Why are marketers increasing their online influencer budgets?
Aprajita Jain, A Brand Marketing Evangelist at Google
Presented here for discussion is an excerpt of a current article published with permission from Knowledge@Wharton, the online research and business analysis journal of the Wharton School of the University of Pennsylvania. Aprajita Jain is a a brand marketing evangelist at Google.
A poll conducted by Tomoson found that 59 percent of marketers are planning to increase their influencer marketing budgets year-over-year. Working with such connected individuals was also found to be the most cost effective and fastest growing online customer acquisition channel, outpacing organic search, paid search and e-mail marketing.
Once the right influencers are identified, the next step is compensation.
The four most common pricing models are:
Pay-per-post or flat-rate pricing: Typically, the influencer is paid a flat fee per piece of sponsored content they create, whether it’s a photo, tweet, pin, video or blog post. Depending on who they work with, prices can range from as little as $50 per piece to as much as $250,000 for top-tier influencers.
Product compensation: Some influencers can be wooed with free products or services. This type of compensation is commonly used by travel brands as influencers can creatively endorse their personal travel stories. This model is ideal for smaller campaigns or for brands looking to establish a brand ambassador group.
Pay-per-click: In this model, influencers are compensated for how well their content performs. The key metric is number of clicks to a brand’s site. Because influencers rely a lot more on audience interaction in this performance-based model, they are motivated to create larger volumes of content.
Pay-per-acquisition: Here, influencers are rewarded for the number of purchases, actions or sign-ups driven by their content. It is the least common payment model because consumers rarely purchase or sign up for something the first time they get introduced to a product or service.
Marketers define success in different ways, monitoring different measurement criteria. Half of all marketers see sales increases and lead generation as the top goals of influencer marketing. Forty percent look for brand engagement such as clicks and social shares.
Success can also be correlated with spikes in web traffic or higher conversions in concurrent ad campaigns, or even less tangible metrics, such as overall brand sentiment. It’s important to look at the whole picture and, as with all things in digital marketing, watching for the cross-channel impact of influencer marketing as well.
DISCUSSION QUESTIONS: What’s the best way to compensate influencers in marketing campaigns? How should brands or retailers measure the impact of their efforts?