The Benefits and Risks of Influencer Marketing for Business Growth
It seems every company has made it a point to include influencers into their marketing plan.
They have a good reason. With one high-profile influencer, your marketing can be leaps and bounds ahead. But, you see, most businesses do it wrong. And when they fail, it causes irreparable damage to their brand, turning customers and those same influencers against them.
If you're willing to face the high stakes, read this article, and we'll help save you from a terrible mistake in your influencer marketing plan.
Risks and Benefits of Influencer Marketing
Sure, for some, cash makes influencer marketing a whole lot easier. But even without needing to spend money, there are tons of possibilities for your brand to gain exposure when industry leaders support your products.
Since there is no proven formula for how to attract influencers (without a check), the best technique you have is one you should already be practicing. Customer-centric marketing puts the focus on your customer's actual needs, attracting a broader audience, and showing the real value you provide.
If you need proof that influencer marketing works, you can take a look at some of the numbers. Like the fact that in 2019, influencer marketing has grown an estimated $2 Billion in marketing size.
While marketing with influencers can be useful to any company, 69% of campaigns are from B2C businesses. Because they're mostly targeting consumers, you'll find most campaigns ran through platforms like Instagram and Facebook.
But even though there are plenty of companies using influencer marketing alongside their traditional strategies, there are potential risks to misusing it. Below, you'll find out why businesses are making the most of influencer marketing, and why some are avoiding it.
Benefits of Influencer Marketing
We've already given you a few reasons you may want to start marketing with influencers. Listed are even more positive impacts of implementing your own strategy.
1. Brand Awareness
Overall, brand awareness is the most significant benefit of this approach. Influencer marketing uses social proof, specifically celebrity and "wisdom of the crowd" proof, to quickly build trust.
2. Less Annoying
Influencer marketing isn't pushy. Consumers see your product from the influencers they already choose to follow. Your product won't become a nuisance to them because you're not forcing your way into their awareness.
3. High Perceived Value
There's a perception that influencers within an industry have knowledge that the general public does not. When they share your product, there's a greater chance to provide value to your potential consumers. For example, if a well-known fitness instructor shares how they use your product, consumers will have greater insight into how the product can benefit their own lives.
4. ROI is Exceptional
Because you don't need to spend money, influencer marketing can fit any budget. Providing tremendous value in your product will be enough to capture an influencer's attention, and if that doesn't work, you're always able to send out free products to encourage participation.
If you do choose to apply funds to your influencer marketing campaign, you can find terrific ROI. Businesses are receiving an average of $7.65 for every dollar they spend on influencer marketing, and the top 15% are earning over $20.
5. Leads Are Better Qualified
The impressive ROI is because of the qualification of leads that the followers make up. When an influencer shows off your product to their audience, you've already found a group who's interested in the niche, and invested in your influencer's opinion.
Risks of Influencer Marketing
While the benefits may have been enough to jump-start your influencer marketing planning, there are potential risks of which you should be aware.
Prominence: Are disclosures easily visible and in a font that stands out from the site/image's background?
Presentation: Can consumers easily understand disclosures?
Placement: Are disclosures posted in places a consumer would likely read them?
Proximity: Are disclosures listed near the promoted product?
Unfortunately, only 11% of influencers were compliant with the FTC's guidelines this past year. Failure to disclose could mean fines your company and the influencer, so it's best to ensure you're following the guidelines above.
2. Fraudulent Accounts
On a separate note, a Points North Group study found 20% of mid-level influencers are fraudulent. 64% of marketers even deemed this a significant concern for their campaigns.
Because of the anonymity of the internet, some social media participants can create thousands of fake accounts and use them to win over influencer deals. When companies see accounts with a hundred thousand followers, they're more apt to work with them as an influencer, but since the followers are fake accounts, the businesses lose their investment. Social media platforms are working to remove these deceptive accounts, but some may still slip through cracks.
3. Audience Reach
If your target audience doesn't use Instagram or Facebook as their social platforms, you're going to find it more challenging to see ROI. Just finding influencers with thousands of followers won't sell your products if they're not interested in your niche.
4. Fewer Short Term Results
There's also a good chance that any efforts won't show significant results until you're past the six-month mark. You may earn small amounts of sales in the process, but it's only after your deals with influencers have had time to blossom that you'll see true income.
But, keep in mind, although the monetary gains can be outstanding, there's also a chance your campaign comes back fruitless. 25% of companies who invest in influencer marketing are losing money or breaking even.
5. Negative Association
Finally, be aware that if an influencer becomes too attached to your product, they may become part of your brand in the eyes of consumers. While this can have plenty of benefits, if the influencer is controversial, they may take your brand down with them.
Weighing the Worth of Influencer Marketing
Paying for influencer marketing isn't ideal. If you can get someone to support your product because they've found value in it, you have an influencer who wants you to succeed.
Either way, influencer marketing has the potential to give you high ROI, so long as you take precautions along the way.
If you're interested in making the most of influencer marketing, take a look at our free guide to using social media apps and tools in your Inbound campaigns. Building better profiles and more prominent accounts could be what helps you connect with influencers. Check out the Inbound Marketer's Guide to Social Media Apps and Tools for more information.
Chris is the CEO at Lean Labs. He enjoys strategizing and creating content that drives results. When not typing away, Chris is exploring nature with his two daughters, wife, and dogs.