Don’t get caught under the influence
As the Mad Men make their final toast, Instagram, YouTube and Snap deliver on social media’s original promise — peer-to-peer advocacy — and it’s returning over 6 bucks on every ad dollar!
Just as the blockchain technology model is delivering on the original, ‘decentralization of power’ dream that inspired the Internet, ‘influencer marketing’ is now delivering on the original promise of social media. Influencer marketing involves gaining social media endorsements and product placements from influencers — that is, people who possess an expert level of knowledge and social influence in their respective fields. In essence, the relationship between brands and consumers is radically transforming from master-and-servant to peer-to-peer.
Over the last five years, influencer marketing has grown from obscurity to an $8 billion business, and brands are set to spend $15 billion on influencer marketing by 2022. Driving this growth is the cold hard fact — businesses are making over $6 for every $1 spent on influencer marketing.
When working with influencers, brands must allow influencers to take control of the narrative to preserve the authenticity of what is being communicated. Today’s consumer can tell the difference between an advert, personal recommendation, and an advert masked under a personal recommendation. For influencer marketing to have impact, establishing an aura of authenticity and credibility is key. The best influencer marketing campaigns are very organic and do not look like advertising. They work best when brands engage influencers to tell a story on behalf of the brands in intuitive ways.
Fueled by a growing mistrust of traditional advertising and media, the Millennial and Gen Z generations are influenced by a higher number of people than previous generations. Online influencer types are rapidly proliferating into every conceivable interest niche and micro-niche. We all hear about how Kylie Jenner, Cristiano Ronaldo, and Selena Gomez all have over 200 million followers on Instagram. But just behind the reality TV mistresses, globally recognized soccer players and pop stars are folks like Ryan, the 7-year-old host of Ryan ToysReview who is hauling in a whopping $22 million in revenue from his YouTube account. Or there is Tyler ‘Ninja’ Blevins the most followed streamer on Twitch.tv with over fourteen million followers and an average of over 50,000 viewers per week who watch him play Fortnite live for $3 per month.
Almost overnight, this shift has turned into a huge business even the biggest brands comprehend and embrace. Big brands now get that if they can gain the participation of a critical mass of trusted influencers who validate their brand in leading social network environments, the rest of the market generally follows. In other words, engagement is the new impressions.
I have never been big on management books, but I think Malcolm Gladwell who authored, The Tipping Point and Outliers, had it basically right when he observed, “There are exceptional people out there who are capable of starting epidemics. All you have to do is find them.”
Introducing the ‘Gen-Narrators”
To make your bets in the influencer marketing game you need to know which squares to put your chips on. The ‘Gen-Narrators’ represent the new rising authorities and key influencers from the Millennials and Gen X generations that sit at the nexus of innovation, media, politics, entrepreneurship, risk investing and environmental concern. Gen-Narrators act as industry DJs who curate, remix and share high-value content that inspires conversation and debate as a way to build a distinct, authoritative, and trusted influencer brand that pays.
Gen-Narrators enjoy consuming and engaging with online content and brands at a much higher rate than previous generations, and favor visual media to evoke reader reaction. Gen-Narrators take their online brand reputations very seriously. They are truth-seekers who want to inspire support for their causes and passions while being wary of trolling and cyberbullying.
While the potential ROI is indisputable, 68 percent of marketers acknowledge that finding relevant influencers is their most significant marketing challenge according to a Tapinfluence and Altimeter study on the state of influencer marketing. When looking for influencers, marketeers should ideally engage people who already have an affinity for their brands. If people already love your products, they will speak about them with passion and knowledge, and this will, in turn, inspire others. Consumer social networks such as Instagram, YouTube, and Snap, have made it easier to identify top consumer influencers. However, identifying a broad base of professionals who influence industry is more difficult.
When the same Tapinfluence/Altimeter study interviewed influencers and asked to provide reasons for their participation in this form of marketing, nearly 70 percent admitted that their main inspiration was to earn some money. 54 percent of influencers say they will work with brands who respect them as they would any other publisher. 57.5 percent of them also claimed that they engaged as influencers to make an impact or effect change. Brands must remember that while influencers like to be able to earn revenue, they will not do so at the expense of their audience.
There are three types of influencers: Celebrity Influencers, Macro Influencers, and Micro-Influencers. Influencer marketing generally does not focus on celebrity endorsement. Micro-influencers perform the bulk of successful influencer marketing (at least 90 percent of it). They are normal people who have built up a solid social media following. 70 percent of teenage YouTube subscribers say they relate to YouTube creators more than traditional celebrities.
A social media and influencer network for professionals
Studies show that 59 percent of micro-influencers believe Instagram to be the most effective social media platform for engaging their target audience. There has yet to be a dominant platform for professional influencers. Our new initiative at Cryptonite is to create this platform.
Back in 1976, when a 21-year-old Steve Jobs needed a marketing expert to help him launch Apple — ‘the world’s first personal computer’ — he called Intel to ask who made their sharp-looking ads and was told its was Regis McKenna. Regis went on to teach Steve Jobs how to incite raging marketing infernos with s single match by focusing on gaining the awareness and support of the top 1 percent of the consumer technology influencers. With the birth of social media, the fractionalization of media in general, and an increasingly mistrustful new generation of buyers, the rules have changed. Rather than focusing on the top 1 percent, brands need to target the top 30 percent. As may be viewed by the inset chart, the percentage of a generation audience classified as ‘influential’ has been growing rapidly as time online continues to proliferate.
If you are interested in playing a role in the creation of this platform that focuses on identifying and supporting innovation-minded professionals, either as an influencer or investor, let me know — tony@cryptoniteventures.com. We are in the process of making this happen!
Some more fun facts we learned on our journey to find out
Digital media usage continued to accelerate in Y/Y 2018 (+7 percent) vs. 2017 (+5 percent) Source: eMarketer/Mary Meeker Internet Trend Report 2019
Since 2017, the Y/Y time consumer’s social media time spent on YouTube is up in 2018 +5 percent (to 27 percent) and Instagram is +6 (to 19 percent). Source: eMarketer/Mary Meeker Internet Trend Report 2019
The use of mobile devices for news continues to grow. As of spring 2017, 45 percent of U.S. adults often get news on a mobile device, up from 36 percent in 2016 and 21 percent in 2013. (Pew Research)
The gap between television and online news consumption is narrowing. As of August 2017, 43 percent of Americans report often getting news online, a share just 7 percentage points lower than the 50 percent who often get news on television. (Pew Research)
Two-thirds of Americans (67 percent) get at least some news on social media. This represents a modest increase from 62 percent in 2016, but similar to mobile, this growth was driven by substantial increases among older Americans. (Pew Research)
Many Americans believe fabricated news is sowing confusion, and about a third (32 percent) say they often see made-up political news online. Nearly two-thirds of U.S. adults (64 percent) say fabricated news stories cause a great deal of confusion about the basic facts of current issues and events. (Pew Research)
Americans have low trust in information from social media. Just 5 percent of web-using U.S. adults have a lot of trust in the information they get from social media, nearly identical to the 4 percent who said so in 2016 (Pew Research)
98 percent of digital consumers are social media users, and adoption is high even among 55–64s (94 percent). An average of 2 hours 22 minutes per day is spent on social networks and messaging, although this figure has started to decrease in specific markets. (Global WebIndex)
As social networks have evolved into multi-media platforms, digital consumers are now as likely to use them for keeping up with the news as to stay in touch with friends. 16- 24-year-olds show slightly different preferences; their most cited motivations for using social media are to fill up spare time and find funny or entertaining content. (Global WebIndex)
22 percent of digital consumers have liked or followed a brand on a social network in the past month, and more than 4 in 10 use social networks to research new brands or products, making it the second-most important channel of all. (Global WebIndex)
While Facebook Messenger has a 5-point lead for membership, WhatsApp leads by 5 percentage points in terms of visitors rates. Snapchat comes in on a distant third, though this service does see much higher figures in North America, especially among the Generation Z. (Global WebIndex)
People online have an average of 8.5 social media accounts and tend to use each platform for different purposes. That said, over the past year, we have seen an appreciable slowing in the number of accounts held per internet user, across generations. (Global WebIndex)
28 percent of users of four major social platforms outside of China engage with live streams each month on any one of these services. Facebook takes the lion’s share, with the largest user base as well as the highest engagement rates with live video. (Global WebIndex)
Facebook is still the dominant social platform in terms of membership but falls behind YouTube in terms of weekly visitors. YouTube has fewer registered members but has visitor rates that are 7 percentage points higher than its membership. It’s the only major social service to find itself in this situation and shows that significant numbers of its visitors are either not logged into their accounts or not even members in the first place. (Global WebIndex)
YouTube is a strong second behind FB, with Facebook Messenger then having a decent lead within the third tier of services that includes WhatsApp, Instagram, and Twitter
