Social media has changed every aspect of our lives and it’s now changing how we buy. The peak of TV and radio Ads is over, and social media is taking control with its global community. Put it this way; if Instagram were its own country, it would be the third largest in the world and the fastest growing averaging %5 per annum. With this enormous reach, it was almost inevitable that some users reached near-celebrity status. That is when Influencer marketing rose to prominence.

What is an Influencer? And how to use them

An Influencer is a person on social media whose following has grown to accommodate significant numbers of fans. Some are “legitimate celebrities”, musician Katy Perry and actor Leonardo DiCaprio for example, both have large followings, while others are merely everyday people, who have created a personal brand solely through their online activities.  These are the new celebrities, and their status should be considered when looking for endorsements.

There is a difference, however, between the two, and it is that Influencers are more natural in their stardom. Instagram users do not passively consume adverts, as they might when watching TV; they actively post and Influencers do the same. Friend’s and family’s photos are displayed alongside those of influencers, often with little distinction.

“Followers trust their opinions, actively engage in their content and genuinely consider product recommendations.”

This brings us to why Influencers are so effective. Trust. Followers trust their opinions, actively engage in their content and genuinely consider product recommendations.  A brand who wishes to market products can sponsor or offer their products to Influencers in exchange for featuring in posts and reviews, gaining access to audiences of potential millions.  From computer games to sustainable fashion, this method has proved to be a prosperous and cost-effective way of generating business in a world migrating online. It’s no wonder that the influencer marketing Industry is estimated to be worth $7 billion. Effective use of Influencers can be a far more successful and considerably financially sensible strategy compared to more traditional approaches. This is why many brands are opting to increase their budgets.

The Popularity problem, the Micro-Influencer solution.

There is however a  paradox that exists within the Influencer market. Popularity and trust have an inverse relationship. Once the influencer reaches a certain size, roughly 100,000 followers, the engagement rates (the percentage of followers liking or commenting) in their content begin to decline. In short, this results in fewer likes per follower and a less engaged audience. For a product designed for a mass market this is perfectly acceptable yet the Influencers, as an advertising strategy, become less efficient. The Influencer is losing the authenticity that made them valuable, combined with the fact that larger influencers receive more attention from brands, leading to higher prices.  Step forth the Micro-Influencer.

“Micro-Influencers are specialised, connecting like-minded individuals who are interested in their lives.”

Micro-Influencers are the real gemstones in the Instagram mine. Say you want to reach 500,000 followers. A brand could choose to pick a large, well-known Influencer, pay a premium for their less engaged audience ( around 2% ) for a higher cost per sale. Alternatively, for the same price, a brand could have 50 influencers with 10,000 followers each with a collective engagement rate of upwards of 10%. That translates as 35,000 extra engagements for brands. The reasons behind this disparity, lie in qualitative reasoning.

Micro-Influencers are specialised, that’s how their following has grown, connecting like-minded individuals who are interested in their lives. A travel enthusiast, for example, will have a diverse range of followers, yet that diversity is connected by a mutual love or curiosity of travel.  In large influencers, this specialisation is diluted by numbers. Factor in the Instagram algorithm, which prioritises posts similar to ones liked in the past, to be displayed at the top of the feed, and an entire campaign is specifically targeted to the desired audience. Micro-Influencers are also far more engaged with their followers; many are more than happy to converse with them privately or in the comments of posts. They are enhancing the community surrounding the micro-influencer.

“Agencies have begun to appear, generating dialogue between Influencers and brands while charging a fee.”

For brands, however, the micro Influencer does represent a problem when it comes to scaling. As a campaign’s desired reach rises, the number of Influencers required also increases. This has the potential to be a drawn-out process, to analyse the value that the influencers may bring as well as assess whether they are interested, negotiating contracts etc. Micro-Influencers are also harder to locate than their more popular counterparts, further impacting this process. This makes Micro-Influencers efficient in cost but less efficient in time.  A brand could do this directly, but using an external source to remove some time constraints is becoming increasingly common. Agencies have begun to appear acting much in the way they do in other industries, by generating dialogue between Influencers and brands while charging a fee on top.

Agencies have become an extremely valuable part of the Influencer Market and their assistance in finding suitable influencers for a campaign should not be discounted. However, in this fast-paced world, we are already seeing innovations aimed at avoiding the use of agencies, which brings us to Programmatic Influencer Marketing.

Programmatic Influencer Marketing, The Next Step.

Programmatic Influencer Marketing software identifies, books and optimises Influencer Marketing campaigns according to audience and performance automatically. Automating this process means that no extra labour is needed, from the advertiser or an agency. A brand chooses their criteria for a campaign, audience numbers, demographics, engagement rate, what the post should look like etc, and Programmatic Influencer Marketing programmes will scan and select the Influencers and audiences that are suitable. This is where Programmatic Influencer Marketing diverges from agencies. Agencies would then select these influencers and create dialogue, negotiate contracts,  Programmatic Influencer Marketing does not, for it does not need, too. Influencers are paid on a CPM (price per thousand followers) and notified automatically about a campaign, should they be selected, Programmatic Influencer Marketing also monitors the posts and can create accurate reports in real time.

“Programmatic  Influencer Marketing combines the Specialisation of Micro-Influencers, with efficient scaling methods.”

Programmatic Influencer Marketing also has anti-fraud protection, assessing and removing accounts from the database, if robots are being used to boost the followers of an account. The use of databases has been commonplace in online business since its inception. The difference between programmatic Influencer Marketing M and traditional Influencer Marketing is that it combines the use of these databases with automatic communication with Influencers. Operators of Programmatic Influencer Marketing assist in making sure the campaigns specifications are met by influencers, in other words,  quality control and management of influencer and brand safety. Programmatic Influencer Marketing programmes are also an affordable alternative to agencies, as the extra service fees do not apply. This type of programme is likely to grow in its usage and is already seeing success, For now, though, only one Berlin-based startup has implemented it.

Influencer Marketing is here and it’s here to stay. With so many approaches already in operation, this fast-paced market poses exciting options for the future.