As the saying goes, you have to spend money to make money. That motto also rings true when it comes to influencer marketing. But strategizing where to best invest that dollar hasn’t always been a clear-cut answer, because more followers don't always equal more engagement. The rise of virtual influencers, which are expected to make up 30% of marketing budgets by 2025, is adding another facet to the market.
"Creator marketing has proven its effectiveness, and the investment has followed, but by and large, the industry has not changed the way it is planning. There is a tremendous opportunity for creator planning to advance further upstream and become more comprehensive as part of comm[unicaton]s planning. The challenge is most brands do not have a sense of owned benchmarks or data to be able to plan effectively," notes Gabe Gordon, co-founder of creative agency, Reach Agency.
CreatorIQ, the influencer marketing platform that secured $40 million in funding back in 2021, and had also acquired influencer marketing analytics platform Tribe Dynamics for an estimated $70 million that same year, is providing numbers to back up that investment strategy. The company, whose clients include the likes of Sephora and Unilever, harnessed insights provided by market research firm Aberdeen Strategy & Research to explore the significant business impact of creator-focused marketing in their latest report, Unleashing the Power of Creators: An Exploration of the ROI of Creator-Led Marketing.
The research was conducted with 204 US and UK marketing leaders in vice president roles or higher across various industries, with the beauty industry comprising 37% of respondents, consumer packaged goods/consumer electronics comprising 28%, and gaming comprising 17% as the three main participants.
A special emphasis was placed on exploring the results of influencer marketing leaders, or the top 20% using these services based on key business metrics such as annual revenue, impression, conversion, and engagement. The team found that the following statistics for influencer marketing leaders, in comparison to traditional brands:
Regardless of the company type, overall investment in online creators increased. “Consumer engagement from creators drives desirability, consideration, and conversion—all parts of the funnel; it drives high ROI and is an effective and efficient spend,” comments Doug Jensen, Senior Vice President Go-to-Market (GTM) Analytics & Activation and Learning Center of Excellence (COE), Enterprise Marketing & Data at Estée Lauder Companies. Longstanding social media platforms such as Facebook and Instagram are seeing more anticipation for growth overall than TikTok—an interesting insight given the fact that users in 2023 spent more time on TikTok (55.8 minutes per day on average) versus Instagram (30.6 minutes) or Facebook (30.2 minutes).
Whereas early-stage creator marketing functioned on a principle of the power of an influencer’s reach and levels of audience connection alone, brands are now tapping into more sophisticated tools. “We’ve gone from asking creators to screenshot their stats to getting real-time data straight from social media platform APIs," states Danielle Wiley, Chief Executive Officer and founder of influencer marketing agency, Sway Group. Wiley also notes that “focusing on quality creator-shared content that aligns with big-picture KPIs” has been a key factor in efficient investments. CreatorIQ’s software also enables brands to better identify the creators that align with their brand vision.
Brittni Starr, Senior Vice President of Strategy at CreatorIQ, tells BeautyMatter, "Historically, creators have been thought of as an awareness vehicle for branding campaigns, but they also have the ability to drive sales and other bottom-of-funnel KPIs. The key today is to take an integrated approach. Brands should identify and segment creators based on specific outcomes. Some creators might be great converters, while others will drive outsized engagement and awareness for your brand. The creators that prove to drive ROI will graduate into long-term partners."
With the increasing cash flow going towards influencer marketing and more faces than ever before on social media platforms to potentially partner with, an efficient and focused strategy is paramount. “Creators are going to be increasingly incorporated into every part of the marketing function. Quality content production is a big problem for brands today. Creator content outperforms branded content in most channels; it's more resonant and more affordable at scale. So, in addition to traditional sponsored posts and brand partnerships, creator content will be the centerpiece of greater marketing initiatives and drive paid social, advertising, owned and operated channels, experiential, TV, and more,” Starr adds. Given the undeniable results, it’s a game plan worth investing in.
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