California Management Review
California Management Review is a premier academic management journal published at UC Berkeley
by Michael Haenlein, Ertan Anadol, Tyler Farnsworth, Harry Hugo, Jess Hunichen, and Diana Welte
Getting a marketing message out to your younger customers is a challenging task even in the best of times. The media consumption patterns of Generation Z (those born in the late 1990s, so aged about 25 or younger today) are fundamentally different from the ones seen in older generations. Instead of watching TV, Generation Z watches streaming services such as Netflix. Instead of listening to the radio, they listen to Spotify. And instead of reading magazines, they rely on Reddit. These shifts have given rise to two main marketing channels: outdoor advertising such as billboards, and mobile advertising, specifically on social media platforms such as Instagram or TikTok. While users on Facebook and Twitter tend to be in their 40s, Instagram attracts consumers in their 30s and TikTok in their 20s. On Instagram, 60% of users in the US are younger than 34, and on TikTok, nearly 40% of users are teenagers between 10 and 19 years. Note that it is precisely this younger population that is more skeptical towards traditional advertising and for whom influencer marketing is, therefore, particularly important.
Influencer marketing (a form of social media marketing involving endorsements and product placement from people and organizations who have a purported expert level of knowledge or social influence in their field) represents a $10 billion industry in 2020 and is becoming of increasing relevance for many firms. Few firms in the fashion, beauty, travel, food, or beverage industries are running marketing campaigns these days that do not include, at least to some share, a collaboration with popular users on platforms such as Instagram and TikTok. However, many marketing managers still have a less good understanding of those platforms compared to their knowledge of more traditional media channels and often find it hard to make the right decision in this fast-moving environment. To provide some guidance in this respect, this article offers specific advice to firms who want to engage in influencer marketing.
1. Understand that each Platform has its own User Culture and Language
Marketing managers have known for decades that communication rarely follows a “one size fits all” strategy. Since the 1960s and 70s, literature has therefore recommended to segment markets, develop differentiated offers for specific segments, and that the young, especially, require proper understanding and communication. Instagram and TikTok are no exception to this rule. A picture that works well in a print advertising or a Facebook campaign may flop on Instagram, and a video that makes a great Instagram story may barely reach any likes on TikTok. What is notable, though, is that these effects go beyond what can be expected by looking at audience demographics alone. Instead, firms must realize that these platforms have their own culture, language, idioms, and styles and that those need to be reflected in their content.
This platform-specific user culture has at least three implications for firms who want to engage in Instagram or TikTok: First, companies need to carefully select those social media platforms in which they want to engage. Since content cannot be easily transferred from one platform to another, each platform requires new skills and resources. Some firms, especially smaller ones, may quickly run out of time, budget, and human resources to be present everywhere. Generally, platform-based thinking (“We need to be present on..…”) is not recommendable. The question is less which platform to establish a presence in and more which target group to reach with which idea and then, in a second step, which channel is most efficient for achieving this goal.
Second, companies need to understand the user before they can establish their own presence, and developing such an understanding requires time. Therefore, instead of setting up a company channel from Day 1, it is advisable to start working with influencers who know the platform better, learn from them, and only engage in content creation in a second step. Influencers, in this sense, not only help to increase reach and exposure, they are essential resources to learn to speak the right language.
Third, companies need to give users a reason to engage with them. Merely being a well-known brand may often not be enough. Look at the restaurant chain Chipotle (@chipotle) as an example. In the beginning, Chipotle mostly showed polished pictures of their dishes on Instagram. However, few users see value in being exposed to pictures that look as if they came from a product brochure. So in summer 2018, the firm started to use a different strategy and instead relied on no small extent in memes, which received substantially higher engagement rates.
2. Realize that Influencer Marketing is often more than Booking a Post
In advertising research, it is widely recommended that communication needs to be integrated across different channels. Instagram and TikTok are no exception to this rule. While booking a single Instagram post with an influencer can be efficient in some cases, only a few can convert isolated posts into sales. Still, examples of such strategies do exist, such as the music streaming service Spotify who encouraged micro-influencers to post about their “year-end recap” on social media end of 2019. Nevertheless, in most cases, multiple exposures to the same content (up to 15) are required, which makes frequency an essential driver of campaign success. To reach such frequencies, influencer marketing needs to be integrated into a larger marketing plan, especially since research has shown that there are strong interaction effects between influencer marketing, advertising, and sales promotions. Such integration impacts influencer marketing in three ways:
First, it means that firms should leverage the content produced by influencers in other forms of marketing communication, such as print advertising, billboards, or emailing. This makes the creation of content an essential part of the influencer value proposition. Note that this content will not be like the traditional advertising content produced by creative agencies. It is not supposed to be since, as mentioned above, each platform has its own culture. Instead of getting a traditional print advertising at a discount, the objective of this strategy is to put the authenticity of social media advertising into the offline space. Such a strategy also implies that the fee paid to an influencer should compensate for two forms of value creation – the production of content (which in some cases can reach commercial quality) as well as the distribution of this content through social media platforms.
Second, it raises the question of exclusivity, which is a topic regularly discussed in the marketing literature. Frequently exclusivity is not enforced by agencies, with the exception that directly competing brands should not be promoted by the same influencer in very short succession. Moreover, the need for being exclusive also heavily depends on the product category. While consumers usually only own one car (which means the same influencer should not work with multiple car brands at the same time), they often use competing cosmetics products in parallel. In such a case enforcing exclusivity may neither be necessary nor credible. Still, exclusive partnerships often emerge naturally when influencers and brands start to collaborate on a long-term basis (usually 3-12 months).
Third, selecting the right influencer becomes critical, especially in an environment where simple measures (such as the number of followers or engagement rates) can be biased and misleading. We provide more advice on how to do this below. To ensure that a post on Instagram is more than product placement, companies need to identify influencers who can reach the relevant community and who actually and authentically use the products they promote. Firms, therefore, need to spend a certain amount of time to brief influencers and immerse them into the brands they are supposed to advocate.
3. Choose when to use Micro vs. Macro Influencers
A common question marketing managers ask themselves is whether they should rather work with one influencer who has 8 million followers (e.g., Jamie Oliver, @jamieoliver), 16 influencers who have 500,000 followers (e.g., Brad Lau, @ladyironchef) or 160 influencers with 50,000 followers (e.g., Molly Tavoletti, @mollytavoletti). Academic research has generally recommended focusing on hubs, frequently defined as the top 10% of users with most connections. However, while smaller influencers will have lower engagement in absolute terms, they tend to have higher engagement rates relative to the total number of followers and a more homogenous follower base. In response, the influencer marketing industry has created a large variety of terminologies, such as mega, macro, micro, and nano influencers, with no commonly accepted consistent definition. While it is without question that niche influencers are critical in times where having a relevant community and authentic content is essential, there is, unfortunately, no simple answer to this question. Instead, three factors need to be considered:
First, the choice should be driven by the objective of the influencer marketing campaign. If a national or international brand wants to create awareness for a new product, then big influencers are the way to go. Not only do these accounts ensure sufficient reach, but they also allow to associate the firm with a face that is easily recognized – a factor especially important for brands with an aspirational image. On the other hand, if a client mostly cares about reaching an audience in a specific geographic location (e.g., national brands, local chains only present in some cities) or aims at creating content that is perceived as highly relatable, then smaller influencers may be the better choice.
Second, the cost of managing multiple influencers should be taken into account. Working with dozens or even hundreds of influencers for one campaign means that dozens and hundreds of people need to be briefed managed. While, in some cases, software may help to automate tasks, this is not possible or desirable in all cases or for all tasks. Influencers with more than one million followers usually have managers who facilitate interactions, but smaller ones do not and may, therefore, be less experienced in the strategic and operational aspects of influencer marketing. Therefore, even if smaller influencers may have benefits compared to larger ones in some instances, the cost of managing them can easily make the net benefit unfavorable.
Third, selecting the right niche influencers is far from trivial. Smaller influencers in the same domain may have a high overlap in their audience, which means their follower numbers cannot be simply added up to approximate total campaign reach. Also, smaller influencers may be less experienced in producing high-quality content, which limits the ability of firms to reuse that content in another context. They may also lack creativity, which leads to multiple influencers generating very similar posts. Few brands may want possible customers to be exposed to very similar content from multiple influencers at the same time since this gives more the impression of advertising than influencer marketing. This raises the issue of how to brief influencers, which we address in the next section.
The bottom line is that there is no straightforward answer to the question of whether large influencers should be preferred over small ones or vice versa. In each case, the decision needs to balance the objectives of the campaign and the cost of managing and finding influencers. In many situations, the recommended course of action will even be to work with a mix of both, in varying proportions depending on the specific situation. Take the Swiss chocolatier Lindt & Sprüngli as an example whose #MyLindorMoment campaign involved a total of 280 influencers of varying sizes. This made #MyLindorMoment the most significant influencer marketing campaign in Switzerland. Within ten days, the campaign generated 800 posts and 425,000 interactions leading to a total reach of approximately 13.6 million – nearly twice the size of the entire population of Switzerland (about 8.6 million).
4. Avoid Managing and Briefing Influencers too Closely
For three decades and since the seminal work of Kevin Keller on customer-based brand equity, firms know how vital customer perception of brand elements is. This is particularly true for iconic marketing assets, i.e., visuals cue which consumers actively and spontaneously associate with a brand. Iconic marketing assets include iconic product shapes (e.g., Coca-Cola bottles), design elements (e.g., BMW kidney grille), textures (e.g., Burberry tartan), advertising figures (e.g., Michelin man), and, most prominently, brand logos. Marketing managers, therefore, have the understandable desire to control tightly any form of communication about their brands, be it within the social media space or outside of it. Nevertheless, in the case of Instagram and TikTok too much control is more often a bad than a good thing, for the following three reasons:
Too much control is more often a bad than a good thing.
First, excessive control necessarily reduces the creative freedom of influencers. In extreme cases, this can lead to a situation where multiple influencers show the same content, sometimes using the same wording, to their follower base. This situation gets aggravated when firms use the same briefing documents for influencers on different platforms. While the message may be the same, how it should be presented is usually different. Instagram may ask for a beautiful story, but TikTok will require a crazier set-up and a careful selection of the associated sound. In some instances, influencers may even refuse to participate in campaigns with too much control out of fear of alienating their follower base.
Second, in many cases requiring approval of content before publication is more efficient than controlling the production of content from the beginning. Of course, firms need to verify the information influencers communicate. In some cases, (think of financial services, healthcare, or insurance) wrong information may lead to legal liabilities. In other situations, influencers may use the product in the wrong way. Imagine an influencer who puts your laundry detergent into a dishwasher. In others, again, the brand may be shown in combination with other brands by mistake. Approval before publication is the best way to balance the necessary creativity of influencer marketing with the risk of misinformation. Approving content becomes particularly essential when dealing with controversial products. Instagram influencer Giovanni Bonamy (@gioboyparis) received substantial criticism for posts targeted towards teenagers featuring a beer bottle. Similarly, Kim Kardashian was heavily criticized for her collaboration with Flat Tummy – an appetite suppressant product that claims to “reduce bloating, support your metabolism, cleanse your system, and improve digestion.”
Third, creative briefings are still necessary. They ensure that influencers focus on the right elements (e.g., showing the hotel which should get promoted and not themselves at the beach in front of the hotel) and that firms get the content they want. Nevertheless, instead of giving strict controls, they should consist of guidelines that influencers should and should not do since less stringent briefings result in more and better content. While influencers usually give the promotion a serious effort and try to be creative, some may be too far from the mark for the client to be useful.
For an example that no briefing can lead to impressive results, look at the Swedish watch company Daniel Wellington. The brand relied exclusively on influencer marketing for growth by sending a watch to a sample of influencers with the only requirement was to post one photo of the watch on their feed. This created a massive buzz around the brand, which became iconic among teenagers and young adults. Daniel Wellington’s owner Filip Tysander invested just $1500 for kick-starting the company 2009, and six years later, in 2015, he sold one million watches worldwide for a profit of $220M.
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