By Kunal Sinha
With Orhan Awatramani aka Orry taking over IG feeds during the past few weeks, announcing ‘I’m a liver’ and snagging a Black Friday endorsement deal from CRED (who else?), the question of influencer effectiveness begs to be answered.
When Hubspot posed the question, 80% of marketers said that influencer marketing is effective; in fact, 89% say it works as well as, if not better than other marketing channels. They believe that it yields the highest ROI, along with blogging and social commerce.
In its early days, the detractors against influencer marketing were many. With brands having little control over influencers’ output, some marketers believed that partnering with creators could result in damage to the relationship they have with their consumers if their endorsements are inappropriate or less than transparent.
Recent experience with influencers suggests that sentiment to have changed. In a study by Kantar, some 59% of marketers said they invested in influencer content in 2022, and close to 60% of marketers globally said they are going to increase spend on influencers in 2023. Already, 23% of marketers globally are spending over 40% of their marketing budgets on influencers; and this year, they would end up spending $16.4 billion dollars on influencer marketing.
Here in Indonesia, Dr Richard Lee, a doctor who promotes and sells skincare, is followed by 5.1 million folks on TikTok, 1.7 million on Instagram, and has 4.69 million subscribers to his YouTube channel, all reasonably large followings. He made $800,000 in less than three hours selling his skincare products in a live shopping stream on Shopee in August. A follow-up livestream shopping event in September raked in $500,000 in just one-and-a-half hours. Dr Lee’s conversion of his followers into shoppers suggests that the lines between influencer marketing and social commerce are getting blurred.
Research published in Harvard Business Review analysed more than 5,800 influencer marketing posts on the popular Chinese social media platform Weibo.
Posts in that dataset were written by 2,412 influencers for 861 brands across 29 product categories, at costs ranging from $200 to almost $100,000 per post. The study found that on average, a 1% increase in influencer marketing spend led to an increase in engagement of 0.46%, suggesting that the strategy can in fact yield positive ROI.
The jury seems to be out when it comes to the impact of influencers on novelty. Kantar’s analysis of 30 different influencer campaigns in beauty, fintech, sports and retail revealed that compared to market averages in their database of almost 9,000 global ads, influencer creative executions are in the top third for delivering new information and being credible.
Conversely, the study published in HBR found that ROI for influencer posts announcing new products was 30.5% lower than for equivalent posts that were not about new product launches.
Having said that, there are some clear directions towards which factors and variables make an influencer campaign perform better.
Number of followers: Influencers who have a large following not only deliver greater reach, but are also seen as more credible. They are able to generate higher engagement rates than brands would achieve by spending the same budget on partnering with a less-popular influencer. Posts from influencers whose follower bases are larger than average achieved 9.2% greater ROI.
Posting frequency: Influencers who do not post often are not seen as up-to-date sources of information. They are also unable to establish presence on followers’ feeds to build trust and intimacy. On average, marketers can increase the ROI of their influencer marketing efforts by 53.8% simply by selecting influencers who engage in an optimal level of posting activity – five posts per week.
Content originality: Influencers posting more original content tend to stand out. Their content attracts more attention, and they appear more knowledgeable and authentic. Brands that leverage such influencers typically achieved higher engagement rates for a given marketing spend. Specifically, influencer posts that were original content achieved 15.5% greater ROI than those that were not (such as re-shares).
Links to the brand: Consistent with prior research on content marketing, the HBR study finds that posts that include links to a brand’s social media account or external webpages perform significantly better. Including links to a brand’s website or social media in an influencer post achieves 11.4% higher ROI.
Putting these principles into practice for TikTok Indonesia
In its quest for growth in Indonesia, TikTok was hampered by the perception that its content was mostly about dance and music.
Increasing the user base by 50% required out-of-the-box thinking. Our strategy at M&C Saatchi was to make folks realize that there’s more to TikTok than met the eye. We would show them diverse content they weren’t aware of.
How did we do that? By deploying Najwa Shihab, an extremely popular, intellectual persona to introduce the high quality of TikTok’s content. While she was extremely popular on Instagram, nobody expected her on TikTok. We were convinced that her positive, inspiring imagery that would galvanize users. And it did.
Najwa’s first-ever TikTok video post achieved 51.2 million views in 5 days. She gathered 1 million followers within a week.
The #serunyaditiktok campaign reached an astounding 8 billion views on TikTok; motivating 3960 creators to come on-board. The content racked up 1.8 billion views in a week. An online media event featuring Najwa was covered by 128 outlets, generating 5 billion impressions.
As against the target of 33 million new users, TikTok gained almost 55 million users, who spent 67% more time on the platform. TikTok moved from #9 to #3 in the top social media app rankings in Indonesia.
Why is influencer marketing effective?
In its essence, what influencers do is create desire by assigning a value to the objects they promote. That value of those objects isn’t objective, it is subjective. That subjective value is based on our relationship with others: it is mimetic. We assign value to things, and thus desire them, based on what other people want. Mimetic desire means that our own choices are usually according to the desire of others.
Influencers serve as models of desire. They are people who we look towards for guidance about what to want, usually unconsciously, as they transfigure objects before our eyes.
Now, go figure, which of your hidden desires Orry has been able to transfix!
References:
Hubspot: What Will Influencer Marketing Look Like in 2024? https://blog.hubspot.com/marketing/how-to-work-with-influencers
Leung, Zhang, et al, Does Influencer Marketing Really Pay Off, Harvard Business Review, November 2022
Bubani, Gonca, Under the influence? How influencer marketing grew up, World Advertising Research Centre, 2022
https://www.statista.com/statistics/268641/share-of-marketing-budgets-spent-on-digital-worldwide/
Kunal Sinha is Group Chief Strategy Officer at M&C Saatchi Indonesia, and author of several books including The Future of India’s Rural Markets and Raw – Pervasive Creativity in Asia. He will write for MxMIndia every other Monday. His views here are personal.