Why Smaller Influencers Are Better Than Big Ones

September 8, 2016

Posted in Blog
GM-blog_09-08

There are many instances in digital advertising in which quantity trumps quality. With a click-through-rate of 0.1% for instance, it makes sense to run thousands of banner ads rather than one.

On the other hand, you generally don’t magnify the effect of influencer marketing by finding an influencer with a large following. In many cases, it makes sense to work with 10 influencers with 100,000 followers instead of one with 1 million. Or it might even be better to work with 100 with 10,000 followers. We have found this to generally be the case: Influencers with smaller followings tend to get more relative engagement than those with bigger followings.

For marketers looking to make the most of their ad dollars, that’s not the best news. After all, it’s easier to work with one influencer than 100. That’s why it’s better to contract with a trusted partner rather than take a DIY approach. This is especially important as influencer marketing has received new scrutiny.

Growth of the market

Last December, the Federal Trade Commission laid down guidelines for disclosure in sponsored content. The commission also filed a complaint against Lord & Taylor for not disclosing that it paid Instagram influencers to discuss its Paisley Asymmetrical Dress. The retailer later settled with the FTC.

As with many advertising technologies, FTC interest signifies that the practice of influencer marketing has gone mainstream. Though no one knows the size of the market, some 75% of brands were using Influencer Marketing in 2015, according to a report from Augere. Some 81% of respondents added that they though influencer marketing was effective.

The rationale is sound. In the current age, advertising is often seen as intrusive and dishonest. Advice from friends on social media and customer reviews are trusted more. A 2015 study by Nielsen found that 83% of respondents said they completely or somewhat trust the recommendations of friends or family. Some 66% said they trusted consumer opinions posted online.

Celeb versus Influencer

Just 8% of respondents in that survey said that celebrity endorsements resonated with them. That may explain why less is more with influencer marketing. Once an influencer crosses the line into celebrity (say with 1 million Twitter followers or more), consumers may chalk it up to an endorsement deal rather than a passion.

Such skepticism is often warranted. In May, for instance, Instagram influencer Scott Disick got caught cutting and pasting social media instructions from the marketers at his sponsor, Bootea. (The update started with “Here you go, at 4pm EST, write the below…”)

The harder path 

Unfortunately, marketers usually want to market at scale. While it might be more effective to make lots of little deals rather than one big one, marketers often don’t have the bandwidth.

That’s why it makes more sense for them to seek a turnkey solution for influencer marketing from a trusted third party, ideally one that has strong relationships with influencers and understands the brand’s mission.

This is in keeping with how marketing is usually done. Brands don’t usually make direct deals with athletes but instead work through a sports marketing agency. The online world is similar, but the tactics are a little different, reflecting the difference between mass and long-tail media. Digital advertising is generally moving more in an individually focused direction where one-on-one conversations with consumer are valued over a carpet-bombing approach. That’s why brands that are in the habit of blitzing consumers with banners may want to rethink that practice as well.


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