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How Influencer Marketing Created Billion Dollar Brands

Reposted from Revolve

Reposted from Revolve

As technology advances, traditional advertising is finding more obstacles before it can reach its intended audience. For example, you’ve probably used ad blockers before on the computer. You probably think a pro of streaming services like Netflix and Hulu are the lack of commercials. Even the “skip intro” button on Netflix was praised! 

Fortunately, the rise of social media influencers is also paving a path for a non-intrusive form of marketing: using the influencers as ambassadors.

Research shows that our youngest counterparts, Generation Z, prefer endorsements from their favorite influencers over traditional advertising. It’s not just them either: many people are more inclined to buy a product after they discovered it through a social media influencer. 40% of people have purchased a product after seeing it used by an influencer. Think of it this way: if an individual you admire is wearing something from a particular brand, it makes the brand look more appealing by association. 

Trust is another reason why influencer marketing is so important. Influencers have already built relationships with their followers, making them a trusted source of information. If you were finally able to lose that last 30 pounds with your favorite influencer’s diet plan, chances are you’ll believe them when they tell you how effective and awesome a certain protein bar brand is. Think of them as thought leaders in particular niches passing along messages that they’ve deemed worthy. Influencers can also be viewed as peers, which also increase trust. In fact, a study by Edelman found that 77% of consumers state that peer reviews are either deal-breakers or deciding factors in their purchasing decisions. 72% of customers trust a business more when it’s recommended by an influencer.

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Daniela Braga x Givenchy

Case Studies

Some successful brands have attained their status through both micro and macro influencer marketing, such as Daniel Wellington. In four years, the $15000 company became a $220 million company and was Europe’s fastest-growing company between 2013 to 2015. Much of this success was due to how much it took advantage of influencer marketing in a time when it wasn’t as common and competitive as it is today. Influencers were offered free watches in exchange for posting about them, and their ROI was tracked through discount codes unique to each influencer. This marketing also gave the brand plenty of user-generated content to post on its social media, giving it a more authentic feel. Financially, it ended up spending a lot less than if it had used traditional advertising.

Another great example of success through influencer marketing is the clothing brand Revolve. Starting off with $50k and now worth $1.5 billion, Revolve launched into fame by being featured on the pages of fashion’s most followed influencers, such as Chriselle LimChiara Ferragni, and Aimee Song. In fact, 70% of Revolve’s sales can be traced back to an influencer. They build relationships with these influencers not just through strategizing social media posts but also experiential trips, such as inviting popular bloggers and celebrities to a weekend in the Hamptons

Revolve realized that most of their target demographic, millennials, spent much of their free time on mobile and were located all over the world. Influencers became the vehicle to reach a global audience. According to their Chief Brand Officer Raissa Gerona, “Working with influencers has been key to our business and using them and their power to influence people all over the world... we can see that because 45% of the people that follow us don't even live in the U.S. We've created this global fan base, and it's been through influencer marketing.”

Traditional Advertising VS. Influencer Marketing

Influencer marketing has a higher ROI than other forms of marketing. Having an elegant ad in the glossy pages of Vogue may make you feel prestigious, but it comes at a $200k+ price tag. Time and Inc will charge at least $100k.  And advertising on a billboard in Times Square costs a whopping $1-4M.

Instead, you could take that same amount to several influencers who can showcase your product among their aesthetic, carefully-curated Instagram feeds. And depending on the influencer chosen, a campaign can cost about $7k-$10k for an influencer with 1M followers. This is a fraction of the price of advertising in a magazine or billboard while still ensuring high traffic. Working with influencers can allow you to target a specific audience and reach your desired demographic directly. 

What to watch out for

Unlike Google Ads, influencers, and celebrities are human beings. Because of this, there are different dangers to watch out for than with other forms of digital advertising. Human beings make mistakes, ranging from accidentally copying and pasting the wrong text in their promotional posts like Scott Disick to deliberately saying bigoted things. For example, in 2018, several brands cut ties with beauty influencer Laura Lee after discovering severely racist tweets against blacks and Asians in her past. So before you decide to partner with an influencer, do a bit of a background check. 

An influencer’s reputation, whether positive or negative, will affect yours. This was especially notable in Nike’s partnership with Colin Kaepernick. It seems like partnering with someone who bravely stood against racial injustice helped it increase its sales by 31% in the days after he was featured in an ad. 

There’s also the risk of inadvertently treating influencers like commodities, reducing them down to their physical features and numbers. Even if their following count is important, you can’t forget the human behind them. Remember, you’re trying to build a genuine relationship, not just throwing products at something. 

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Victoria Justice and Madison Reed x Daniel Wellington

The rise of influencer marketing doesn’t mean that other forms of digital marketing should be ignored. Experiential activations, content strategy, and social media marketing such as Facebook and Instagram ads are all important avenues to hit to stay modern.

How much do all these forms of marketing cost? What combination of influencer and traditional marketing is financially best for you? Stay tuned for our next blog post, where we’ll be breaking down the prices of both!

Best,

Irose Team