Ever heard of PewDiePie? How about Zoella? Between them these so-called “influencers” command over 100m subscribers across myriad social media platforms.
City A.M. interviewed our own Pete Longhurst about the evolution of influencer marketing. Enjoy the read!
It was never going to be long before advertisers and marketers saw the potential to use the organic reach of social media sensations to promote their customers’ products. Now exists an industry dedicated to connecting brands with influencers, who will promote products to their fans in return for a fee.
The market is estimated to be worth $5-10bn (£3.8-7.6bn) in the next five years. “What we’re moving into now is a world where consumers are explaining brands to other consumers”, says Pete Longhurst, chief executive of The 7th Chamber, a Shoreditch-based agency that connects influencers with brands.
According to the Incorporated Society of British Advertisers (ISBA), 92 per cent of consumers turn to people they know for recommendations above any other source, and YouTube stars are seen as 90 per cent more authentic compared to mainstream celebrities.
“The difference with an influencer is that the message being broadcast is one that you have chosen to follow. It normalises brands because when you follow a person that you admire, you like what they talk about; it gives it authenticity”.
How does it work?
The industry is disruptive, adaptive and is making the most of social media as a tool for connecting brands with consumers. But finding the right influencer for the right campaign isn’t straightforward. The 7th Chamber works with a database of 9,000 influencers, who Longhurst says have a collective global reach of 600m people.
Using a custom audience intelligence platform, the firm analyses demographic, psychographic and other behavioral patterns across social media to correlate the interests of consumers, influencers and brands. Using the data gathered, they “align influencers to campaigns that they and their followers are personally interested in”.
“Advertising has always been about reaching the right people with appropriate content”, says Longhurst. “We know what people are interested in, who they follow, what they’re likely to buy – it’s the evolution of advertising.”
There has been industry-wide criticism of how brands quantify the return on investment (ROI) of influencer campaigns. “Like any other company, we’ve got to offer something that adds value to the campaign”, says Longhurst. “Brands want to know exactly what they’re going to get.
“We often talk about interactions. That means likes, shares, views, comments and tweets combined. Typically what we’ll do is provide a guarantee of the minimum number of interactions.”
Influencer marketing is as data driven as any other digital marketing. “We can see how much traffic has been generated by an individual influencer by tracking the consumer path,” Longhurst explains. When a consumer is exposed to a piece of influencer content and clicks through to the brand’s website, the journey is tracked to quantify a return.
“Every time a massive influencer posts a video involving a product, for those brands, it’s like a small herd of elephants stampeding to their site.”
The industry isn’t without its ethical discrepancies – the Advertising Standards Authority (ASA) has dealt with countless cases regarding influencers failing to label the content they produce as being sponsored.
The rules for misleading content are the same for influencers as any other form of advertising, but much harder to enforce, owing to the nature of user-generated content. Brands and advertisers have to accept a loss of control to retain the authenticity that has driven the market so far, which is why ISBA has come up with a vlogger contract.
This is a legal framework to determine how much control brands have over what influencers say and do. It does not, however, go as far as determining how creators should be highlighting sponsored content.
“It’s not the Wild West people make it out to be, but that’s why the rules are so important – because there’s a real danger it can become the Wild West”, says Longhurst. “Not playing by the rules discredits the industry at a time when it’s trying to evolve. All of us would be damaged – we wouldn’t be seen as a credible partner, the brand will be hauled in front of the press, and the influencer would have a blotch against their name”.
Any embryonic industry requires careful navigation, but Longhurst believes that influencers will play a major role in the future of advertising. “It’s exciting and makes some people nervous. In the world we’re leaving now, it’s all about brands talking down to consumers, telling them what to do – it’s a bit of an afront.”
Part of the draw of influencers is that, in a world where traditional forms of digital advertising are increasingly unappealing, “people can relate to influencers. They listen to them and have a choice whether to engage – it’s like a digital word of mouth, or taking advice from a friend.”
Original article, by Elliott Haworth, business features writer at City A.M, covering marketing, data and small business.