Marketing Via Paid Influencers Growing Dramatically

Published by: Tim Mischuk On

Maven-InfluencerPaid endorsements by online influencers is now used by 52 percent of online marketers. This number is almost the same as use of display ads (58 percent) as the top paid avenue for online advertising. The explosion was registered in the 2014 State of Sponsored Social Report conducted by Halverson Group.

It destroyed traditional channels. Official sponsorship status in standard TV spots and ads in radio, magazines and newspapers all scored negative momentum from last year (meaning they are less favorable now).

While the study’s impression is that sponsored social is suddenly shifting to be a nearly universal marketing activity, let’s also be fair. The survey was a sampling of a national panel who had some level of accountability or familiarity with sponsored-social marketing. It didn’t include those not accountable or familiar with the topic, so if that universe is vast, the numbers may not be all that impressive. Despite the bias, however, the numbers are quite interesting and have implication for marketers and business owners, large and small.

Sponsored social is effective.
Sponsored social ranked first among all other channels for overall effectiveness, scoring 7.27 on a 10-point scale. It beat out experiential marketing (7.25), celebrity endorsement (6.87) and television advertising (6.54). Based on that list, it’s no surprise that 74 percent would use or recommend sponsored social in the future.

Perhaps the most interesting and tactically useful result from the survey was the average dollar amount marketers paid for each type of post. The average video post will run $554 while a blog post comes in at $384. A sponsored tweet runs $331. But the survey does little by way of telling you who charges what, so assume that high-dollar investments were with high-follower-count influencers.

The survey showed interesting upward trends for brands investing dollars on social marketing beyond a content and organic-focused program. Of those surveyed, 85 percent were moderately or highly familiar with sponsored social and 53 percent had experience with sponsored-social opportunities in the past year. However, almost 30 percent said they had no experience with it, indicating an upside potential, but also perhaps lingering hesitation.

Some 52 percent of companies responding said they had standalone budgets for sponsored social and 25 percent had organizational budgets for the channel in excess of $500,000.

“I ultimately believe that you’re talking about a multi-billion industry,” Murphy says. “To be honest, we may already be there. The difficult thing is we’re the first folks trying to quantify this in any real way, but we already know that all the major media companies are doing sponsored posts. In celebrity endorsements, sponsored posts are included but not always broken out. So this channel may already be that big. We just don’t know for certain.”

Murphy says the audience is the most important part of sponsored social. Without the audience, the publisher has no opportunity to monetize.

Creators are word-of-mouth advocates.

As for influencers, or as the report calls them, “Creators,” the main takeaway for me was that this type of influencer outreach seems to create the coveted stakeholder all brands want: an advocate. Results showed 88 percent of the creators — all IZEA program participants, so again biased but relevant — verbally tell friends about brands that sponsor them. What that tells us is sponsored social effectively turns influencers into true word-of-mouth advocates. That’s pretty powerful stuff if you believe the Word of Mouth Marketing Institute’s statistics that word of mouth is 62 times more powerful than traditional advertising.

Additionally, 72 percent say they share additional posts outside of the contractual agreement for free, adding value for the investment. And 77 percent say they are likely to purchase from brands that sponsor them, meaning the investment results in customer acquisition as well.

“This is something we’ve known for a long time, but never had the ability to quantify it,” Murphy says. “To put a number to that is huge. It underscores that this is more than just a transaction for these people. When someone decides they want to work for a brand and publicly share and endorse them to their followers, it’s much more about creating a relationship and doing so in an authentic way. If they were truly fans of the brand and excited to spread the word, they wouldn’t be doing things outside of what they’re contractually obligated to do.”

Some other interesting nuggets:

The majority of those being paid to create content or refer brands were over the age of 30. In fact, 83 percent of all creators were, with 59 percent ages 30 to 44. Only 7 percent were under the age of 25.
Food was the most prominent category of content followed by lifestyle, parenting, beauty and DIY/crafting. Health, fashion, entertainment, music, pop culture and video games ranked on the list as well. Social media (eighth), technology (11th), advertising (12th) and business (20th) were as well.
Social-media paid-sponsorship posts ranked eighth on the category. This tells me social-technology companies are spending an inordinate amount of money sponsoring social compared to other industries because social is a very small, defined niche of content compared to other verticals.
Twitter, Facebook and the good, old, trusty blog were the top three networks used for sponsored social according to the creators. Instagram and Google+ were close behind with YouTube and LinkedIn next in line.
To their credit, 92 percent of creators were at least aware of the Federal Trade Commission’s guidelines around disclosure for receiving payment for endorsement or promotion. Unfortunately, marketers have a ways to go. Only 71 percent were aware of FTC guidelines in the space. That will need to change, so be aware of the disclosure guidelines.

as posted by JASON FALLS
Digital Strategist, Industry Analyst, Speaker, Author