Businesses of all sizes are quickly finding that influencer marketing is an effective way to reach customers. By sponsoring content creators that have their own audiences, marketers can leverage user-generated content, expertise and trust combined with built-in social distribution to meet a variety of marketing goals. When implemented properly, influencer marketing can drive brand awareness, audience development, sales growth and more.
Despite its efficacy, how to run an influencer marketing campaign is still unclear for many small (and large!) businesses. Below are six best practices to generate a strong return on investment from your influencer marketing activities.
1. Choose the Right Platform for Your Goals.
All platforms are not created equal and not all are relevant to your audience. “The first step in any influencer marketing campaign is finding the most appropriate platform. One platform does not fit all, as each has different characteristics, formats, engagement mechanisms and features. Depending on your specific goals, some platforms may be better than others” said Mike Prasad, the CEO of Tinysponsor, an inventory-based sponsorship marketplace that helps companies purchase the right sponsorships for their marketing goals (disclosure, I am also an investor in the platform).
For example, Prasad notes that “a permanent and visually engaging Instagram post will outperform on awareness and narrative goals, while an Instagram Story with a 24-hour lifespan will typically outperform on click-through and sales conversions with its swipe-up links and immediate call-to-action features. A blog sponsorship is fantastic for SEO and content creation, plus it can be effectively repurposed as ‘testimonial’-type creatives. You need to start with your goals.”
2. Know What Metrics Matter and Why.
After choosing a platform, you need to be measuring success. Operating on vanity measurements will not drive ROI. “Platforms such as Twitter and Facebook offer granular demographic insights, while others such as Instagram and Snapchat are more limited in their data offerings,” Prasad said. “Knowing what to measure is critical for driving bottom-line results.
“A post’s performance data may include a variety of measures,” he added. “Your key metrics will vary depending on your specific goals and platform. A campaign with conversion goals would use trackable links to correctly attribute credit and measure across overall reach, whereas a brand awareness campaign should compare true reach and distribution against light engagement (such as likes) and deep engagement (such as comments) to determine actual effectiveness.”
3. Find the Right Creators for Your Brand.
Every content creator has their own unique voice, focus, audience and style. Finding the right influencer to work with is essential to a campaign’s success.
“A common but flawed practice is to choose an influencer based on general category and overall reach,” Prasad warned. “This incorrect approach often results in negative ROI. To deliver meaningful outcomes, context and alignment is everything.”
For example, Prasad continued, “All metrics being the same, contextual alignment between your brand, the influencer and their audience will determine the outcome of a campaign. The best aligned influencer should look like an ideal customer or brand ambassador, but with their own individuality that is complementary to your business. Their content should also be specifically aligned, as well. Depending on the brand and goals, a creator that posts makeup tutorials will perform differently than one who posts product unboxings, even though both are in the same beauty category.”
Metrics show that the more aligned an influencer is with a sponsoring business, the higher the engagement rate and ROI will be. Tinysponsor reports seeing engagement rates range from a modest 1.2 percent to a staggering 12 percent, largely based on specific alignment. It also helps to test out a variety of influencers over time – say six to 12 months – to really be able to evaluate long-term results.
4. Pay the Right Price.
Celebrities have historically charged marketers exorbitant prices for sponsorships with no regard to performance. Smaller influencers have built solid followings of their own, but charge a wildly varying range of prices, furthering price confusion. Because small businesses need to ensure they pay the right price for their relative goals, they should consider several factors related to rates.
“First take into consideration reach and engagement when evaluating creators,” Prasad advised. “Creators who interact frequently with their followers drive more results than those who only broadcast. Many social media platforms will algorithmically rank engaged posts higher, amplifying their organic media reach.
“Second, you should verify your alignment with creators’ followers. A highly engaged audience is only valuable to you if they match your business objectives. Ultimately when measuring ROI, a targeted and engaged follower count provides a more meaningful cost basis than general reach.
“Third, consider paying higher or lower rates depending on industry categorizations. Creators posting about video games or luxury travel are generally more valuable to marketers than music or fashion. Similar pricing dynamics seen in search engine marketing also apply to influencer industry pricing.”
To help assess pricing, Tinysponsor has a free calculator here.
5. Stay Focused on Brand Safety.
Brand safety, the concept of using creators that won’t get your brand in trouble because of other content they have used, has been largely overlooked by many platforms, but is incredibly important for businesses.
“It is paramount for marketers to be fully aware of how aligned the creator is with the brands they work with,” Prasad said. “Fortunately, creators are generally consistent in their content. Businesses should be aware of both the nature and degree of their brand safety requirements, when sifting through the creators’ content for any problematic associations. For example, a food and beverage creator known for nightlife settings may be brand safe for an alcohol brand, but not be appropriate for a breakfast food product. Clothing companies should be aware of creators who may post risqué photos.”
Keeping an eye on this will keep your brand out of trouble and avoid “guilt by association.”
6. Ensure Your Campaign is Compliant with Regulations.
Governments and regulatory agencies consistently change guidance related to marketing, including influencers and other sponsored endorsements. Generally, creators must disclose clearly and explicitly any sponsorship relationships. As a business, you must ensure compliance, especially as the FTC will often penalize you as a sponsor first.
Make sure to stay abreast of guidelines and check to make sure your influencers have used appropriate disclosures.
Influencer marketing can provide a lot of bang for your buck and let you test campaigns on a small scale. Follow the advice above and get help from a relevant influencer marketplace or platform to see how influencers can help drive more awareness and sales for your small business.
About Carol Roth
Carol Roth is the creator of the Future File ® legacy planning system, “recovering” investment banker, billion-dollar dealmaker, investor, entrepreneur, national media personality and author of the New York Times bestselling book, The Entrepreneur Equation. She is a judge on the Mark Burnett-produced technology competition show, America’s Greatest Makers and TV host and contributor, including host of Microsoft’s Office Small Business Academy. She is also an advisor to companies ranging from startups to major multi-national corporations and has an action figure made in her own likeness.
Bank of America, N.A. engages with Carol Roth to provide informational materials for your discussion or review purposes only. Carol Roth is a registered trademark, used pursuant to license. The third parties within articles are used under license from Carol Roth. Consult your financial, legal and accounting advisors, as neither Bank of America, its affiliates, nor their employees provide legal, accounting and tax advice.