The Online Project The Online Project 2018

Transcription

1 The Online Project

2 MARKETERS ARE FROM MARS INFLUENCERS ARE FROM VENUS

3 ABOUT THIS STUDY With influencer marketing on the rise, it is often accompanied by an increase in misconceptions on how influencer marketing is conducted. Is it effective? What are the challenges both marketers and influencers face while working together? This study aims to bridge the gap between both parties once and for all.

4 Marketers Conducted Online Sample Size Face-to-face Interviews MARKETER Online Surveys We conducted interviews with key decision makers in the UAE and KSA for some of the largest brands and Fortune 500 companies as well as surveyed many others. 22% Other 19% 2% 3% Real EstateFurniture 31% CEO S Technology 4% Beauty 6% Auto By Role By Industry 4% Business Development Managers 6% Fashion 5% Marketing Executives Telecom 35% 9% CMO 9% 6% Brand Managers Marketing Managers 13% FMCG 10% Food & Beverage

5 Influencers Conducted Online Sample Size Face-to-face Interviews Online Surveys INFLUENCERS In this study, we conducted face-to-face interviews with influencers in the UAE and KSA from diverse industries. These influencers varied from macro to micro influencers.

6 10 KEY FINDINGS OF MARKETERS

7 1 Marketers Short-term plans signal how marketers are increasingly bullish about influencer marketing 66% Yes 19% No 15% May be Marketers who run well-established social media programs see influencer marketing as a natural extension of these. They acknowledge that an important factor for them to adopt influencer marketing is pressure from internal teams and competitors. Skepticism and past failures are common reasons among marketers who avoid including influencer marketing in their upcoming plans.

8 Marketers 2 Marketers are still figuring out how to measure the performance of their influencer marketing initiatives Engagement rate and sales increase are the preferred metrics to measure the effectiveness of influencer marketing initiatives. 28% Engagement rate 25% Increase in sales (Offline) 19% Performance is not measured 18% Conversion rate 10% Website traffic

9 Marketers An important factor that influences how marketers define the objectives for their influencer marketing initiatives and the subsequent metric is to track their effectiveness level of control that they have on the point of sale. Marketers who rely on 3rd party distribution (e.g. FMCG brands) tend to focus on engagement rate as a proxy for awareness and interest. Marketers who operate their own retail outlets opt to track sales increase as they can effectively implement mechanisms to establish the indirect impact of the influencer marketing initiative. Interestingly 19% of marketers readily accept that they don't measure the performance of their influencer marketing initiatives.

10 3 Marketers Marketers are increasingly feeling the need to compensate influencers with cash as non-monetary compensation is no longer enough Cash is now on the rise and represents 43% of how marketers compensate influencers. $ 43% Monetary compensation 57% Non-monetary compensation

11 Marketers Not long ago marketers would almost exclusively resort to freebies, invitations and compliments to compensate influencers. However, that's no longer the case, especially for influencers with big and engaged followings. Marketers increasingly find themselves competing with other brands for influencers' attention and commitment, which naturally gives these the power to negotiate cash deals. Nevertheless, marketers managing aspirational brands (e.g. premium car brands) are still able to collaborate with influencers with arrangements based on non-monetary compensation like unrestricted access to product and exclusive events, travel, media exposure, etc.

12 Marketers 4 Budgets are on the rise as influencer marketing increasingly becomes a pay-to-play game. During the last 12 months, almost one-fourth of marketers spent more than USD 25,000 in influencer marketing initiatives. $ $ $ 19% $1K or lower 39% $1K -$10K 19% $10K - $25K $ 23% $25K or higher

13 Though budgets allocated to influencer marketing are still small when compared to offline channels (e.g. TV, OOH), these budgets are gaining significance in the context of marketers' digital marketing programs. Not surprisingly, marketers who spend USD 25,000 or more are more likely to have access to bigger marketing budgets (e.g. FMCG). Nevertheless, this group is also represented by marketers who have had success in earlier influencer marketing initiatives and decided to reallocate budgets (from offline and other online channels) to scale up the positive results.

14 5 Marketers Influencers' content quality is the key factor marketers use to define the level of compensation 6% Based on the quality of comments that are on the influencer's profile 28% 11% Based on the amount of followers Based on the results of the campaign 13% Based on the relationship with the influencer 27% Based on the quality of content produced by the influencer 15% Based on the profile of followers

15 Marketers Content quality and campaign results are the main factors used by marketers to determine influencer compensation. Most marketers consider influencer compensation a complex topic. This is due to the intrinsic subjectivity of evaluating content quality and the fact that compensation is determined, in most cases, before campaign results become available. Interestingly, the number of followers has secondary importance for marketers. This is explained by the decline of organic reach among the influencers' own audiences. Nevertheless, the number of followers is still important as it influences how marketers select influencers and also determines the starting point of compensation negotiations.

16 6 Marketers Half of marketers opt to plan and run their influencer marketing initiatives in-house, but not without some pains 52% 18% 11% 11% 5% 3% In-house team PR Agency Social Media Agency Influencer Marketing Agency Media Buying Agency Other

17 Marketers Over half of the marketers run their influencer marketing initiatives in-house. Those who outsource it prefer to work with social media agencies. Marketers who opt for an in-house approach do so motivated by the idea of building direct relationships with influencers and to minimize costs. Marketers who choose to outsource their influencer marketing initiatives are motivated mainly by the belief that working with specialists yields better results.

18 Marketers 7 Finding the right influencers is the biggest pain-point for marketers who run influencer marketing in-house Two-thirds of marketers who run influencer marketing in-house say their biggest pain-point is finding the "right" influencers.

19 Marketers acknowledge that researching and identifying influencers that represent a good fit for their brands is a complex and time consuming process. Furthermore, they say that successfully approaching influencers is highly dependent on personal chemistry and rapport. Some marketers have made attempts to streamline this process by using online tools, with mixed results. 15% Payment terms 18% Unresponsivness during the campaign 67% Finding the right influencers

20 Marketers 8 Marketers identify a lack of budgets as the main obstacle to run influencer marketing initiatives. Budget restrictions was the main obstacle for marketers who didn't run any influencer marketing activities during the last 12 months. Though skepticism of the value of influencer marketing accounts for 20%, this opinion is particularly salient in certain categories like car dealerships. 3% Choosing Influencers 8% Added Value 8% Lack of specialized agencies 10% Technical know-how 12% 42% Budget restrictions If influencer marketing works

21 9 Marketers Hesitant marketers prioritize social media and other digital channels. Marketers inactive on the influencer marketing front during the last 12 months prioritized social media content and advertizing. Influencer marketing competes with budgets mostly with other digital channels like social media (content and advertizing) and marketing. 1% Celebrity collaborations 22% Content 8% Paid search 11% Creation Display Advertizing 12% Events 18% marketing 12% Print 16% Online Ads Ads

22 10 Marketers Proven ROI is not the only factor that would persuade hesitant marketers to adopt influencer marketing. Besides ROI and pricing, access to influencer marketing professionals is a factor that would persuade hesitant marketers to adopt influencer marketing. Since influencer marketing is a relatively recent offering from communications agencies (and individual professionals) marketers find it challenging to discern who can help them plan and run influencer campaigns effectively and profitably. 30% 30% Specialized agencies Competitive pricing 40% Proven ROI

23 7 KEY FINDINGS OF INFLUENCERS

24 Influencers 1 Personal brand is what influencers value the most. While compensation is a key factor in brand collaborations, influencers primarily value the fit of the approaching brand with their own personal brand. The reason why brands collaborate with me is because I know how to entertain and engage my audience through my personal brand so brands need to give me the creative space to do that and not bury me with guidelines Lifestyle Influencer 1.1M Subscribers

25 Influencers Influencers are most appreciative of brands that make the effort to understand their values,audience, content topics and tone of voice. Most are ready to decline brand collaborations that, in their opinion, clash with what they stand for and the message they want to convey, no matter the level of compensation.

26 Influencers 2 Lack of clarity in objectives and scope work is the biggest challenge. Influencers believe that clarity and realistic expectations are key ingredients for successful brand collaborations. Nevertheless, they frequently come across brands with unclear objectives and scope of work. The worst thing that can happen in a campaign is the client asking for things we never agreed on initially. That s one of the reasons why it s sometimes better to work with a social media agency or 3rd party so agreements are drafted early on. Fashion Influencer 120K Followers

27 Influencers Many influencers have learned the hard way that engaging with brands under these circumstances typically lead to ever changing requirements, broken communication, and ultimately, dissatisfaction on both ends.

28 Influencers 3 Specialized agencies are seen in most situations as facilitators. Influencers who worked previously with specialized communications agencies (e.g. social media, PR, media) acknowledge that this plays a positive role in brand collaborations in most situations. Agencies understand us more than brands do and that s probably because they are specialized in working with social media and influencers. They also help us take care of the majority of the leg-work so it s smooth sailing for us to focus on what we do best; create content. Beauty Influencer 900K Followers

29 Influencers In their eyes agencies take care of the "legwork and formalities", including contracts, logistics and payment collection.

30 Influencers 4 Those who work directly with brands value direct communication Influencers who prefer working directly with brands value the opportunity of meeting the brand's representative in person. Working directly with the brand team decreases the chances of miscommunication so it s much more clear. Think of it; when you tell someone something and then it goes through 5 people, you end up getting a completely different message. Tech Influencer 98K Followers

31 Influencers This is with the purpose of having a better understanding of what the collaboration is meant to accomplish and to get quick feedback on ideas. Nevertheless, they also acknowledge that brands often don't have the sensitivity to understand their needs and the willingness to accommodate to their requirements.

32 Influencers 5 It's common for well-established influencers to work with managers. Many influencers with large audience platforms and established reputations embrace brand collaborations as a full-time commitment. As the frequency, complexity, and compensation of their brand engagements increase, it s common for them to partner with managers and talent management agencies. Managers remove emotions from the game. As influencers we often find ourselves in awkward situations about payments, additional FOC posts and what-not. When a manager is involved, they can negotiate better and take care of all the work that comes with it such as contracts, agreements, invoicing, etc Comedy Influencer 1.2M Followers

33 Influencers Full Time These normally take responsibility for the "business aspects" of brand collaborations, enabling influencers to focus their energy on developing content.

34 Influencers 6 Time, effort, and audience size are key factors used by influencers to determine compensation. Influencers say that time and effort are the key factors in determining compensation. This is especially true for smaller and emerging influencers. There is no one size fits all for pricing but the main thing I look at is how much time I am going to spend working on the campaign as well as where the brand is using the content that I create. Follower-base isn t as important as it used to be with organic reach decreasing daily. Lifestyle Influencer 74K Followers

35 Influencers Nevertheless, in the case of well-established influencers, the size of their audience dictates the starting point of compensation negotiations. Some influencers acknowledge that audience size is diminishing in importance as the organic reach in the most prominent social media platforms decrease.

36 Influencers 7 There's no standard way in which influencers evaluate their own performance Smaller and emerging influencers determine the success of their brand collaborations mostly by the qualitative aspect of the feedback they receive from their audience. There are a lot of numbers to look at but what do they all really mean? Just because I got a high engagement rate might not mean I sold products for the brand; it could mean they like my content. I like to look at the quality of responses I get from my community such as what people comment and what they message me saying Lifestyle Influencer 1.1M Subscribers

37 Influencers On the other hand, well-established influencers tend to adopt a more formal approach to evaluate their performance. They're increasingly more comfortable reporting key metrics like reach, engagement rate, and click-through-rates.

38 Thank you The Online Project PO Box Unit Building 4C Dubai Media City Dubai, United Arab Emirates