While influencer marketing is clearly here to stay, which function in an organisation is in charge of influencer marketing efforts remains unclear. A recent survey by marketing and media consultancy Ebiquity revealed that while branding or PR teams typically manage and commission influencer marketing activities, the longer a brand has been working with influencers, the more likely it is that the branding team will be in charge. For brands who are new to the space and have invested in influencer marketing for less than two years, 38% pass the baton to the branding team, while 19% leave it to their PR teams. However, for brands who have invested more than five years in this space, more than half (52%) put their branding team in charge while 28% lets their PR team take charge.
Ebiquity's "The rise and rise of influencer marketing" report added that understanding which function commissions and funds influencer marketing activity gives a clear indication of the relative maturity of the discipline within the overall marketing mix. Brands often use relatively modest PR budgets to fund influencer marketing when it’s in its infancy and in growth phase, most likely as test and learn activations with tightly controlled environments and content. Then, as spend increases and influencer marketing can justify its own, independent line on the budget, the branding team increasingly takes over. This is often followed by the growth of specialist in-house influencer teams accompanied by decreasing reliance on specialist external consultancy assistance to manage influencer relationships. The longer brands work with influencers, the more confident and competent they become in running those relationships themselves, and the more comfortable they are navigating a key part of the influencer marketing challenge, managing the content and creative output.
Ebiquity's previous influencer report published in June 2020 showed that in 2019, brands invested an estimated US$8 billion in influencer marketing, and 30% of marketers planned to increase spend in 2020 pre-COVID, with a further 44% saying they would invest at least the same as the previous year.
The pandemic also did not stop brands from investing in this sector. Out of 59 brands surveyed, at least 35% of the respondents agreed that the pandemic has accelerated its use of influencer marketing. The survey also found that brands that were already have a medium to heavy usage of influencer marketing prior to COVID-19 have invested significantly more in it during the pandemic. Additionally, respondents across all categories in Ebiquity's survey said they were planning to increase their investment in influencer marketing in 2021. Some categories, such as finance and beauty, said it will increase by as much as 50% to 60%.
Although spend is increasing in all sectors, measurement of returns on investment (ROI) when it comes to influencer marketing remains unclear.
According to the report, current metrics used by brands include engagement rates (45%), potential reach (44%), number of video views (32%), and vanity metrics such as advertising equivalent value (10%). Some brands also employ metrics such as click-through rates and the use of unique discount codes (37%). However, with such metrics, the report still showed that many advertisers are still unsure about the bottom-line return on investment that influencer marketing is delivering to their brands. They are also not confident about how to measure ROI.
This proves a tricky situation for brands, especially at a time of COVID-19 where many CMOs and marketing directors are facing severe budget cuts. In times as such, having to justify every penny marketing teams spend and demonstrating ROI is critical to sustaining investment in all marketing channels. Majority of the brands surveyed (71%) that are light spenders on influencers agreed that they do struggle to measure ROI, while just 5% disagreed. For brands who are medium spenders in influencer marketing, 71% also identified with the struggle, while none disagreed.
To aid in the measurement conundrum, Ebiquity has provided four ways to have more efficient measurement of ROI:
- Adopt a test-and-learn strategy to influencer marketing – brands should compare and contrast the impact of working with regional or local influencers in one part of the country while doing nothing with influencers elsewhere
- Make sure brands are tracking the right data and metrics to measure the true impact of the content that influencers generate and share
- Separate influencer activity out from other media and marketing activity
- Apply the test-and-learn approach to new channels or platforms (such as TikTok) early
Why brands still invest in influencer marketing
The COVID-19 pandemic last year has caused a drastic shift in content creation, as producing new, relevant creative was a key challenge given that content studios and production houses forced to shut. In this instance, influencer marketing was able to play a role in providing advertisers with an opportunity to use influencer-created, authentic, and highly relevant content. During this time, brands with medium usages of influencer marketing were found to be most likely to have turned to influencers to help them solve this challenge (57% agreeing, 14% disagreeing), while 20% of brands with heavy usage agreed and 10% disagreed. However, given the lack of experience in the space, and specifically in working with influencers and managing output, this did not apply to lighter users, with 24% agreeing but 46% disagreeing.
According to Ebiquity, there are four reasons why brands choose to invest in influencer marketing:
- With in-person interactions impossible, there has been a major increase in social media usage up to 82 minutes a day for 2020, an 8% increase on 2019, according to eMarketer.
- Influencer engagement rates have remained steady or increased during the pandemic
- With many content studios shuttered and production budgets strained, influencers can provide brands with bespoke creative
- Influencers can provide a direct line to customers for brands looking to deepen relationships and generate awareness
With influencer marketing rising in importance in the marketing and advertising industry, Ebiquity's principal consultant Athar Naser said the time has come for brands to deploy the rigors of marketing management and measurement to influencer marketing too. This includes the use of econometrics and testing. "Without serious scrutiny, [influencer marketing] cannot hope to emerge from the shadows and clutches of metric-lite PR where it has languished for too long." he added.
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