social mavens have over fellow networkers. That social hierarchy maps directly to the social graph, explaining the growing popularity of this pursuit.
Each company works mainly the same way. They obtain public information, mostly from the Twitter “fire hose” tweet stream, but also from Facebook and possibly LinkedIn, and combine obtained data with proprietary formulas to generate scores that gauge a user’s influence. You might think of it as the influencer’s “credit score.”
Klout was the first service to rate social media users with such an influence score. Visitors to its site can obtain free reports after entering their social networking credentials. Klout ranks users on a score of 0-100, which is based on such parameters as “reach” and “amplification.”
These metrics are influenced by user activity and whether their tweets are re-tweeted by other influentials, in other words, their impact on the social graph. An early example of the successful use of Klout scores was a 2010 case study of the Las Vegas’ Palms Hotel.
Palms Chief Marketing Officer Jason Gastwirth created “The Klout Klub,” which was designed to “allow high-ranking influencers to experience Palms’ impressive set of amenities in hopes that these influencers will want to communicate their positive experience to their followers.”
Because Klout scores are largely impacted by follower counts, and a number of followers is not indicative of a social media user’s capability to influence, the company has lost a lot of its early buzz. That explains why only 9% of marketers see Klout as a valid method for identifying the influence of a social networker.
With Amazon and a host of new players jockeying to harness the power of influencers, expect a wave of changes to wash over this virgin territory. Today, we know of at least 21 firms that specialize in targeting and optimizing influencer campaigns.
Their web pages, which we have reproduced in the gallery below, speak volumes about their targeting and marketing sophistication. Given that the internet is your only storefront, we advise you to pay particular attention to the finesses expressed in these digital outposts. Also note the absence of a secure site — an https connection is mandatory these days…
There’s no question that influencer marketing has progressed markedly from the heydays of the Jagerettes. Let’s hope that the drink today’s influencer marketing firms are pouring down the throats of marketers does not turn out to be Kool-Aid.
Ed.: What do you think about influencer marketing? Are you using it at your company or agency? Please comment below.