This year brands will increase their budgets for influencer marketing by 59 per cent: plying free goods to manipulate the social media posts of our networks. Unethical and ineffective, or ingenious? We ask the experts

First, a confession: I am not a natural social media user. I wrote my dissertation on the negative impact of online social comparison for the prevalence of anxiety and depression, in between being poked, pinged and all-round plagued by glossy images online… and posting some of my own.

Fast-forward a few years to December 2014, and marketing guru Phillip Dyte told me businesses had to become part of the loop: “When it comes to social media, the biggest mistake for a luxury brand would be to ignore it. Social media is about people. We still befriend the friends we wish to; it is still intrinsically about our personal networks and our experiences. What could be more exclusive?”

He was right, of course. But what he didn’t foresee (or tell me, much to my bank manager’s disappointment) is that a little over 12 months later, a small number of users – capitalising on how much brands wanted to infiltrate their personal networks and inspire their friends’ purchases – would be charging £50,000 for the privilege. And that’s a fee to appear in just one Instagram post, by the way. 

Aimee Song @songofstyle

Aimee Song @songofstyle

In February, market intelligence firms, Fashion and Beauty Monitor and Econsultancy co-published a report that revealed that just under 60 per cent of the 348 strategists from the leading brands they spoke to, would be increasing their spend on activity with so-called Social Media Influencers this year. That is, to place products and personal recommendations in the status updates and photo feeds of people like you and I, on platforms such as Instagram, Facebook and Twitter. 

“Word-of-mouth marketing has always been powerful; the concept is as old as marketing itself." 

"But today this word-of-mouth has got enhanced reach thanks to digital platforms,” explains Priyanka Mehra-Dayal, content marketing manager of Fashion and Beauty Monitor. “Those who have leveraged digital platforms to successfully build a community of people who listen, who follow and who respond to their word have become influencers, and their opinion outweighs the glossiest of ads.”

Chiara Ferragni @theblondsalad

Chiara Ferragni @theblondsalad

So, can anyone with enough social media friends become an influencer? No, says Laura Ward-Ongley, founder of FabTrade, a company that in three years has generated more than £10m worth of business by pairing brands with a new breed of online personalities – bloggers, vloggers and tweeters among them.

“It’s not a numbers game,” she declares. “It’s about a combination of quality online content and a targeted audience." 

"For fashion brands you’re usually looking at users who have upwards of 50,000 followers, but for brands in a niche sector such as art or automobiles, the numbers can drop right down and it’s much more about the type of audience who that person reaches.”

In 2014, American Express handed over its Instagram account to six influencers who worked within the fashion and lifestyle industries, to show that it had a role in their lives – cue shots of stylish boutiques staying open late and exotic photo shoots being powered by financial transactions.

The result? Ten million page impressions and 40,000 engagements with the brand, representing a 23 per cent increase in online traffic and awareness.

“Using social media influencers is a legitimate and proven way for a brand to market its product,” declares Ward-Ongley. 

So where’s the catch? The Fashion and Beauty Monitor/Econsultancy report showed that 84 per cent of brands that are using social media influencers are having to manually search for the right candidates, a task complicated by an increasing number of online personalities trying to take advantage of free products and paychecks. 

Julie Sarinana @sincerelyjules

Julie Sarinana @sincerelyjules

Amid tales of invitations for launch events being returned with £6,000 invoices, one marketing insider, who wishes to remain anonymous, explains: “At the moment the rates are not consistent and in some cases you won’t know how effective a collaboration is until you try it. It can be difficult to build a relationship with an influencer if you are referred to an agent to discuss fees from the start. Often when a brand wants to work with an influencer they want to meet, not judge someone purely on their social media persona.”

Conversely, if an individual is open to endorsing brands too readily, that’s an issue too. 

Mehra-Dayal explains: “If an influencer endorses a particular brand one day and a rival brand the next, authenticity and trust is lost in both the influencer and brand. Marketers have to adopt a long-term strategy when it comes to working with social media personalities, so that consumers can make the association – and believe it.” 

Julie Sarinana @sincerelyjules

Julie Sarinana @sincerelyjules

The cost of nurturing a relationship with a social media user over one or two years is high. Ward-Ongley estimates that fees for a marketing campaign of several posts from a user with a high level of engagement from their followers can reach £200,000. But she’s adamant that being paid for posts is ethical and transparent for a user’s followers. 

“The advertising industry is heavily regulated. If an influencer is being paid to do a sponsored post, they have to declare it on there. Underneath the post it will say ‘#ad’ or ‘#sponsored’.” 

What is sometimes less clear, is that social media influencers working with brands are often gifted free products in hope of securing coverage, which could also be seen as promotional.

For Ward-Ongley this is unsurprising. “That is happening, but it’s not a bribe. Giving someone a sample so they can write about it is a simple public relations model. The leading influencers are transparent and the ones we work with are scrupulous; if someone offers to send them something they don’t want to talk about, they’ll say ‘no’.”

Other marketers remain sceptical: “If a luxury brand becomes overexposed through gifting it may be harder to convince consumers to buy items at their retail price,” says our source. 

However, the fact remains that the right partnership, executed in the right way, is driving sales. Seventy-seven per cent of marketers surveyed  about activity with social media influencers, considered their investment to be effective. 

“[Social media] is a 24-hour day job and the people at the top of their game are meticulous about the content that they are producing,” says Ward-Ongley. “There’s a perception that these users live a super fun, frivolous life –  and that’s true – but they offer access to hugely engaged audiences on massive scales. That’s why brands are so interested.”

[By Gabrielle Lane] [From Luxury London] [Read More]

Comment