“As a marketing manager, you’re going to manage a portfolio of influencers, just like Nike manages a portfolio of celebrities.” – Robert Palmatier, University of Washinton, Foster School of Business.
Influencer marketing has become a critical part of digital retail marketing strategies for businesses of all sizes. Influencers with a substantial following can impact consumer purchasing decisions through social media platforms and provide a valuable marketing tool for businesses. So, what exactly is influencer marketing? How does it work? This blog discusses the basics of influencer marketing, the relationship between social media and influencer marketing, and how retailers can choose the right influencer for their business. Understanding influencer marketing principles is crucial to creating a successful campaign that can positively impact your brand.
What is an Influencer?
An influencer is a person with a significant following on social media who can persuade their audience’s purchase decisions. They possess a lot of authority within their audiences and are considered reliable sources for making purchase decisions that affect the daily lives of their followers. Influencer marketing enables brands to harness the power and popularity of these individuals to promote their products and reach potential customers at every stage of the decision-making process.
What is Influencer Marketing?
Influencer marketing is a strategy where brands partner with online influencers to promote their products or services. Influencers, who have a significant following on social media or the web and are experts in their field, can build trust with potential customers. Brands can collaborate with influencers through affiliate partnerships, sponsored content, or brand ambassadorship.
What is the Relationship Between Social Media & Influencer Marketing?
Social media is the primary platform for influencer marketing, where brands partner with influencers who have an engaged following on platforms like Instagram, YouTube, and TikTok to promote their products or services. Brands can benefit from working with influencers depending on their audience, niche, and budget. Four basic types of social media influencers include:
- Mega or celebrity influencers: have one million+ followers and are suitable for large-scale brand awareness campaigns, providing unparalleled exposure. However, they are expensive to partner with and may have lower engagement rates than niche influencers.
- Macro-influencers: have a following of 100,000 to 1 million; macro-influencers are established personalities in their respective niches. Collaborating with them can provide substantial reach and credibility but may still be relatively costly.
- Micro-influencers: have 10,000 to 100,000 highly engaged followers; micro-influencers captivate a passionate, niche audience with their creative content, relatable recommendations, and genuine interactions. They are more affordable than prominent influencers, with a 60% higher engagement rate and 20% more conversions for your brand.
- Nano-influencers: have fewer than 10,000 followers; nano-influencers have strong connections with their audience, thanks to their personable content and authentic engagement. They are ideal for cost-effectively targeting specific communities and demographics with tailored content and personal relationships within niche communities.
Social media influencer marketing enables brands to leverage the trust and credibility influencers have built with their followers, which can be a cost-effective way to reach new customers.
What Impact Has Influencer Marketing Had on the Retail Industry?
Influencer marketing has proven to be profitable, with significant growth in recent years. The market grew from $1.7 billion in 2016 to $9.7 billion in 2020; in 2021, it increased to $13.8 billion.In 2022, the industry reached a remarkable milestone, expanding to a $16.4 billion market.
“Influencer marketing is currently producing higher return on investment, or ROI, than most other kinds of marketing.” – Robert Palmatier, University of Washinton.
A consumer survey of 3500 marketing agencies administered by Influencer Marketing Hub found that:
- 90% of our influencer marketing survey respondents indicated that they believe influencer marketing is effective.
- 68% of marketers intend to increase their influencer marketing budget the following year.
- 61% of consumers trust influencer recommendations, compared to 38% who trust brand-produced content.
- 56% of brands use the same influencers across different campaigns.
Research by the Journal of Marketing found that when marketing firms spent 1% more on influencer marketing, they would see a 0.5% increase in consumer engagement. Furthermore, researchers also concluded that reallocating spending could result in a 16.6% increase in engagement rates and a 1 to 4% average conversion rate. In sum, influencer marketing works because it utilizes word-of-mouth marketing and social proof, which have become critical components of any successful marketing strategy.
FYI: Engagement is how followers share content with their networks, reposting, liking, sharing, commenting, Etc.
How to Choose the Right Social Media Influencer for Your Business?
Selecting the appropriate influencer is vital as it guarantees that the influencer’s audience and content coincide with the brand’s values and objectives. This harmony establishes a robust partnership that benefits both parties and generates the anticipated outcomes. Consider the following five steps when choosing the right influencer:
- Define Your Target Audience: Understand who your target audience is and what they are interested in.
- Research Influencers: Look for influencers who align with your brand values and target audience.
- Review Influencers’ Content: Examine influencers’ content to see if their style and tone match your brand.
- Check Influencers’ Engagement Rates: Look for influencers with high engagement rates and active followers.
- Contact Influencers: Personalize your outreach and be clear about your expectations for the partnership. Respect their time and communicate the benefits of collaborating with your brand.
Note: working with an unsuitable influencer can lead to conflicting values, futile campaigns, and resource wastage.
“Marketers still treat influencer marketing as an experimental strategy and fail to capture its true value.” — Unknown.
Influencer marketing has emerged as an essential component of digital retail marketing strategies, irrespective of a business’s size. This marketing technique leverages the power of social media to reach potential customers through the influence of influencers with a significant following. This blog has provided a comprehensive understanding of influencer marketing, including the relationship between social media and influencer marketing, the various types of influencers, and the steps retailers can take to select the right influencer. By following these fundamental principles of influencer marketing, businesses can create successful campaigns that generate positive results for their brand.
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