We all know them – influencers now make up the majority of social networks. It is their job to take others along in their private everyday life, whereby they specifically determine who and what they show. But how do they manage to earn money with it? And why can you profit from it as a company?
Advertising is usually perceived in two ways, consciously and unconsciously. When we see a billboard in the city, we do so unconsciously. We consciously perceive YouTube videos such as “Hauls” because we already know in advance that products and therefore advertising are being shown here. The exciting thing about influencer marketing is that people have conscious and unconscious access to advertising here. So it’s a double effect.
By providing insight into their everyday lives, for example life with children or everyday problems, they come across as trustworthy individuals who create their content at their own discretion. Influencers also usually have a lot of freedom when it comes to creating content in collaboration with companies.
Different types of influencers
For companies and their campaigns, the biggest influencers are not always the best. The professional group can be divided into five categories. Starting with the nano-influencers. These usually have between 1,000 and 10,000 subscribers. The advantages of this grouping are that they maintain close contact with their community and are therefore usually more trustworthy.
Followed by the micro-influencers, which have about 10,000-50,000 subscribers. They have more subscribers for whom they are very trustworthy. Followed by mid-tier influencers, which have about 50,000-500,000 followers. Mid- Tier describes the border between micro and macro influencers. When a company collaborates with this class, it can be expected that high conversion can be achieved through a campaign. In most cases, the community has been built up over years, so that people trust this opinion, especially if a positive effect has already been achieved with a proposed product in the past. The criteria of trustworthiness and reach are important criteria for selecting a partner. Macro-influencers often have half a million to a million followers. In most cases, these people have grown up with social media, have been doing the job for years, and are experts in their field. They have their usual content and can often be very selective between contractors. Mega-influencers range from 1-5 million and enjoy celebrity status.
Such a cooperation must be worthwhile for both partners, but it can cost the company a lot of money. Most of them sell themselves according to subscriber numbers; on YouTube, for example, they earn 300,000 US dollars from a cooperation with a large reach. Small companies or startups can’t afford that. In addition, you can’t always count on achieving success with a collaboration.
It is important to note that for companies, the selection is not always about reach and clicks. It’s quite logical that you reach more people with more subscribers. But you can influence more people with less reach. This is simply because smaller influencers are often more trustworthy and transparent. People feel a more intimate connection with them and trust their recommendation to buy. If you reach a lot of people, but none of them believe you, it will be hard to convince people. With larger influencers, it is obvious that they enter into the cooperation because there is a lot of money in it for them and not because they want to make a serious recommendation. Followers see that, too. Here it is better to approach people who have a smaller reach, but who are respected for their honest opinions. Thus, micro-influencers are often the better decision.
Measurement of purchasing behavior
As already mentioned, companies often orient themselves on the reach and use this key figure for themselves. The problem here, however, is that not everyone who has looked at the advertisement also jumps at it. Most of them simply keep on swiping without paying attention to the cooperation. This is more about the potential reach and not the actual reach. Meaningful key figures are, for example, engagement figures or the conversion rate. Engagement figures refer to likes, shares, swipe-ups or even comments. This shows how the community reacts to the advertising campaigns, whether they react positively or negatively to the product. From this, one could roughly deduce how the campaign was received and how many ultimately became aware of the company and possibly also buy something. The latter, i.e. the conversion rate, measures exactly how often the product link was clicked and you can see how many people actually bought something.
Together with the conversion rate, the ROI value is the most important measurement value for companies. ROI value means “return on investment value”, which means “what have I invested and how much money have I been able to get out of the cooperation? Here you can clearly see whether the investment has paid off or whether you have made a loss.
The chart shows how many entrepreneurs (in Germany, the UK and the USA) believe that influencer marketing has a higher ROI than traditional advertising. More than half believe that influencer marketing is not only as good as traditional advertising, but even better!
We also offer referrals to give you the chance to use influencer marketing, without special contacts, for you!