Why Most Influencer Marketing Campaigns Fail

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@mike

Founder and CEO of Dealspotr / ZipfWorks. Creating tomorrow's digital ecosystem for deals. Working towards connecting brands, influencers, and shoppers in exciting new ways.

Why Most Influencer Marketing Campaigns Fail

Thinking of running your first influencer marketing campaign? Are you set on working with "micro-influencers" but learning (the hard way) that setting up, running, and monitoring a campaign involving dozens of small to mid-size social media influencers can be a huge time commitment that can suck up resources, time - and may not even lead to any outcomes that resemble the goals you had in mind?

Welcome to influencer marketing, the brave new world that promises brands access to untapped audiences and droves of new customers, but only if they can find that "right" influencer who can promote their wares - at a reasonable cost, of course.

The truth is, influencer marketing is hard. Unlike other forms of digital marketing, which come with ample guidelines, setup wizards, and customer support, influencer marketing is the wild west of digital advertising. Influencer marketing is inherently messy, with each campaign involving lots of personalities and customization, with immature tools which make tracking difficult. In fact, even setting the right goals is hard with influencer marketing, since in many instances sales will not be the direct result of your campaign (more on this later).

At Dealspotr, we've been doing influencer marketing for years and we're intimately familiar with the top challenges facing businesses who are starting to run influencer marketing campaigns. Based what we've seen so far this year, we've put together our guide to the biggest influencer marketing challenges facing small businesses in 2018, leading into 2019.

Influencer marketing campaigns involve a TON of logistics

Running an influencer marketing campaign is not like most forms of digital marketing, such as running ads on Facebook or Google. Influencer marketing doesn't benefit from a convenient setup wizard or a “Start” button that gets your campaign running.

Influencer marketing, especially micro-influencer marketing, involves a lot of people and a ton of logistics. In fact, running an influencer campaign can feel less like running an ad campaign and more like planning an event.

To illustrate, running a typical influencer campaign includes the following steps:

  • Finding your influencers
  • Assessing audience characteristics and brand fit
  • Auditing statistics
  • Contacting and selling influencers to join your campaign
  • Negotiating terms with each influencer
  • Communicating campaign requirements
  • Shipping product samples
  • Scheduling and following up (aka “herding cats”)
  • Reviewing content, communicating feedback, and reviewing again
  • Disbursing payment
  • Tracking performance (what does this even mean?)

So running an influencer campaign takes considerable time, meaning you'll need to dedicate more staff and resources to it than is needed with other forms of marketing. There's also a steep learning curve, which means time investment takes longer to pay off.

One option is to hire an agency or consultant with expertise in influencer marketing to help these efforts. This greatly mitigates risk and will undoubtedly improve your results. However, agencies can be expensive, and you're then outsourcing what may become a critical marketing function for your business.

Alternatively, there are a myriad of tools available in the market to assist with influencer marketing. However, researching these is itself time-consuming, and some of these are quite expensive, requiring significant up-front setup costs or a hefty ongoing subscription fee.

What you can do:

  • Dealspotr is a great platform with which to get your feet wet with influencer marketing. Like LinkedIn, it's a free social network designed around influencer marketing. You can browse and find influencers, connect with them and message them, list your brand, and list influencer marketing campaigns (sort of like a job posting for influencers), all for free. In fact, if you choose to compensate influencers with free product samples only, you can run your entire influencer marketing campaign from start to finish without paying anything. You can choose to compensate influencers with a fee, in which case your only cost of running a campaign is the listed fee you pay to each influencer.
  • Even if you don't run a campaign on Dealspotr, we're just another social network, so our tools are free for you to use. You can maintain your presence, connect with influencers and shoppers, and learn about influencer marketing, all for free.

You'll pay influencers flat rates that are not tied to performance

As digital marketers, we're used to paying for results. When we run ads on Google or Facebook, we're paying for impressions and clicks. When we work with partners with whom we're less familiar, as in affiliate marketing or CPA marketing, we're paying just for sales or conversions.

When you work with influencers, in contrast, you'll typically pay them a fee up-front in exchange for them creating and sharing content about your brand. This is usually negotiated in advance and is not tied to any performance goals.

This presents challenges, because as I'll discuss in more detail below, determining the right price to pay a given influencer is difficult. In many instances, influencers are charging rates that they can receive, and in today's seller's market, those numbers can be sky high relative to the amount of promotion your brand will receive.

In the worst cases, you'll even run into influencers whose statistics are inaccurate or misleading - more on this below.

As we designed Dealspotr, one of our primary goals was to help brands assess the true reach and promotional potential of influencers. This is why we developed our Influence Score metric, which cuts through the noise by ignoring potentially misleading factors and providing a more accurate estimate of each influencer's promotional potential.

What you can do:

  • Use Dealspotr's free influencer directory to browse and discover influencers. It's free to use, and you can reference each influencer's Dealspotr Influence Score to better inform your campaign. If you decide to run a campaign on Dealspotr, these same influencers will be invited to apply to your campaign, and you can manage your entire campaign through our CRM platform.

Influencer marketing is typically a one-off engagement, not a long-term relationship 

Influencer marketing in today's environment is very transactional. Influencers expect to be paid for creating content and conducting a discrete amount of sharing of that content with their audience, and then they move on to the next project.

In our view, brands are generally served with longer-term relationships with influencers. In fact, some of the most successful influencer marketing campaigns we've seen have involved long-term partnerships which might more accurately be called brand ambassadorships. In these setups, “influencers” or simply highly engaged customers, receive incentives to promote a brand over an extended period of time, and serve as advocates of the brand over time.

What you can do:

  • When running your campaign on Dealspotr, each influencer will be allocated a personalized ambassador discount code for your brand. Keep this code active on an ongoing basis, and ask your Dealspotr influencers to promote their code periodically. By making ongoing recommendations about your brand, and providing fans with a unique discount code, brands will achieve more sales than with up-front promotion only.

Influencer fees are often too high

Influencer marketing is hot - and it's a seller's market right now. Most industry trend charts go like this, up and to the right:

While this is great news for the influencer marketing industry, it creates some challenges for advertisers. As marketing budgets are shifting en masse towards influencers, it's no surprise that the rates charged by influencers are rising in step.

Many of the brands entering the fray of influencer marketing are also quite new to this space and many don't have the know-how and auditing capabilities in place to avoid overpaying. The net result is a “gold rush” environment in which many influencers are earning steep fees for promoting brands, creating a “pay to play” reality in which marketers are forced to overpay in order to participate.

What you can do:

  • Rather than negotiate with influencers on a one-off basis, run your campaign on Dealspotr. As influencers apply, you'll see their pre-set fee rate, as determine by our Influence Score algorithm, alongside their social statistics and links to their profiles. You can determine which influencers make the most sense to you and engage with only the ones that look right to you.

Faked statistics is a significant challenge for marketers

In case you haven't heard, in 2018 it's relatively easy to buy fake followers and engagement to boost your stats on Instagram, YouTube, Facebook and other platforms. Unfortunately, many brands continue to rely on follower counts when determining what to pay an influencer, so this can often lead to inflated costs and poor results.

In fact, as we developed our Influence Score algorithm for Dealspotr, we found that including an influencer's raw follower count actually distorted more than clarified the true picture of a given influencer's promotional value. So we decided to largely de-emphasize this factor completely. We instead focus on level of activity and patterns of engagement on individual content posts over time in additional to other factors to develop a better understanding of an influencer's promotional power.

On Dealspotr, you can preview each influencer's Influence Score metrics for each of their social channels and their blog. If you're logged in as a verified merchant, you'll also be able to preview their sponsorship rates for creating a blog post, YouTube video, or Instagram post for your brand. In many instances you'll find that this rate may be lower than rates you may find elsewhere. This is not by accident - we feel that creating a pricing structure that makes it more likely that marketers will achieve positive ROI on their influencer campaigns will lead to greater participation, more choices, and ultimately better monetization for influencers over the long-term.

What you can do:

  • Start your influencer search using Dealspotr's free influencer directory. You can dive into categories, search by keyword, and filter by Influence Score. Influence Score is a powerful metric that summarizes each influencer's true engagement across social platforms, and is much more reliable than raw follower counts. Also, each influencer in Dealspotr's directory has connected their social accounts with us, so we've authenticated their ownership of the accounts they claim on their profiles.

Small businesses are ROI-focused, but influencer campaigns are not

Classical influencer marketing, especially those involving larger influencers, is a brand building exercise - most brands running large influencer campaigns are less concerned with direct sales and more concerned about reach, social engagement, and brand recall.

However, most small businesses and startups are interested in return-on-investment when it comes to working with influencers. If they invest $10,000 in an influencer campaign, they'd like to see more than $10,000 coming back in sales.

The reality of influencer marketing today, though, is that while many influencers are experts in creating great content, most are not experts in driving sales and conversions. Also, many campaign lack the tracking mechanisms to even measure conversions on a per-influencer basis.

Having heard this feedback, we designed Dealspotr's influencer platform around a single primary success metric: ROI.

To us, achieving ROI means:

  1. Minimizing cost
  2. Maximizing conversions
  3. Enabling end-to-end ROI tracking

We minimize cost by:

  • Pre-setting influencer fees based on our Influence Score algorithm, to remove fake followers and other inflating metrics.
  • Removing platform subscription costs from the equation by making Dealspotr's influencer marketplace free to use for brands

We maximize conversions by:

  • Requiring compelling referral discount codes for each campaign. We personalize this for each influencer who runs your campaign. This significantly boosts conversions on a per-campaign basis.

We enable ROI tracking by:

  • Providing a tracking pixel to merchants which tracks clicks and conversions for influencer tracking URLs, PLUS tracks conversions based on influencer promo codes. This is key because social platforms like Instagram don't allow influencers to post URLs, so influencer referral codes are the only way to track sales and ROI.
  • Merchants can view real-time statistics across each influencer for their campaigns on their Dealspotr dashboard

We reinforce ROI by:

  • Each influencer's performance in driving actual sales feeds back into their Influence Score and can increase their fee rate, giving all influencers an additional incentive to drive sales when running campaigns.

What you can do

Influencer marketing is hot because it works. Especially in today's environment where people (especially younger ones) are tuning out ads, brands need to find more organic and authentic ways to reach new audiences. 

But influencer marketing also presents unique challenges, which brands can mitigate by using the right tools like Dealspotr. One of the best aspects of Dealspotr is that it's free. As a brand, you can just create your account, claim your page, and start browsing influencers. Once you feel comfortable, post your first campaign. Start with a small budget (or none at all for a free product sample only campaign), and learn as you go. Hopefully Dealspotr will serve as a great on-ramp to influencer marketing for your brand.

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This guide was published on October 30, 2018, and last modified on October 30, 2018.

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