Does Influencer Marketing Work?

Defining Influencer Marketing

First, what exactly is influencer marketing? Jason Falls described it as identifying the people who influence your target audience and then collaborating with them to share content and messaging.

“It’s about helping you accomplish a variety of communication strategies,” he said on “The Business Storytelling Show.” “You’ve got to think about it in terms of what audience you’re trying to reach, what you’re trying to accomplish with that audience, and then identifying the people who influence them.”

So, influencer marketing goes beyond just having someone post about your product on social media to build awareness. It can also involve enlisting influencers for public relations messaging, driving conversions, improving SEO, and more.

Jason stressed the importance of starting with clear marketing goals and target audiences. Then, determine what channels and influencers allow you to reach that audience best.

An influencer could be anyone from a popular social media figure to local community leaders. For example, if a hospital wants to reach local moms, they could partner with parent bloggers, teachers, or school counselors who interact directly with that audience.

“It might also be that you realize, hey, we’re just trying to influence this audience of parents,” Jason explained. “Well, who else influences them? Think broadly about it, not just about influencers online.”

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Why Influencer Marketing Works

There are several key reasons why influencer marketing tends to deliver results:

Influencers develop trust and relationships with their followers, giving them an increased ability to drive action.

As Qianna Smith Bruneteau of the American Influencer Council explained on “The Business Storytelling Show:” “Why content creators today are so popular compared to your traditional celebrities is they have a level of authenticity and relatability. And that ability to feel like that person’s like you.”

Influencers create content specifically catered to their audience’s interests. So they inherently understand the messaging that will resonate. Patrick Janelle, founding member of the AIC, highlighted that influencers “go in wanting to be a content creator, meaning they go in with the necessary skills or a dream or passion to talk about some topic or create content around some topic that’s entertaining, or informative in some way.”

Influencers have established audiences on the platforms and channels brands want to tap into. Rather than brands having to build their own social media followings, they can leverage influencers’ existing reach. Jason pointed out, “There’s plenty of tools out there that will help you identify people with large followings or who create content around a specific topic.”

Influencer marketing allows flexibility across objectives and can drive both direct response and brand awareness. Author and brand strategist Aliza Licht pointed out it contributes to goals ranging from “reach, impressions, awareness, engagement, click-throughs.”

Clearly, there are many strategic benefits to collaborating with influencers. But the question remains…are the results there to back it up?

Proving Return on Investment

Like any marketing initiative, influencer collaborations need to deliver ROI. But with so many moving parts, how do you reliably measure results?

Everyone I interviewed emphasized the need for detailed tracking, ideally directly tying campaign links to conversions. As Jason explained, to use tracking links to keep track of results.

He continued, “What that, you know, maybe a half hours worth of work extra work does, means at the end of the month, I can hit a button and get a report on how effective my influencers are. And again, I can take the bottom 10% and say, not going to use them again, take the top 10% increase their budget.”

You can use tools like Share a Sale to track results, for example.

However, Jason cautioned that more granular measurement like analyzing performance by individual channel requires additional complexity. Brands must weigh level of detail against effort required.

“The more granular you need to get with your measurement and attribution, the more complex it can be,” he said. “You can however, also use your UTM parameters and your Google Analytics to say let’s look at all the traffic that came from Facebook, and now let’s break it down by those UTM parameters so that I can see each influencer impact from Facebook so you can you can divide and conquer if you need to.”

Influencers also need to take responsibility to track and provide analytics. Jacob Hiler suggested smart influencers will highlight the concrete value they offer brands beyond vanity metrics.

This includes domain authority of websites, expected SEO boost, and examples of past campaign performance. Jason highlighted how even appearances on podcasts and blogs, while harder to quantify, provide SEO value.

“If you understand holistically, the marketing in terms of everything from, you know, influence marketing, to advertising to SEO, etc, then, you know, hey, there’s lots of benefits for being on someone’s podcast, beyond just the exposure to the podcast, audience,” he said.

While hard metrics are ideal, Jason and Jacob noted that ROI depends heavily on the industry. Conversion rates for a niche software company will differ tremendously from an ecommerce retailer.

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Adjusting Compensation Models

Should brands pay based on performance, time invested, or a hybrid model when working with influencers?

Jacob emphasized that pay for performance works best for influencers with extensive reach. For “micro” and “nano” influencers, it fails to account for their time creating content. In those cases, negotiated fees make more sense.

“If they don’t have a lot of followers, then you’re going to need to compensate them for their time,” he said.

Aliza agreed flexible or blended compensation often optimizes incentives. Commission provides “upside” for influencers while tempering upfront costs.

“So first and foremost, a commission-based structure, depending on the brand you’re talking about, can actually end up being more lucrative than a flat fee,” she explained. “I think a hybrid structure of having an initial fee, but then having the upside of a commission-based structure, depending on who it is…it behooves both sides only because palette, it behooves them to post more and to do more, because the more that they share it, the more they’re going to make.”

Overall, Jason stressed that appropriate pay depends heavily on audience size, type, and campaign KPIs. While mega-influencers guarantee mass reach, micro-influencers remain a cost-efficient option to drive awareness and consideration cumulatively.

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Instilling Professionalism in Influencer Marketing

As influencer marketing matures, expert organizations like the American Influencer Council aim to bring more professionalism to the practice. Patrick says this involves establishing standards, providing education, and building relationships between creators and platforms.

“The AIC – one of our goals is to communicate with these platforms,” he said. “We’re able to act as liaison between the creator community and the platform’s themselves.”

Qianna also highlighted the need for business ethics training around contracts, rates, and deliverable timelines. Creators act as marketing agencies but don’t necessarily have traditional corporate infrastructure and knowledge.

“There are over 50 million individuals who identify and are earning as a creator, that’s a tremendous size of a small business community,” she explained. “How sophisticated are these individuals in their abilities as an entrepreneur?”

In summarizing why they started the AIC, Qianna reiterated that the influencer space shouldn’t operate as the Wild West. Education enables sustainable careers for creators and makes the entire ecosystem more effective.

“You need, you know, businesses, setting models and precedents so that other companies have benchmarks to look up to, to, to do things, right,” she said.

Tips for Influencer Marketing Success

Clearly, influencer marketing provides significant opportunity when executed strategically. Here are the best practices suggested by the experts:

• Define your audience, goals and ideal channels before identifying potential influencer partners
• Vet influencers carefully based on audience match, engagement levels and content quality
• Negotiate clear expectations and tracking parameters upfront in contracts
• Compensate fairly based on effort involved and value delivered
• Build long-term creator relationships instead of one-off campaigns
• Leverage creators holistically across platforms and content types
• Provide coaching/resources to help influencers professionalize their personal brands

The days of brands underestimating the power of digital creators have passed. As Qianna stated, “Creators are producing, they’re managing their communities. They’re editing. If you think about the hours that go into it, it’s a tremendous effort, and people don’t understand it unless you’re doing it.”

Jacob reiterated, “With so many things nowadays, you know, obviously, being a content creator, obviously thinking about, you know, how do you monetize your own content? How do you build a sustainable living around yourself?”

Harnessing this influencer engine requires thoughtful strategy and mutual value. But brands who embrace the opportunity stand primed to accelerate awareness and drive performance. By instilling standards and professionalism, the influencer marketing space will only continue to thrive.

So, does influencer marketing work? Yes, absolutely when done well, strategically and with the right people.