Marketers increasingly rely on social media personalities for promotional endeavors
Vibin' the Influencer Way:
In the digital realm, a young lady named Claudia, known as Claude Beauty, spins before the camera in a swanky evening dress. Her online fame revolves around beauty, fashion, and lifestyle. When she talks about her wedding prep, it's not just chit-chat – it's a paid endorsement for brands like Nivea. Corporations like Beiersdorf dish out serious cash, depending on the influencer's reach, for such posts. Short video snippets, or "Reels," can fetch hundreds to thousands of euros per post.
The influencer marketing scene is sizzling with professionalism. Businesses are swooning over it, and they're not just after attention or image anymore. They're aiming for results, and luckily, success is easier to track than ever. Beiersdorf, for one, swears by the power of influencer marketing, with their budget in this category "constantly expanding." They partner with Intermate, a social media agency based in Berlin, for their marketing campaigns.
Intermate, helmed by CEO Philipp Papendieck, is a sought-after name in the industry. He's signed contracts with bigwigs like Unilever, Meta, Mercedes-Benz, and Deutsche Post. According to him, Unilever CEO Fernando Fernandez is pouring 50% of his advertising budget into social media, with plans to boost influencer marketing spending 20 times! For others, it might be as little as 10%, but the responsibility is gradually moving upstairs into top management.
Analysts haven't zeroed in on this area specifically, but Papendieck points out that "companies planning for an IPO are coming to us more frequently, eager to ramp up their influencer marketing to prep for the future."
Now, remember those seven-figure sums we mentioned? They're not just reserves for the rich and famous. Businesses expect big returns from these campaigns. Take Christoph Kastenholz, co-founder and co-CEO of Pulse Advertising, for instance. He serves brands like BMW, Nestlé, Blackrock, Telekom, H&M, and Hugo Boss. In the past, social media was considered more of a PR tool because it wasn't measurable. But those days are long gone.
Pulse Advertising keeps track of how many new customers their campaigns bring to corporations. On average, it’s a whopping 70%! They monitor this by linking products to influencers, using codes, or tracking discount codes during checkout. Another crucial metric for businesses is the Customer Acquisition Cost - how much does it cost to acquire a new buyer? On top of that, Pulse Advertising claims that for every dollar spent on influencer marketing, the "media value" soars by 7 to 12 dollars.
But wait, there's more! Intermate doesn't leave any stone unturned when it comes to tracking success. They scrutinize shares, likes, and comments on posts, and don’t forget about the types of comments. They dig deeper by analysing and contextualizing all the data gathered.
Just a decade ago, the idea of corporations scrutinizing the impact of influencer campaigns on their revenues was like a science-fiction novel. Kastenholz remembers those early days of his social and influencer marketing agency in 2014. Back then, he'd knock on doors, receiving replies like, “We don't need influencer marketing” or “Instagram isn't relevant for us.” But the winds have changed. The number of inquiries to his agency has surged, with him turning away many clients today. Phew!
Intermate maintains a low profile and never discloses the number of its clients. Similarly, corporations are tight-lipped about their spending on influencer marketing.
Fashion and cosmetics have a natural affinity with social media. But don't get fooled – influencer marketing isn't just a trend in the beauty sector. One of Pulse Advertising's clients is Blackrock, the US investment firm, which promotes its Exchange-Traded Funds (ETFs) to younger generations through YouTube videos.
Influencers have become vital cogs in the corporate machinery. So much so that they're frequently mentioned in annual reports. L'Oréal, a French consumer goods giant, is a shining example. When queried, the company stated, "As influencer marketing is a permanent and ever-growing component of our marketing mix, and we’re investing accordingly, the area has gained increasing importance for various stakeholders, including investors and analysts."
The topic of influencer marketing also crops up in companies' annual reports in relation to risks. Businesses must ensure that influencers don't damage their brands. For instance, Adidas severed ties with rapper Kanye West in October 2022 due to his racist and antisemitic comments.
With so much power in the hands of influencers, control measures are needed to prevent any potential brand damage. For example, image and text recognition technologies can scan comments to detect support for extremist groups like the far-right AfD. As a result, businesses are attempting to exert more control over content while still maintaining the authenticity that makes influencer marketing so effective. In the end, it's about finding the perfect balance between control and freedom.
- Social media agencies like Intermate, with CEO Philipp Papendiek, are increasingly partnering with businesses to manage their influencer marketing campaigns, as evidenced by their work with clients such as Unilever, Meta, and Mercedes-Benz, who are planning to allocate 50% of their advertising budget to social media and 20 times more to influencer marketing.
- Pulse Advertising, an agency serving brands such as BMW, Nestlé, and Hugo Boss, claims that for every dollar spent on influencer marketing, the "media value" soars by 7 to 12 dollars, and their campaigns bring an average of 70% new customers to corporations, linking products to influencers, using codes, or tracking discount codes during checkout.
- Influencer marketing has become a significant component of various businesses' marketing strategies, leading to its mention in annual reports, as shown by L'Oréal, a French consumer goods giant, who considers influencer marketing a permanent and ever-growing component of their marketing mix, and allocates their investments accordingly. However, the potential risk of influencers damaging a brand's image, as seen with Adidas and Kanye West, necessitates control measures, such as the use of image and text recognition technologies to detect support for extremist groups like the far-right AfD.
