Marketers Can't Buy Love, Or Can We?
January 18, 2016
Editor's Note: This post was contributed by Katherine Lisciani, Founder of Millennovation Media and a Digital Marketing Strategist and Content Curator.
From make-up to movies, 2015 showed us one thing for sure. Big brands are making big bets to take on their underdog competitors in the battle for affection. In December, in fact, Nike shelled out a reported $500 million to lock down LeBron James for a lifetime.
I can’t fault LeBron for jumping at the opportunity to tie the knot with Nike. (I’d be like, SWOOSH). But, while the media can’t get over the size of his bankroll, I’m stuck on a slightly different question: How did Nike’s marketing team get that one approved?
If you’re in the marketing industry, you may have recently noticed that everyone around you is foaming at the mouth to tell you his or her predicted trends for marketing in 2016. Influencer marketing tops many of these predictions, which suggests many marketing execs will be considering the buckets of cash they’ll need to fund their influencer strategy as they prepare to battle over budgets.
As with most great trends in history (and far too many of the bad), the rise in influencer marketing trails a flock of would-be unicorns behind it, seeding an entire industry of tech platforms to serve marketers’ increasing influencer needs. But before doing a platform dive, here’s what you need to know to determine if influencer marketing is worth your time and your budget.
What Is Influencer Marketing?
An “influencer” is an individual or media brand that maintains a significant amount of credibility within a specific segment of the market. Influencers can, and do, exist across pretty much every hobby, industry, and channel. From video gaming to quilting, there’s an influencer for that. Top influencers carry with them the weight of millions of followers. Like PewDiePie for example, who topped Forbes inaugural list of highest earning YouTube Stars this year with 40 million subscribers and correspondent earnings that topped $10 million before taxes.
Why Does Influencer Marketing Work?
I love marketers. They’re my people. But, I’ll be honest with you. When we get around too many of our friends and the Kool-Aid starts flowing, sometimes we get a little drunk on our own success. No one here is a magician, and you can’t assume to know the reaction of a free willed human being. On the other side of things, there’s an equally sizable portion of the consumer population who don’t trust brands and their marketing messages. That’s why we have to be strategic in aligning ourselves with the right influencers.
According to Nielsen, 84% of consumers trust peer recommendations above any other source. The purpose of partnering with influencers is to seed word-of-mouth marketing. If you’re looking to generate this kind of hype, then you’re in luck because the data is on your side. Reputable sources like McKinsey, Deloitte, and Nielsen have published reports for years evidencing the overwhelming influence of word-of-mouth recommendations.
“The most credible advertising comes straight from the people we know and trust. For that reason, it should come as no surprise that more than eight-in-10 global respondents (83 percent) say they completely or somewhat trust the recommendations of friends and family. But trust isn’t confined only to those in our inner circle, as two-thirds (66 percent) say they trust consumer opinions posted online—the third-most-trusted form of advertising.” -- (Nielsen, 2015 report)
Gaining popularity among a new audience is no different than your attempt to get that cute new girl in the mailroom to go out with you. You need to be vouched for by someone who holds some major clout in the cute new girl’s book. It is all about building a relationship – just like in marketing. Your consumers are not in the market of wasting their valuable time and money on anything they feel is risky business.
Building engagement is about growing trust. I know you hate to say it, but mom and dad were right. Trust is something that has to be earned. And, the fact that “92 percent of consumers trust recommendations from other people—even if they don’t know them personally—over promotional content that comes directly from brands” (Nielsen), means no one is exempt from that.
How To Harness Influence At The Right Pace For Your Brand
Goldmine influencer campaigns – and a famous one is the Doublemint Twins for Wrigley’s Doublemint Gum, a campaign that launched in the 1950s and is an iconic influencer campaign -- aren’t only about putting in the research to find the right influencer to endorse your brand, event, or product. Marketers have to assess the channel and make the ask before designing a campaign around an influencer’s platform. Note how I phrased it as the influencer’s platform? As with all marketing strategy, influencer campaigns are no different and should start with the end goal in mind. Curb your own expectations (and that of your superiors) by understanding the platform, the culture, and the audience you are about to engage.
Here’s why the LeBron deal made sense for Nike. I’m told it costs Nike about $62.50 to make a pair of LeBron Nikes, which sell for $200-250 on average. According to a 2015 article in Forbes, in 2014 Nike sold $340 million in LeBron signature shoes. A 13 percent increase from the year prior. If the figure of Nike shoes sold is 65 to 120 million per year, then LeBron’s lifetime deal will have paid for itself in just nearly three years.
When thinking about which (if any) influencer is right for your brand, it is key to err on the side of caution. Influencer marketing is not about going with what’s trendy. Rather, think about if the influencer’s audience and platform make sense for your brand within the framework of your company’s strategic growth objectives. Nike can afford to take larger risks than most. However, I guarantee that Nike’s executives did more than just crunch the numbers before making the decision to extend that offer. Nike is banking that LeBron never goes out of style.
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