Written by Nora Hesse

Consumers are online and, above all, social these days. They prefer to spend their time on social media, chat and connect with friends, read blog posts or share their favourite video with their network (Murphy & Schram, 2014). What’s more, ordinary people increasingly create content themselves – and through social media platforms it will be accessible to people all over the world. These people are also referred to as influencers and they gain increasingly power to determine the perception of a brand through the communication on social media platforms (Booth & Matic, 2011). Consumers are tired of listening to and being chattered by traditional advertising messages on TV or in a magazine. Thus, winning people with a wide influence to the advantage of the firm appears to be the challenge of today’s marketers.

The purpose of this post is therefore to look into the concept of influencer marketing and to show marketers how they can benefit from influencers in order to strengthen their brands.

The era of new media and its accompanying challenges

To begin with, let’s get back to the origin of the phenomena. The Internet, Web 2.0 and social media can be described as the fountainhead of this development and along with it followed the shift in power from marketers to consumers (Murphy & Schram, 2014).

Vital to the success of the new media era is the consumer empowerment. As Berthon, Pitt, Plangger & Shapiro (2012) explain, “Web 2.0 technologies have caused three effects: (1) a shift in locus of activity from the desktop to the Web, (2) a shift in locus of value production from the firm to the consumer, and (3) a shift in the locus of power away from the firm to the consumer.” On top of that, Kucuk and Krishnamurthy (2007, cited in Kucuk and Krishnamurthy, 2009, p.1121) highlight the fact that “[t]he internet enables consumer empowerment on technological, economic, social and legal dimensions.” Consumers are now able to create their own content on websites or through blogs with the aid of Web 2.0, can connect and exchange views with other consumers, compare prices, and are more informed than ever before.

Social media have amplified this shift even more. Everyone is online nowadays and companies reach its customer best on various social media platforms. Armelini & Villanueva (2011, p.30) refer to a study of ComScore reporting that “84 percent of European Internet users belong to at least one social network.” Aljukhadar & Senecal (2011, p.421) put it in a nutshell and declare that “[t]he internet has become mainstream in everyday communications and transactions.”

Thus, barely one is reading magazines or reacts to billboards and advertisements of companies nowadays. When there is an advertising spot on TV, people change the channel. As marketers should be where their consumers are, many companies started to make use of social media in addition to the typical marketing mix (Armelini & Villanueva, 2011). However, most firms still trouble in exploiting the full potential of them. Nevertheless, they feel the pressure to change the strategy and to approach their consumers differently according to their preferences.

It’s all about the people and trust

But what are these consumer preferences on social media? Consumers favour listening to recommendations of family and friends and they are sceptical towards traditional marketing messages (Weiss, 2014). In this regard, Weiss (2014, p.16) refers to study by Nielsen which revealed that “WOM is the most trusted source of consumer information and the likeliest to be acted upon.” Moreover, she highlights the fact that “the effectiveness and power of human-to-human contact – whether in person, by voice, via the Internet or on rating sites – are viewed as more targeted and effective than traditional marketing” (ibid).

In addition, Armelini and Villanueva (2011, p.30) reported that research has proven that “a product or service being talked about has a direct impact on sales”. Just think of electronic word-of-mouth (eWOM) and which impact it can have on particular products or services – both positive and negative. Now consumers are able to create brand perceptions, as brand managers have lost control over their brands due to the manifold and unlimited opportunities of the World Wide Web (Gensler, Völckner, Liu-Thompkins & Wiertz (2013). Also Fournier & Avery (2011) draw upon on the power shift and alert marketers to realize that branding has evolved as an open source activity which is controlled by consumers. Hanna, Rohm & Crittenden (2011) support these findings arguing that the so-called earned media cannot be controlled by the marketer, which makes it a difficult task for companies to spread their intended brand image to the customers.

Nevertheless, more and more marketers have realized that now is the time to jump on the bandwagon to get the people with influence and great networks on board to their advantage. So how do they do it? The answer might be:

Influencer marketing

What is influencer marketing?

Even though scholars have not properly defined the term influencer marketing yet, Wikipedia encapsulates it well and defines it as

“a form of marketing that has emerged from a variety of recent practices and studies, in which focus is placed on specific key individuals (or types of individual) rather than the target market as a whole. It identifies the individuals that have influence over potential buyers, and orients marketing activities around these influencers.”

Murphy & Schram (2014, p.33) call it sponsored social and it “is created by an influencer or publisher and distributed in their network organically to their followers”. Thus, it should not be confused with promoted content which is created and spread by the advertiser. There is a variety of forms that marketers can use ranging from sponsored, blog posts to Tweets, video, photos, check-ins and shares and that social media platforms are diverse (ibid).

Furthermore, Murphy & Schram (2014, p.32) illustrate how influencer marketing works and explain that it is “the practice of providing compensation to a social media influencer or publisher in exchange for mention, promotion or review through that influencer's social media channels. Publishers are included in this category because they, too, are creators.” The compensation, however, varies from company to company and might include cash, a free product or service, discounts, or other special incentives (ibid).

Who are the influencers?

Until recently, especially celebrities like Beyoncé or Oprah Winfrey, who have a huge fan base on social media platforms, were targeted by marketers to promote their products or services due to the fact that they are able to reach and influence a great amount of people (Weiss, 2014). However, because of the development of Web 2.0 and social media, each and every one is able to publish a message online which can be spread through networks to be seen from people all over the world. Thus, basically anyone can be an influencer and could be valuable for marketers, as long as they have a wide influence, a huge network and a strong presence on social media.

According to Murphy & Schram (2014, p.31) indeed “[e]veryone – from celebrities to mothers – is becoming an influencer and is beginning to recognise the value that comes with that title.” This can be ascribed to the recent rise of consumer empowerment. In addition, Weiss (2014, p.16) adds that especially the straightforward use of WOM on the Internet contributed to the fact that actually everyone can be an influencer nowadays. Remember that people are tired of being bombarded by advertising messages of companies and they rather listen to ordinary people whom they trust (Hanna, Rohm & Crittenden, 2011; Weiss, 2014).

Booth and Matic (2011, p.184) manage it well to put the phenomenon of influencers into a nutshell and describe the influencers of today as “the ‘nobodies’ of the past [that] are now the new ‘somebodies’ demanding the attention of communication professionals who seek continuous engagement with target consumers throughout the various channels of the social web.” Nevertheless, Hall (2010, cited in Booth & Matic, 2011, p.186) emphasizes the fact that it is not only about direct friends or followers, but what counts is the network of indirect and relevant connections.

What are the benefits of influencer marketing?

So marketers may ask themselves if this is even worth the effort. According to Murphy & Schram (2014, p.35) influencer marketing comes with a variety of benefits for marketers: “unique branded social content from a trusted, influential source. It also gives them syndication of content through all platforms, the ability to target micro niches at scale, higher click-through rates (CTRs) and lower cost per clicks than traditional display, fresh and lasting content and loyal partners that care and share.” Thus, influencer marketing allows spreading brand-related content through influential and trusted people, while social media enable companies to directly build a relationship with customers to construct conversations about brands. Be aware that influencers can actually do shape brand perceptions, but due to the lack of control over social media, these perceptions can turn out to be both positive and negative in the end.

How to identify your influencers?

This leads to the crucial point of how to identify the influencers of your particular brand. The enormous growth of bloggers and their ability to influence a great amount of people make it necessary for marketers to analyse and evaluate on the influencers and their networks in order to plan their marketing campaigns. In fact, I came across a very detailed description of how to reach influential bloggers step-by-step by Booth & Matic (2011), which I considered highly recommendable for marketers. They developed a customizable social media valuation algorithm and formulated four steps that should be followed to better identify the relevant influencers, namely:

“(1) Set objectives and strategies

(2) Search and analyse

(3) Engage and socialize

(4) Report and refine” (p.189)

Moreover, the most popular and relevant tools these days for finding influencers are listed below:

Klout

Kred

Net Promoter Score by Satmetrix

Tellagence

However, please note that according to the Federal Trade Commission each marketer should be aware that influencers must indicate that their blog post/tweet is sponsored (Burkhalter, Wood & Tryce, 2014; Murphy & Schram, 2014).

Best practice example

One of the most successful examples of how a company can benefit from a relationship with an influencer is the case of the cosmetics and beauty company L’Oréal and YouTube beauty expert Michelle Phan. She uploaded simple make-up tutorials on YouTube and created a huge fan base that regularly watched her videos. L’Oréal seized the opportunity to connect with her and the first make-up line co-created by Michelle was born. This collaboration exemplifies how L’Oréal managed to gain access to the already engaged followers of Michelle and it was successful in aligning the blogger’s personality with their brand. With this move, L’Oréal was able to spread trustworthy messages about their products through Michelle’s channel. The relationship between L’Oréal and Michelle made a natural impression on the audience, as Michelle was already known as a huge beauty enthusiast before.

Main take-aways for marketers about influencer marketing

Let’s finish with the most important lessons learnt about influencer marketing:

The Internet, Web 2.0 and social media have empowered consumers.
People trust their network of family and friends rather than marketing messages spread by marketers.
Brand managers do not dictate what consumers associate with brands anymore.
Nowadays, ordinary people create content, shape brand perceptions and are able to influence a great amount of people.
For marketers it is crucial to identify and to connect with these influencers.
Set objectives and strategies, search and analyse, engage and socialize and report and refine.
Keep in mind: It is all about trust and relationships with people.
Influencers are able to shape brand perceptions, both positively and negatively.
Follow the official guidelines on sponsored content.

If you want to learn more about the development of influencer marketing and the trends predicted for 2015, take a look at Kyle Wong’s entry on Forbes.com.

References

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