Australian businesses are increasingly spending their marketing budget on creating branded content to engage social media users with large and engaged audiences, or ‘influencers’.
According to a survey of 110 marketers published last week by marketing agency and word-of-mouth specialist firm Contagious, 75% of marketers used influencer marketing last financial year. Of that 75%, close to 80% said they have allocated $50,000 or more for influencer marketing.
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Almost all of the marketers surveyed (96%) said they are somewhat or very likely to undertake influencer marketing in the future, with 82% reporting plans to increase their influencer marketing budget in the next 12 months.
The marketers surveyed believe influencer marketing is highly effective, ranking it the third most effective marketing channel after TV and Facebook advertising.
The survey also found those using influencer marketing have moved away from primarily working with bloggers to seeking out influencers on Facebook and Instagram.
Survey participants said their core objective for using influencer marketing is educating consumer or “shifting perceptions”, with engagement nominated as the most important metric of success by 41% of survey respondents.
Just under one fifth (18%) said cost per impression was the most important measure of success when using influencer marketing, with another 13% nominating sales as their most important metric.
For most of the marketers, influencer marketing involves giving the influencer free products (84%), while more than half of respondents also reported paying the influencer for their services.
Marni Crutchley from Contagious told SmartCompany influencer marketing is “really rooted in credibility and recommendations”.
“The idea is that as social media grows and people are more and more connected to one another, they have the ability for their voices to be heard more than in the past,” Crutchley says.
“Brands are also really affected by the genuine experiences people are having with products and with brands.”
Crutchley describes the rise of social networking as creating a need for brands “to be part of the conversation” and influencer marketing gives businesses access to the conversations that were not able to access through traditional forms of marketing.
But Crutchley says influencer marketing isn’t just about finding the Instagram or Facebook users with the most followers, it is about finding the influential people in the market the business is operating in.
The tailored nature of influencer marketing is one of the benefits for smaller businesses, Crutchley says.
“They don’t have the luxury of wastage,” Crutchley says of SMEs.
“It works really well for small businesses because it is very scalable,” she says.
“It’s comparatively cost-effective.”
However, Crutchley says there are several pitfalls to avoid when using influencer marketing.
“Communication is number one,” she says.
“Credibility is the core element of word-of-mouth and so its important the influencer doesn’t feel like they are just a number on a list.”
Crutchley says it is also important to find an influencer whose audience will be open to the message and the brand being marketed and to make sure the communication between the influencer and their audience is aligned with the brand being advertised.
Finally, Crutchley recommends setting up the correct procedures for any payment between the advertiser and the influencer.
“A lot of the work we do is contracted and the payments are made in a business framework,” she says.
This article was oritinally published on SmartCompany.