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Why Influencer marketing is the next big thing?
The Full Story
-Article by Nihal Abhishek & Sourabh Moitra
Influencer marketing is generating buzz among businesses as an authentic and useful communication tool. It has turned itself into an established form of marketing. Both large as well small brands saw a massive shift towards influencer marketing in 2020 and leveraged its capability to drive sales. Though influencer marketing is becoming increasingly popular, not everybody understands its meaning or knows how it works. This article will help readers understand its importance as a marketing tool.
What is Influencer marketing?
Influencer marketing is a hybrid form of social media marketing which blends the idea of celebrity endorsement with modern-day content-driven marketing campaigns. But influencer marketing does not involve celebrities. Instead, it involves Influencers. An Influencer is a person on social media with a following. Unlike a celebrity, an influencer may or may not be famous in an offline setting but has the power to affect the online purchase decisions of his/her followers. Influencers, unlike celebrities, can be anywhere. They can be anyone.
Influencers build a relationship with their followers by sharing relevant content and generating keen interest among its audience. This audience is organically grown and is often long term. Brands collaborate with the influencers to leverage this authentic relationship and affect the purchase decisions of their followers.
What do these influencers do?
Let us understand this with the help of an example. A Mumbai based doctor, Dr Richa Negi, danced to a popular Indian song in a PPE kit during the Covid-19 pandemic, generating interest of all the major news channels and print media. It helped Dr Richa gain followers close to 280,000 on Instagram. Now she regularly posts videos revolving around her profession and dancing. Medical wear brands like Febris, fashion brands like Ishnya, styling brands like Khumaar and credit card brands like Yes bank now collaborate with her on Instagram for endorsements of their products. With the help of Dr Richa, these brands can reach a more segmented audience which increases the likelihood of sales.
Dr Richa is an influencer, the associated brands are collaborators, and the followers are potential customers.
Micro-influencers vs Macro-influencer
In 2020, influencer marketing is a $9.7 billion industry with more than 380 influencer marketing agencies created in the last one year in the United States. Influencers on a social media platform are divided into three categories based on the number of followers: Micro-influencers with less than 100,000 followers, Middle-influencers with 100,000-1,000,000 followers and Macro-influencers with more than 1,000,000 followers.
Businesses in 2016 hired three micro-influencers for each macro-influencer. Today, they are hiring ten micro-influencers for every macro-influencer. Such a trend is observed because micro-influencers tend to be more authentic and relatable. Influencer Marketing Hub conducted research analyzing 100,000 influencer profiles and found that micro-influencers had the best average engagement rate with their followers.
What do consumers want?
Based on a survey conducted by Rakuten Marketing, 64% of the participants said they preferred video content while interacting with their influencers, 61% liked images, and only 38% interacted through written content. They want an authentic and engaging relationship with an influencer with whom they can relate. 56% of women said that they follow beauty influencers on social media and 54% of men claimed that they follow gaming influencers.
Why is influencer marketing getting so popular?
In a Fortune interview, Mike Heller, the CEO of Talent Resources, said:
“When you have an influencer that has a million followers—that’s more powerful than any of the other traditional media outlets out there.”
Increase in smartphone penetration has made Indian audience move from TV to social media for entertainment. Hence, it has become imperative to target advertisements to a place where consumers belong.
How is it useful for businesses?
Through influencers, businesses can reach highly targeted consumer segments with higher sales conversion rate. Based on the Influencer marketing hub survey,
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63% of people trust what an influencer says about a product rather than what brands tell us about the product
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58% of people bought new products based on an influencer’s recommendation in the past one year
Influencer marketing can help in generating brand awareness and drive sales. Almost 40% of all the influencer campaigns are run for generating awareness about the brand and 36% for driving sales. Industries which use influencer marketing the most include are consumer goods, e-commerce and retail.
How to measure its effectiveness?
The success of an influencer marketing campaign can be measured using the following indicators:
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Views or Reach
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Engagement or clicks
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Sales Conversion
Measuring the number of impressions through an influencer ad is the most common way of evaluating influencers. Influencers are also assessed on the parameters of content creation. Based on data from more than 2000 campaigns, businesses claim to have earned an average of $5.78 through influencer marketing for every dollar spent.
If you ever wonder about these top influencers, who miraculously are transforming the way businesses sell their products digitally, then do check out this video.
Reference articles:
https://www.singlegrain.com/digital-marketing/digital-marketing-trends-2020/
https://www.singlegrain.com/content-marketing-strategy-2/guide-influencer-marketing/
https://influencermarketinghub.com/influencer-marketing-benchmark-report-2020/
https://www.influencer.in/blog/influencer-marketing-report-2020-for-india/
https://izea.com/2018/11/29/influencer-marketing-business-model-2/
https://influencermarketinghub.com/what-is-influencer-marketing/
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