The Rewards and Risks of Influencer Marketing

By Tom Earnest on Oct 14, 2021

Influencer marketing is nothing new. It’s been around since before social media marketing came into the picture. For years, businesses have used the influencers of the era to, well, influence people to buy their products. Some of us still remember the McDonald’s commercial in the early 1990s featuring Michael Jordan playing Larry Bird for a Big Mac and Fries. That was one form of influencer marketing, although it’s now more accurately known as celebrity endorsement.

However, social media influencers have changed the landscape. Influencer marketing is quickly becoming one of the leading methods for marketing. More and more marketers these days are including it in their client’s digital marketing strategies.

But before you jump on this trend and start pitching influencer marketing to your clients, you need to know if it’s actually effective. And understand the somewhat hidden drawbacks of influencer marketing. In this article, we’ll cover the good and the bad of influencer marketing. It’ll help you get an accurate picture of whether it’s worth the risk and investment.

Who Exactly Are Influencers?

Before we begin, let’s first clarify who we call influencers. Today there are different types of influencers, and hence more options for marketers. So you need to know which the best ones are for your clients’ businesses. Most marketers already know this. But here’s a quick overview of the five types of influencers for those who may not know:

1. Celebrity (Mega) Influencers: 1 million + followers
2. Macro Influencers : 100,000 – 1million followers
3. Mid-Tier Influencers: 20,000 – 100,000 followers
4. Micro-Influencers: 5,000 – 20,000 followers
5. Nano-Influencers: 1,000 -5,000 followers

If you don’t know which category of influencers are suitable for which businesses then you might need the services of a white label digital marketing agency. Now, let’s get into the pros and cons of influencer marketing. These aren’t limited to social media but also apply to display advertising.

The Good Aspects of Influencer Marketing

Influencer marketing has a lot to offer, but only if you use it strategically and responsibly. Here are some benefits of this type of marketing:

1. Influencer Marketing Has the Potential for High ROI

We all know that it can offer a great return on investment. But you might not know that influencer marketing can offer a better ROI than some other marketing campaign. According to the MediaKix 2019 survey, influencer marketing can generate 11 times the ROI as compared to some other forms of digital marketing.

So you stand to generate $5.2 for every $1 spent if you can do it right. Only businesses that don’t understand how influencer marketing works fail to generate revenue from it.  But you can fix that by improving your client’s digital marketing strategy.

2. It Can Have Long-Term Benefits

Influencer marketing can increase brand awareness. So even if your clients don’t get as many sales they can still gain potential customers’ attention. You can then use other types of marketing to convert them. Also, the quality of these leads may be higher because you’re reaching a relevant audience.

60% of the marketers in the MediaKix 2019 survey said that influencer marketing is more effective than brand content. Because 61% of customers trust influencer content while 38% trust brand content. If the influencer’s endorsement seems genuine then that can help build long-term trust with a wide audience.

3. You Can Save Time with Influencer Marketing

In influencer marketing, it’s the influencer that creates the content and not the marketer. This is a key difference between influencer marketing and celebrity endorsements or other types of marketing. Hence it can save a lot of your time that you can reallocate to creating better strategies for some other channels.

The Bad Facets of Influencer Marketing

While influencer marketing has a lot of upsides, you can’t ignore the cons. Here are some drawbacks of influencer marketing. If this isn’t your domain then a white label digital marketing agency can create your clients’ marketing strategies and help you avoid these negatives:

1. Choosing the Right Influencer Is a Big Challenge

Finding relevant influencers that align with your client’s brand identity is a challenge for 61% of marketers. Also, some influencers have fake followers which can be difficult to spot. That’s a problem because such followers don’t engage with the influencer’s posts and your marketing materials. A lot of effort goes into matching your client’s products to the influencer’s persona. If you can’t get much engagement on it then it’s a waste of time and resources.

2. Influencer Marketing’s Effectiveness Is Not Easily Measurable

Marketers have a difference of opinion about how to determine your choice of an influencer partner.  75% of marketers say that verified traffic is the key indicator to determine if you should partner with an influencer. But others use engagement to gauge the effectiveness of influencer marketing. ROI, organic reach and conversion rate are some more markers to measure the results.

But how do you determine the success of an influencer marketing campaign? If the campaign is aimed at direct sales, you can always measure the source of your landing page. If it’s social media, you can always monitor likes and views. But other than that, it there are some challenges, because your client won’t have direct access to data analytics that are only available to the account owner – the influencer themselves.

Things Can Go Sideways

Influencer marketing can go really wrong, really fast. You might already know that when you link your client’s business to influencers then you risk their personal life choices reflecting badly on your client’s business.

An example of that is the college admissions bribery scandal of 2019. Influencer Olivia Jade’s bad reputation due to the scandal made the cosmetics brand Sephora drop her because of the bad PR. Another infamous example is when Scott Disick posted the instructions sent by the brand as his Instagram caption. As a result, people lost their trust in the product.

You can’t ask influencers to follow a script because their users will quickly smell inauthenticity. But if you don’t then you risk them saying something inaccurately and damaging your client’s brand. 7 out of 10 customers say that they would unfollow influencers if they sense disingenuous content. So sometimes you’re taking on a bigger risk with influencer marketing than what it’s worth.

Create a Remarkable Digital Marketing Strategy

Perhaps the best way forward for marketers today is to merge content marketing with influencer marketing. Carefully choosing the influencers and creating relatable content are two of the most important components while designing your client’s digital marketing strategy. Umbrella is a white label digital marketing agency and we have influencer marketing experts on our team. So, we can find the best influencers for your clients’ businesses and offer you great results. Contact Umbrella and find out how you can benefit from our services.