The Rise of Influencer Marketing
Fundamentally, an influencer is someone with a level of knowledge, expertise or social following that enables them to, well, influence other people's decisions. That premise has existed for a long time, but the internet and social media gave rise to a new capability for companies of targeting specific audiences with more precision than a television or radio commercial. As a result, niche, direct-to-consumer businesses offering specific products, and online influencers to peddle those products, have bloomed.
Before the pandemic set in, Influencer Marketing Hub, a research firm, reported influencer marketing was expected to grow to a $9.7 billion business in 2020, nearly a 50% increase from 2019. More recent evidence suggests that companies are still piling in, even faster than predicted.
Influencer MarketingHub's 2020 report, based on a survey of 4,000 professionals, forecasted a massive rise in the growth of influencer marketing. Courtesy Influencer MarketingHub
In the quarter from June through August, for example, across a sample of 4,500 ecommerce retailers, sales and customers driven to brands' websites through YouTube influencers are up 80% year over year, according to MagicLinks, an L.A.-based social media marketing company that helps firms track the performance of their influencer campaigns. Applications from influencers wishing to use MagicLinks' sales tools have grown nearly fivefold from the start of the pandemic. And across MagicLinks' retail customers, which include the likes of Walmart, Target, L'Oreal and Best Buy, influencer-driven sales are up 115%.
Several other marketing agencies also told dot.LA they've seen increased spending on influencer content, and an expansion of the types of companies that use influencer marketing, compared to pre-COVID.
Part of that is out of necessity. With film production shut down due to the pandemic, traditional commercial advertising was hampered. And with marketing budgets crimped, potentially cheaper advertising routes, such as a well-targeted influencer campaign, grew more attractive.
Influence in the Wake of Ecommerce
The pandemic has also caused ecommerce to skyrocket and led people to spend more time on social media, both of which have increased the supply of potential customers for brands to target with influencers.
"Consumers crave real-life stories and authenticity, and influencers are able to highlight brands in a way that feels real and accessible. We are seeing that during the pandemic, this need is further heightened as more consumers are spending more time on social platforms," Grubhub's director of content and social Mandy Cudahy told dot.LA.
The growing sophistication of data and analytics on the effectiveness of influencer marketing has also helped companies create more targeted ad campaigns likely to reach spenders. For example, tools are improving to help brands find the right influencer, track their ability to drive purchases, and even predict how well an influencer campaign will do.
"There's been a much bigger push around nailing down the attribution and ROI," said Kevin Gould, co-founder of three L.A.-based ecommerce brands that rely heavily on influencer marketing and collectively earn over $60 million in annual revenue.
That push, in turn, is helping to nudge brands that have historically shied away from influencer marketing. Part of what has held them back is the fact that the data from traditional channels like television and radio advertising is far more robust than what's available in the influencer space, if only because it is relatively new.
"You're going up against hard sets of data since like the birth of Macy's, so it didn't become a priority," said Jennifer Piña, MagicLinks' director of brand partnerships. "Now it's being forced to become a priority."
As a result, bigger, more traditional brands are moving into what has until now been a channel primarily used by smaller, direct-to-consumer brands. Tito's Vodka, for instance, ran its first influencer campaign in August with Brooklyn-based First Tube Media. Prior to the campaign, "Tito's had never spent a dollar in influencer marketing," First Tube CEO Andrew Beranbom told dot.LA. Superdry, a publicly-traded British clothing company founded in 1985, is partnering with MagicLinks to launch its first large influencer campaign in advance of the holiday season.
How Influencers Change What We Buy, and What They Make
KFC Crocs, an unholy creation of influencer marketing.
Influencer marketing has also given rise to new partnerships between brands that arguably have nothing to do with each other, with influencers as the linchpin linking them together. Examples include a KFC line of Crocs, e.l.f. Cosmetics' Chipotle burrito-inspired handbag and makeup kit, and Forever 21's Cheetos apparel line.
"It's this idea of like, a brand is a brand," said Piña. "What they actually sell or what people purchase from them is oftentimes irrelevant. It's more about the packaging and the moment and the feel and that's what social media does: it creates excitement for something that is not necessarily exciting. Like Crocs: Crocs is like your dad's brand. But it can immediately become cool, at the drop of a pin, once you get the right influencers involved."
Even as data attribution improves and consumers spend more time online in the land of influencers, one key downside to influencer marketing remains: limited control. A company can manage every element of a commercial shoot or Facebook ad, but using an unscripted TikTok or Instagram influencer requires letting go.
"Brands in some categories historically have been super fearful of letting influencers tell their story because it is so important to the sanctity of the brand to keep the messaging really succinct and in line with the brand guidelines," Piña said.
Yet that informality is part of the appeal of influencer marketing.
"Brands get stuck on needing to be perfect or scripted, whereas influencers talk to you like they're your next-door neighbor," said Brian Meert, chief executive of L.A.-based AdvertiseMint, a digital advertising agency. "It's very organic; it doesn't feel like a pushy ask. I think those kinds of elements have enabled us to grow sales for our clients using more of these influencer- and consumer-generated type videos."
Piña noted that while Ralph Lauren, a premium fashion retailer, has been wary of using influencers because of "brand safety," the company recently approached MagicLinks to build out a year-long TikTok strategy. Even as the social video giant's fight with the White House threatened to upend the living of its influencers, TikTok's hold on the traditionally elusive younger demographic – along with other user-generated video platforms like Instagram, YouTube, Twitch and Snap – has become increasingly hard for companies to ignore.
"Any brand that wants to connect with Gen Z, and sell whatever product or service they have, has to engage (with these platforms)," said Glenn Ginsburg, SVP of global partnerships at influencer marketing agency The QYOU. "Moving forward I think we'll see brands start to build deeper relationships with influencers."
Not every brand is poised to get the same value from an influencer campaign, however. An influencer is unlikely to save the day for a travel and tourism company ravaged by the pandemic, for instance. And it remains a challenge to reliably execute an influencer campaign, notwithstanding the emergence of new tools to do so.
"A lot still depends on relationships, conversations and trial and error," said Darren Litt, chairman and co-founder of L.A.-based talent marketplace MarketerHire. "A successful influencer campaign requires a detailed understanding of an influencer's brand, and that's hard to do with tech and AI alone."
Achieving the cost-efficiency of a well-targeted campaign also remains most viable for companies that are best positioned to drive online purchases. Using Kim Kardashian to sell clothing that flatters one's figure, for example, is more likely to drive trackable sales than, say, pushing Pepsi.
"For mass-market products looking to reach a broad audience, TV advertising remains effective because you get the upside of wide reach with the downside of limited targeting," said Litt. That's especially true for products that people don't typically purchase online.
But much like a song that goes viral on TikTok can drive a listening bump on streaming platforms like Spotify, so, too, it appears, can an influencer campaign drive offline purchases.
After all, Dunkin' Donuts saw sales surge following its D'Amelio partnership, even though the girl with over 100 million TikTok followers has reportedly never ordered "The Charli" herself.
---
Sam Blake primarily covers media and entertainment for dot.LA. Find him on Twitter @hisamblake and email him at samblake@dot.LA.
- 'The Interchange' Launches to Connect L.A. Startups to Potential ... ›
- TikTok, Influencer Panic and the Celebrity Economy - dot.LA ›
- TikTok Is Partnering with Ad Behemoth WPP to Offer Creators Potential Advertisers - dot.LA ›
- SAG AFTRA Approves Influencers for Union Protection - dot.LA ›
- More Than $1.5K for 52 Seconds: How Young Influencers Are Racking Up Deals and the Company Behind It - dot.LA ›
- ECommerce Expected To Hit $1 Trillion in Sales by 2022 - dot.LA ›
MagicLinks CEO hopes his company's actions will have ripple effects inside and out
Brian Nickerson, CEO of Venice-based MagicLinks, which provides tools to online video creators to help them earn money through e-commerce, sent an open letter this week to his 25 employees and the 20,000-odd creators and brands in his company's ecosystem.
"Dear MagicLinks Community," the letter began. "Black. Lives. Matter. Our collective way of being, of relating, needs to change. Now."
"To move from words to action," as Nickerson put it to dot.LA, MagicLinks will also be donating cash to the NAACP, the Alliance of Californians for Community Empowerment (ACCE) and the People's City Council. The company is also matching employee donations and giving paid time-off to those who feel they need it, for whatever reason.
"But it's more than the moment," Nickerson said. "How do we systematically change this?"
Nickerson wants the actions that MagicLinks has already taken to galvanize further action. One plan his company has is to put together a panel of black and minority creators to raise awareness of systemic biases among brands in casting and promotional decisions.
Nickerson was deliberate in composing the letter and deciding which initial actions to take.
"It starts with listening and trying to empathize as best we can and understanding the fears of the people who are most directly impacted by this," he said. To that end, Nickerson and his team sought to create a safe space for MagicLinks' black employees to share how the current unrest and its precursors make them feel. One employee spoke of having a relative on the East Coast who was recently jailed, but no one in her family knew where. Another described having to occasionally fear for his life, and the nightmare that his absence would bring upon his mother.
Nickerson, who describes himself as "white, male and privileged," then sought feedback from black colleagues about what to put in his letter. In his first draft, he included a personal anecdote about learning how his grandparents had faced their own form of racism. But after consulting with his advisory team, that wasn't the right message.
"This isn't about my experience right now," Nickerson reflected. "It's sitting with the scourge of racism that's been in our country since its founding and just sitting with that and knowing that it exists and asking what we can do to change it."
In his letter Nickerson invokes a Hawaiian prayer, which he wrote "can be used as a tool to heal the racism and prejudice within each of us." The prayer: I'm sorry. Please forgive me. Thank you. I love you.
Response to his letter has mostly been positive, Nickerson said, with a few exceptions. Some clients and partners have threatened to cut ties. Nickerson's initial reaction was to simply write them off, but he has found power in invoking that same Hawaiian prayer in these interactions.
"Those are people that probably need to hear the message more than anyone else," he noted.
MagicLinks' actions in the wake of the ongoing unrest and the COVID-19 pandemic are the culmination of a change of heart in Nickerson.
"I used to think that as a small startup, once we were successful, then we can do right," he said. "I've changed that dramatically: we have to be doing right as we're going. Even if our dollar contribution to certain causes isn't what Facebook or Google can do, it's important to instill that in the culture and DNA of a company."
Nickerson now wants to empower MagicLinks' network of creators to have more social impact, and for his letter to resonate within his team and out to the community of brands and talent.
"Small actions have ripple effects," he said.
— Sam Blake
Scooters, just redeployed, are pulled off city streets after becoming fodder for barricades
In the last two years, e-scooters have become a common sight on city sidewalks. In the last few days they have taken on a new role as tools of resistance since they are light enough to pick up but heavy enough to cause serious damage. The largest company, Bird, has been criticized in the past for a lack of diversity and for avoiding black neighborhoods.
Social media images have shown protestors using scooters to block off city streets in downtown Los Angeles and tossing them into a fire in Paris.
Demonstrator in DTLA made a cordon blocking the road out of Bird scooters pic.twitter.com/aV8c63SG4k
— Anna Merlan (@annamerlan) May 30, 2020
It's really kicking off in Paris now! pic.twitter.com/GPnWJFYlje
— Jerome Roos (@JeromeRoos) June 2, 2020
Companies have reacted by pulling their scooters from cities, according to Mashable. The timing is terrible since companies had just begun to redeploy scooters as cities eased coronavirus restrictions.
Bird's headquarters is not far from where riots broke out in Santa Monica. Employees have criticized the company for a lack of diversity, which was made worse by massive layoffs in March that disproportionately effected minorities. The company's former chief legal officer once said Bird should not put scooters in black neighborhoods like Crenshaw because people might steal them, according to The Verge.
The company's only statement on protests has been this tweet on Sunday:
pic.twitter.com/P1NG3tpQw6
— Bird (@BirdRide) June 1, 2020
L.A. braces for more curfews after a day of peaceful protests
Windows in the upscale Brentwood neighborhood of L.A. were boarded up Tuesday night.
Thousands of people streamed along Hollywood streets that normally teem with tourists. They protested downtown at the foot of City Hall and marched in the San Fernando Valley. The signs read "No Justice No Peace," "BLM," "Stop Killing." A week of national protests over the killing of George Floyd by a Minnesota police officer continued as people of all colors poured into the streets in outrage.
Frustration over years of police brutality directed at black men and continued inequities in education, health and housing has fueled a national rage. It's also provoked some of America's top corporate players from Nordstrom to TikTok to respond in solidarity with the Black Lives Matter movement. Companies across the music industry, many whose top executive ranks are devoid of black Americans, staged a 'Blackout Tuesday', to reflect and hold conversations about how to support the black community. Other businesses outside the music industry followed suit.
At the same time, the protests seemed to grow even larger after a weekend that was marred by vandalism and looting, across the country as fringe groups broke into stores. Thousands have been arrested, the Los Angeles Times reported, as vandals ravaged some of the toniest neighborhoods including Santa Monica, downtown and Beverly Hills, spurring the national guard to be called in.
But on Tuesday afternoon, it appeared that peaceful protests reigned across the region as a concerned Los Angeles County and city issued curfews for 6 p.m. until 6 a.m. Wednesday.
"We are keeping the curfew in place tonight to protect everyone's safety and help our first responders keep the peace," said Mayor Eric Garcetti.
Exceptions to the curfew are in place for emergency responders, people going to and from work, and anyone traveling to and from participating in voting. There are elections in Pico Rivera and Commerce.
Santa Monica and Beverly Hills, which saw extensive damage in the previous days, set a citywide curfew from 1 p.m. until 5:30 a.m. Wednesday. Santa Monica's curfew is from 2 p.m. until 5:30 a.m. on Wednesday.
"We continue to grieve for the losses to our businesses and neighborhoods on Sunday, and we continue to be outraged over the death of George Floyd and the unacceptable persistence of institutional racism," said Santa Monica Mayor Kevin McKeown in a statement. "Nonetheless, on Monday we showed that we can learn from tragedy, get back up, and commit ourselves to a better city."
— Rachel Uranga
- Snap and Twitter reportedly used by ill-intentioned protesters to ... ›
- George Floyd Protests: L.A.'s Tech Community Reacts - dot.LA ›
- Santa Monica, Beverly Hills announce 1 pm curfews - dot.LA ›
- George Floyd Protests: a16z Launches Fund For Diverse Founders; Snap Drops Trump From Its Discover Feature - dot.LA ›
- Disney will donate $5M to Social Justice Groups - dot.LA ›
- George Floyd Update: Los Angeles County and City Lift Curfews - dot.LA ›
- George Floyd Protests: L.A.'s Tech Community Reacts - dot.LA ›
- George Floyd Protests: Why This Time Feels Different - dot.LA ›
- George Floyd Videos Were Watched Over 1.4 Billion Times - dot.LA ›