In the digital sphere, our access to granular data gives us the ability to track how customers are interacting with brands, content and products at all times.
Never before have we been able to so accurately analyse the individual value of such tiny individual components of our overall business strategy. It means that companies are able to measure ROI in real-time and adjust their resources accordingly.
Performance-based marketing has grown remarkably each year. Affiliate marketing in the US alone has grown from $4.21 billion in 2015 to $6.82 billion this year, and many experts such as Topher Grant tell us that we are about to witness a “performance marketing explosion“.
In many ways, performance-focused marketing has cleansed and focused the online sales process for everyone. The unparalleled accuracy allows brands to easily tackle one of the perennial challenges faced by businesses: how to profitably scale customer acquisition. For marketers it has accelerated the availability of user data access and, perhaps best of all, it has tightened up targeting and made messaging more accurate, useful and engaging for consumers. Big wins all round.
With its profitability and efficiency, we’ve naturally seen the main components of performance marketing infiltrating into other digital marketing disciplines. There is one area in particular, however, which could still learn a thing or two.
Influencer marketing: An art or a science?
Driven by the explosion of social media and mobile penetration (there were 10 new social media users every second between 2018 and 2019), influencer marketing has seen a spectacular rise in its uptake and popularity over the past half-decade.
Drawn by the huge user bases of social media platforms, brands quickly flocked to social media where the back-and-forth nature of communication quickly encouraged them to connect to their audiences in a more meaningful way. Leveraging the support and audiences of popular, established players quickly became the de facto method.
Leveraging the audiences and reach of people with star power is nothing new; however, the possibilities on these new platforms with regards to measurement and analysis were initially rarely considered. This early phase, often based more in vanity than data science, has often been dubbed the “wild west of digital marketing”.
Brands would simply vie for influencers with huge follower bases, assuming that their reach alone would be enough to pour a new bucket of eager consumers into the top of their sales funnel. It soon became clear that paying a flat fee for a branded post was uncharacteristically unmethodical and a poor (or unknown) ROI.
Things slowly got a bit more scientific over the years as brands and marketers began to use metrics more related to engagement: likes, comments and shares. While this saw more success than the discipline’s previous incarnation, engagement still didn’t necessarily correlate with increased conversions. This approach was further hindered by changes to the landscape itself, most notably with Instagram removing newsfeed likes – an announcement that predictably sent a tidal wave of panic through the influencer community.
The resultant drop in these vanity metrics was also compounded by the absolute saturation of the market. Not only the amount of influencers but also the sheer amount of content being published across the board.
Without the forensic analysis and real-time measurement of performance marketing, many brands felt that influencer marketing would not be a safe investment, particularly in the ever-changing digital market.
Streamlining the influencer marketing process
However, fast forward, and spending on influencer marketing has continued to rise. With Business Insider predicting a rise from $8 billion (2019) to $15 billion (2022), it’s important for us to economise the process as an industry – starting with goal setting, authenticity, and measurement. Here’s how.
The aims of an influencer-marketing campaign need to be clearly decided beforehand. Some of the most common influencer marketing goals include:
- Increase brand awareness
- Reach a specific niche audience
- Increase sales
- Improve brand reputation
However, taking our lead from performance marketing, these are typically too broad to give us usable data. The best results come from selecting multiple specific metrics and using a realistic, predetermined timeline with achievement milestones at strategic intervals.
- A consistent feedback loop needs to be maintained. Fortunately, there is an array of tools to automate this. This ongoing data gathering will also incentivise influencers to be additionally proactive when it comes to their real-time performance.
- When choosing influencers, social analytics tools allow brands to deeply analyse interests and connections. Rather than working with one power influencer, you may be able to drive better ROI by choosing multiple micro-influencers – creators who have built up their profiles through a genuine passion for their topic of choice. This is a quality typically mirrored by their followers, improving engagement with their posts and, subsequently, your brand.
- As well as the careful selection of your influencers, an additional tactic for genuine authenticity is to remain partnered with your micro-influencer network. Let them enter your world and constantly breathe your brand; in return, it’s important to allow them artistic freedom. After all, they are the experts at content creation and connecting with their audiences.
- Partnering with your influencers long-term will allow you to assess their strengths and weaknesses. Some may be extremely effective at relaying complicated information while others are better at attention-grabbing creativity. Like in performance marketing, you’ll be able to adjust the moving parts to get the best out of each campaign.
- Finally, by using bespoke URLs and unique discount/product codes, you can track the performance of individual influencers. Each of these should be compared to the group average, keeping a close eye on the outliers. To improve overall performance, you can remove those struggling to achieve their metrics and test-to-replace them with other potentially relevant players, adding them to your roster if they succeed.
Let’s take notes from performance marketing and make it an even more authentic and effective channel for brands and consumers.