Going deeper on influencer marketing
An interview with Mark Dandy of Captivate Influence
I used to work with Mark at Social Chain a few years back and he was one of the most knowledgeable people I’d met on influencers back then and has continued that through to today so I wanted to pick his brains a bit on the space!
You can find out more about Mark on his LinkedIn page here.
Feel free to give Mark a call, or read his book, which you can download for free on his website ➡️www.captivateinfluence.com
In this interview, there are points where I interject with a bit more data to give things some additional context or explanation but otherwise all words are Mark’s!
Let’s get into it…
What do you think have been the biggest changes on social platforms in the past 12 months that have most impacted influencers (whether that is how they price, start relationships with brands, get discovered etc.)?
Mainly due to COVID creators having to actually be themselves again, it might sound counter intuitive, but a lot of creators are used to selling products and working with brands, but during the pandemic people haven’t wanted to see those kind of brand messages anymore, but this has also caused issues in a lot of brand budgets being cut, but still wanting influencers to promote their messaging for free.
It’s been tough for influencers to adapt to this especially in countries where lockdowns have been prevalent and their existing content is a little redundant. Influencers can also be very focused on the aesthetics of how their content looks, and not being able to travel or eat out or do other things like that have massively impacted what they deem to be valued within their feed.
So this has caused them issues as well in terms of working out what people will be interested in when they can’t show off their lifestyle.
It’s almost an existential question of are you interested in me as a person, or the hotels I stay at for inspiration? Pricing has also become an issue as digital has become a lot more prevalent in brand spend, and influencers thinking they should be better compensated, however brand budgets not really aligning with this idea, or brands wanting to dip their toe in the influencer market but not willing to invest heavily in it.
So this has also caused an issue in terms of expectation levels and there not being a realistic valuation from influencers or brands as to where those expectations should be met.
Are there public or private data points beyond engagement rates you are looking at to gauge just how ‘influential’ an influencer really is or is it a combination of gut and data?
This will depend on what you’ve set up to achieve, and what your ROI metrics are. Sometimes you may just be looking at the content which is purely a matter of perception as to what I think is good vs what you think is good.
We look at data as the first port of call to look at audience demographics and if this is going to line up. So who do we want to target and does this influencer have a realistic chance of reaching those people.
We’d then look at the content narrative to see if we do reach those people, are they likely to be drawn in by the content, and then we’d look at how likely they are to engage with it.
A lot of this is done using software which helps us find influencers that meet a specific demographic criteria for example - female, 25-35, interested in travel, restaurants and going out with an audience that meets this criteria as well. We then start to look at it the angle of a consumer, is this content good, am I encouraged to engage, what’s in it for me?
What strategies have you seen that have been most successful for building long term relationships between brands and influencers? Are there certain incentive structures that work the best?
So for me I think we are reaching a little bit of a tipping point within influencer marketing where influencers almost expect to be compensated before you even get to talk about your plans.
It’s our own fault as an industry that we’ve built a ‘pay to play’ model, to which i’ll hold my hands up sometimes brands want brand awareness, you message 100 influencers, ask them what their rates are, pay it and away you go. I’ve been a part of that and it’s now starting to backfire a little.
The aim of influencer marketing was someone had an authentic voice to really tell you what they believed to be true, and we’ve watered that down to treating them as advertising billboards.
Personally if I was to design an influencer strategy from the ground up, i’d be looking to:
Identify our core group of influencers from Macro Talent (100k+) down to Nano Talent (1k+), and then asking them to try the product first of all. No obligations for any posts or anything like that, just pick something from our range you’d like to experience and then let’s have a chat.
From that I’d then expect to talk about how we can make a campaign work for their audience and how we can showcase the brand in a unique way, and then let’s create some ideas together.
Then we look at compensation, I think there needs to be a conversation which is a bit of a mix of an upfront fee or commitment from the brand to bring something to the table.
But then also a revenue share element that aligns the goals of both influencers and brands together to keep creating and engaging an audience for the long term.
Obviously depending on the scale of talent you are working with and the respective audience numbers, those figures will be quite wide ranging, but i think that’s a good basis to look at a negotiation moving forward.
Do certain CPG sectors lend themselves better to cultivating big influencer brands? We have seen this in beauty with the likes of Jeffree Star Cosmetics for example or in beverages with Babe Wine by Fat Jewish (sold to ABInBev).
Yes, much more aligned to beauty, skincare, sin products, mainly because the products themselves don’t really need to be differentiated that much, they also don’t need to be that good, they just need to be branded correctly.
Biggest example of this would be Kylie Cosmetics, if you look at it as a product it started out as a lip blusher, was it that different to other products on the market? No. Was it better than other products on the market? No.
The premium was in the branding and the ability to have one of the biggest stars on the planet promoting it as her own brand.
The element of I use this and I made this for me is a great thing for people to buy into when they want to be that person, it means so much more than a brand ambassadorship, as you truly believe they’ve designed it for themselves because they wanted better.
In reality, they’ve just found a decent supplier in China, spent far more on branding than product development, and flogged it to the masses.
A big slice of the success of brands like Gymshark has been put down to getting into IG and YouTube influencers when they were ‘underpriced’ and when organic reach was bigger on IG etc. Where do you think the biggest arbitrage opportunities are in influencer marketing today?
Influencer-owned brands…
Gymshark probably wouldn’t be able to start in the current climate unless you brought a huge influencer in from the start, gave them an ownership stake, and they were involved in everything from the start.
Of course you can start brands from scratch and advertise them the traditional way, but you’d spend thousands in building an audience and proving your an authority in that space. An influencer can lend your brand that credibility and an audience from the offset, and more than likely bring other influencers on board from their wider circle of friends in to the mix to grow the brand exponentially.
What are some of the biggest roadblocks for influencer marketing today (e.g. certain ad regulations)?
Personally I think it’s price. Brands still undervalue the opportunity, but I also think that as the industry has matured, Influencers have gone the other way and are now starting to overvalue themselves (more at the top end of the scale here but it has a trickle down effect).
ROB: As an aside, there’s actually a really fascinating chart below by IZEA, who looked at influencer marketing payments by race in the US, reflecting smaller supply in terms of Asian and African American influencers in the US with growing demand for more diversity in campaigns. This has led to price premiums for these influencers over Caucasian counterparts (Asian influencers make on average 51% more per post). Of course, the average earnings for all races has gone up dramatically over past 5 years though.
(Data is comprised of negotiated rates between marketers and creators spanning the spectrum of micro-influencers to celebrities, and incorporates self-reported gender and race identifiers.)
MARK: I think this is the biggest barrier to entry because influencers now see it as a fully fledged career, and so they want to make quick money as they’re not sure how long this career will last.
Think of it as a professional footballer would, chasing big contracts as they may only have 10-15 years at the top level, it used to be you’d have to play a few seasons in the first team and you’d earn your big money when you got to say 23-24 years old. Now we have 18 year olds play a couple of games and want the big money.
ROB: Below graph from a study by Frick (2008) looking at >6,000 player-year observations in Germany (pro football players), showed an upside-down U-curve between age and salary (shown in millions here I think). So what Mark is saying is the bottom of the curve (17-21 or so) is rising. Same effect taking place in the influencer market (with probably an even shorter ‘career’ on average vs. pro footballers).
Also from IZEA’s release ⬇️⬇️⬇️
Influencers under the age of 24 command a premium of at least 44% more than those aged 25 years and older (reflecting those shifting dynamics mentioned by Mark).
Influencers with an annual household income of $100k+ or more per year charge an 80%+ premium for a sponsored post compared to their counterparts earning $50k or less per year. (Lifestyle inflation OR shrewder businesspeople, take your pick).
MARK: I think influencers need to be approaching the opportunities as a long term collaboration but there’s far too many looking for a quick win which is diluting the market and making it harder and harder to price effectively.
One of the biggest questions I’m asked from creators is how big do i need to be in terms of followers before I can make money. And if all you want is money, you’re in the wrong game.
We hear a lot of hype about VR influencers. Do you buy it? Has Lil Miquela proven she can drive results?
My biggest issue with this is who owns them. They can be agency owned, rented out to the highest bidder, they can be brand owned, which defeats the point of influencer marketing all together, or they can be individually owned which is just a giant game of catfish.
So no personally I don’t buy it. Is there a place for them within the marketing eco-system? Sure, but i don’t see them as influencers.
So for example a brand could own their own VR “influencer” but the point of influencer marketing was having someone else tell me your brand is good, and as I trust your opinion, I’m likely to give it a go. If you have the brand now telling me their product is good, we’re back to the problem influencers were brought in to avoid.
Can they be a promoter of a brand in general? Sure, you can almost treat them as a brand’s own social channel, with more of a creative look and feel, but I just don’t see it as an authentic way to build trust with people.
ROB: I’ll be something of the opposing view here. Part of me wonders where we are in the hype cycle with this kind of thing, specifically in the ‘trough of disillusionment’, all this energy and extra hype was built up around VR in the mid-2010s for gaming, entertainment, all these wide-ranging applications, and it crashed hard as many emerging technologies do before they start maturing and realising their proper potential.
If you look at Lil Miquela’s YouTube channel or IG comments, people cover her music, talk about her like she is a real human, her like to dislike ratios are good (meaning people aren’t completely baffled or creeped out by the technology), big celebrities are interested in her etc.
Mark mentioned influencer’s own brands as the biggest opportunities, I think Lil Miquela (& the team behind her) as a musician first and foremost, could create their own brand in the future whether in beauty, fashion or something tangential to her interests. Nobody will really know her true ROI until something like that happens (i.e. how many of the 2.7 million convert).
+ Look at where the macro trends are, 12 million people go attend a Travis Scott concert in Fortnite, 250 million people were playing the game in March 2019, people are responding more and more to virtual worlds and experiences. I think the VR dreams people had in the mid-2010s are being realised more slowly than they thought but personally I think things like virtual influencers will eventually slot into that picture, even if it is gimmicky/PR-led at the moment.
For anyone starting a brand and wanting to work with influencers... What would be your most important lessons or learnings? What are the most effective strategies when scaling campaigns for smaller brands for example?
Personally I don’t think Influencer Marketing is the best approach for early stage start up brands, unless you are very niche with a specific message and purpose. Reason being is it can be very hard to find influencers to authentically represent your brand when they don’t know who you are to begin with.
That’s not to say that you can’t start conversations with influencers to let them know who you are and introduce yourself, but that when running an influencer campaign this should more likely be integrated into your wider marketing mix than relying on them alone.
A lot of brands also think that you can work with an influencer and automatically assume they will answer all their prayers, more social followers, more sales, more data capture etc. This is far from the truth and you need to set up a campaign to achieve these things individually which can become a costly process.
As the market is maturing influencers want payment for a lot more things than they used to, but if you can find the right influencers that match your brand that are more in the micro category, approaching them directly and just being up front and honest with what you’re trying to achieve can help significantly. Treating influencers as people and not as media buys will get you farther than any other strategy.
Tying into the above question...Any tips for negotiating rates with influencers and getting the best bang for your buck?
Usually influencers aim high to begin with because they know you’ll negotiate them lower.
Never go in with a figure, give a detailed brief outlining exactly what you want and then wait for them to send you a quote. If you think the quote is really reasonable and well within your budget, then sometimes it’s good to agree to it and start that relationship on the right foot, as in meeting a quote you’re likely to have influencers go above and beyond to create more for you because you’ve been easy to work with.
If you think the quote is high, knock 30% off the quote and start from there. Never play the “What’s your budget game” as you’ll have many influencers and agencies asking you to name your price so they can take advantage.
Always state that you’ve requested exactly what you’re looking for and want a price for it. Otherwise if you go in with £1000 and they would have done it for £300 you can guarantee they’ll take your £1000. Don’t do it.
If you had to make predictions for the biggest changes in influencer marketing in the next 12-24 months what would they be?
I think the space is maturing a lot faster than people expected, but with maturity comes professionalism, and with professionalism comes price increases.
So I think the days of getting loads of content for free and being able to gift a load of influencers a bunch of products, and have lots of content sent back are over.
Influencers are now aligning themselves with professional industries such as Photographers, Videographers, Creative Agencies etc, and so a lot of them will now be quoting you for the content they produce rather than the audience they show it to.
So you’ll no longer be just comparing follower numbers and engagement rates, but the quality of content.
To me this means that although we’ve seen a huge shift towards micro influencers and even nano influencers, the more content production quality comes in to play, the more brands will likely shift their spend back to the macro influencers who with higher budgets and higher production capabilities are likely to get more work as they also bring higher reach when distributing that content.
You also have to factor in the social platforms themselves and how much skin they have in the game. Instagram are doing more and more to reduce organic reach and have influencers selling product directly through their social profiles, which means that influencers may in turn become more accustomed to affiliate marketing than previously.
I also think that Influencers are starting to understand that an audience is one of the strongest things you can have, and that renting it out to brands isn’t sustainable for their long term business interests. And so you will see more influencers setting up their own brands, courses, ebooks etc to monetise that audience themselves.
Closing
Feel free to give Mark a call, or read his book, which you can download for free on his website ➡️ www.captivateinfluence.com