The biggest elephant in the room when it comes to social influencers, however, is the pricing mechanism
Online advertising is dead. Nobody clicks on banner ads. Facebook ads and Twitter sponsored posts are increasingly expensive and don’t drive results. Since Ad Blocker was invented, Google Adwords is increasingly making Google spend ineffective. Those pre-rolls on YouTube, everyone skips after 5 seconds.
We are in the middle of a seismic shift in the world of advertising. It used to be the case that when brands wanted to engage with audiences, it was very disruptive. Adverts on television disrupted you watching your favourite show. Banner and video ads online just popped out at you at any point when you were reading something you were interested in online and scrolling down the newsfeed was always punctuated by sponsored posts.
Influencer marketing has changed that. Now, by working with social influencers, young teens and 20 somethings with audiences who love them for their talent and personality, brands are able to move away from disrupting what people are interested in and can become what people are interested in. Many an agency or middle man has grown to facilitate the relationships between brands and social influencers.
Elephant in the room
Many brands that work with us, regardless of whether they are a fast growing start-up or a global brand like Nickelodeon, are still puzzled as to what to expect for cost
The biggest elephant in the room when it comes to social influencers, however, is the pricing mechanism. For such a nascent form of advertising, which breaks new grounds and presents such new opportunities for brands, it is still a wild west when it comes to costs. Many brands that work with us, regardless of whether they are a fast growing start-up or a global brand like Nickelodeon, are still puzzled as to what to expect for cost. It’s something that has made me think considerably about how we can create a system that doesn’t short-change clients.
Before I expand, however, let me make it clear: reach sucks.
Conventionally great advertising is measured by reach, or how many people saw an ad. Many brand are so used to paying for "reach" that they fall out of their seats when it is suggested that it’s not what should be measured. The problem with reach as a medium of measurement is that in influencer marketing that equates to number of subscribers, or followers an influencer has, which leads to inflated numbers. In many cases an influencer could have 500k subscribers or followers but only 10% engage. The client knows they are overpaying, the agency knows it too but they choose to skip around it.
New type of currency
I propose a new type of currency when operating in the field of influencer marketing. A currency which does not sell clients short and keeps agencies accountable. A currency which does not take into account how many subscribers one has or potential people but rather takes into account the impact that a campaign has. This currency is engagement.
The single biggest thing that influencer marketing has brought to brands is engagement. You can get awareness with any of the mediums such as Google or Facebook. The ability for brands to be able to leverage the relationship between influencers and their audiences and to directly engage with them is a unique value proposition. By optimizing campaigns for engagement, the amount of people who actually engage with a campaign as opposed to reach, adds an incentive for agencies to create the most compelling content that gets people talking. In essence, they know that the more they can do this, the happier the client.
Price by engagement
The beauty of such a pricing mechanism is not only in its ability to incentivise agencies to create the best possible campaigns and brands to get the best return on investment. Most importantly is its flexibility across all social media outlets, whether it be on YouTube where views and likes count as engagement, or Snapchat where it’s views and screenshots, or Vine loops or revines; there is the opportunity for agencies to really provide value to their brands in a scalable way. Doing this will intrinsically show the value of influencer marketing. As opposed to pricing on the fact that these influencers have 5 million subscribers collectively, agencies should take into consideration the fact that collectively they will muster up 2 million points of engagement, whether it’s views or likes.
The mechanics of such an approach will require further thought and, as with everything, is not perfect. For example, certain levels of engagement will need to be priced more than others for levels of engagement on the same medium. This short piece is a call to action for agencies to be more accountable to brands who have trusted us into entering this new frontier of marketing with them. By doing so, and by measuring on the true value of influencer marketing, we will be able to elevate our industry and make it a mainstay for advertising campaigns everywhere.