The rules of marketing are undergoing a sea change. Agencies have experienced double-digit declines (similar to mall traffic!) as CPG brands bring efforts in house and reduce the number of agencies they work with. P&G, the world’s largest advertiser, has been eliminating agencies and dollars spent for the past few years and plans another $1.25 billion reduction through 2021. Brands can go directly to customers via Facebook, Instagram, and other social platforms without the agency intermediary. Cable cutting and ad blockers further support the growing importance of direct one-to-one marketing.
Rarely have the barriers to entry been so low for new would-be designers and brands. Digital disruption has brought with it hundreds of new digitally native brands vying for consumers’ attention and discretionary spending. Accessing customers via social media and third-party websites is baked into a viable 2018 business plan. Unfortunately, the sheer quantity of content transmitted daily makes it difficult for a brand voice to be heard and for brand images to be found or even seen.
Influencers to the Rescue
The macro shift in marketing is that consumers actually welcome influencers into their lives. While traditional advertising is losing its efficacy and clients, influencer marketing is on the rise. Celebrity endorsements remain a backbone for many brands, but they often lack the authenticity today’s consumers demand. Savvy consumers can detect insincerity as celebrities hawk multiple brands they may never use.
Social media has created a new crop of social media personalities, or social influencers, who generally focus on specific verticals—beauty, fashion, home and food. These hands-on experts develop a relationship of trust and intimacy with their followers based on authenticity. The cadre of influencers has geometrically expanded in tandem with the burgeoning growth of digital commerce. Mediakix projects influencer marketing to be a $5 to $10 billion market by 2020.
According to Influencer Marketing Latest Trends & Best Practices 2018 Report, 92 percent of millennials trust a social media influencer more than the most famous celebrity (did you notice the 16 percent precipitous drop in Oscar viewership). The influencers have legitimate content credibility, expertise, respect, and firsthand product experience. Social platforms have indeed become a key discovery tool.
The business model for influencers is still developing. There’s a caveat to the influencers’ influence with bots that are (mistakenly) counted as potential shoppers and driving up ad dollars with no palpable return. Moreover, influencer marketing is “grossly inefficient” reflecting arbitrary pricing and no standardized process in working with them en masse, according to Jennifer Li Chiang, co-founder, CEO of MuseFind, an influencer relationship management platform. Yet, top earners on Instagram can earn tens of thousands to hundreds of thousands per post.
Exposure and Engagement
According to eMarketer pay per post is the most common pricing model for influencer marketing. Jennifer Li Chiang thinks a large proportion of social media ad budgets aren’t generating the ROI they should, citing an L2 study that concluded micro-influencers (with fewer than 70,000 followers) and celebrity influencers (with more than seven million followers) have the greatest voices. She suggests using both for a successful influencer marketing strategy. She adds, about a dozen micro-influencers whose authenticity aligns with a brand’s positioning is optimal.
As influencer marketing has matured, brands have gone from counting reach, engagement, and sentiment to measuring affiliate marketing and an influencer’s ability to inspire consumers to take action, via a unique tracking code capturing purchases. But what about sales and ROI?
Enter Souler, a platform to watch. Souler is an influencer commerce platform where influencers create their own curated ecommerce stores. They can sell the products they love from the brands they represent directly to their followers, the natural offshoot of an influencer’s day job of promoting product on YouTube, Instagram, Facebook and their blog. A Souler store reflects the influencer’s style DNA and personality, which is the personal uniqueness that creates followers. For followers/consumers, all the products they are influenced to purchase are in one place, resulting in a seamless transaction, including end to end dropship fulfillment. This one-stop platform is a vast improvement over the cumbersome process of toggling multiple affiliate websites to complete a look that too frequently results in lost sales or abandoned shopping carts.
Affiliate Marketing 2.0
Brands benefit with an accurate accounting of an influencer’s impact on sales, in addition to the more elusive measures of brand building and consumer engagement. Josh Wexler, co-founder of Revcascade and Souler said, “With Souler, influencers and affiliate marketing advance to the next stage of digital commerce. The Souler platform unites shoppers, influencers, and brands, a trifecta. We are sure this is the next stage in digital connectivity and commerce.” Another plus for brands is the integration with Revcascade, a technology platform that enables any retailer to launch, operate, and scale their own dropship program.
For shoppers, Souler is evolving into a marketplace of sorts, similar to Instagram. Upon arriving on the site, consumers can go directly to an influencer store or choose to explore influencer shops based on category—beauty, home, food, fashion, and art is being considered. The Souler team is busy vetting the thousands of influencers eager to set up shop on their platform. With about 40 percent of men happy to purchase everything online, according to a Business Insider survey, it should come as no surprise that the men’s influencer category is humming on the Souler platform including influencers Brandon Ferreira and Eric Hinman.
Hundreds of brands have already signed up for Souler including global fashion brand Ben Sherman; cult favorite essential oil wellness/aromatherapy brand Way Of Will; streetwear brand Creative Recreation; handmade accessory designs Billy Baker; iconic women\’s designer Nanette Lepore; and luxuries leather accessories maker Grey New York Grey New England.
In addition to Souler, there are other platforms where influencers and brands can connect, including Stylinity and Winston. Stylinity is a shoppable content management system for social commerce with an app that enables influencers and brand fans to share shoppable styles and earn rewards for their influence. Stylinity has thousands of brands and retailers along with web-based tools that integrate brand and user content to support strategic social media campaigns.
Winston is Authentic Brands Group’s (ABG) proprietary influencer network, developed in-house to build community, tell brand stories and drive the online narrative. Winston now powers influencer programs for Juicy Couture, Aéropostale, Spyder, Airwalk, Tretorn and Jones New York and soon all 30 of ABG’s brands will be integrated. Natasha Fishman, EVP Marketing at ABG said, “Influencers are evaluated by their reach and engagement first and foremost. It’s not enough to have thousands or millions of followers, it’s about their sphere of influence. The followers must be compelled to interact with the influencer and the brands they associate with. Influencers are also evaluated based on content quality, personal brand and aesthetic, as well as their ability to drive sales.” ABG has seen that the right influencer partnerships drive sales and they have reallocated incremental resources from print to influencer marketing. On paying influencers, Fishman commented, “Consumers know that influencers are being paid to represent brands and we are committed to communicating that message. Still, each post acts a stamp of approval towards the brand or product being featured.”
Influencers are fast becoming the new brands and the new voice of authority and authenticity. They will increasingly power commerce. Souler is an entry point into the new normal of the commerce ecosystem where creative passionate entrepreneurs can “put up shop,” work with niche brand Winston is Authentic ds and reach a growing audience of online shoppers. We should all contemplate opening our own shop.