The past several years have seen the rise of the "Influencer economy" as brand marketers attempt to capitalize on the popularity of the latest social media stars. Now that economy is collapsing under the weight of its own expectations as marketers realise that paying a teenaged Viner thousands of dollars to hype your latest energy drink to his followers may not produce the results you're looking for.
For you olds out there, an "influencer" is a young person - usually a Millennial teen or twenty-something - who has built a large following on a social media platform such as YouTube, Instagram, or Vine. Hoping to capitalise on the notoriety of the hottest influencers, brand marketers have been backing dumptrucks full of money to the front doors of these influencers to hype their products. The amount of money these kids can earn is staggering; top YouTube stars, for example, may charge well into the six figures to feature your product on their channels. The idea is that the influencer's starstruck followers will then rush out and buy your product in massive quantities and then tell their own friends about their purchase.
In one sense, influencer marketing is nothing new; brands have been throwing money at broadcast media and celebrity spokespeople for decades, and influencer marketing is just another form of broadcast celebrity endorsement. Kids these days don't even watch cable TV outside of The Walking Dead or Game of Thrones. Why not put your advertising dollars where they actually reach your target audience?
Here's the problem: brand marketers are beginning to realize that, in many cases, the ROI just isn't there. Just because the youngs like to watch DanTDM yuck his way through a Minecraft mod doesn't mean they're going to buy whatever product he's hawking. Brands are rethinking the strategy - which means that the gravy train for top influencers may be winding down. The latest evidence comes from this eye-opening interview with an anonymous social media marketer on Digiday. Money quote:
"We threw too much money at [influencers] and did it too quickly. So in 2014, they were making $500 to show up and take some photos. Then it became $1,500... We've gotten to the point that if we have a meeting with them, and we ask what they do, and they say 'influencer,' we don't hire them... Influencers are going to start disappearing. Brands are going to start realising the amount of followers you have doesn't mean shit. Just because [an influencer's] photos look good and [they] have 200,000 followers means nothing. You can't rely on content creators all day long."
Here's an idea: How about bypassing the influencers and using your marketing dollars to build relationships directly with your customers? Leverage social media to connect with consumers in the consideration phase and build an audience with whom you can communicate directly. Tie engagement to purchase through a single customer identifier. Learn which social media activities lead to repeat purchase, and then recognise and reward them for those purchases. That's customer-centric marketing in a nutshell: a simple three-step process of identifying, understanding, and influencing your best customers.
Such activity might not seem quite as buzzworthy, but it may lead to demonstrable, profitable return on your marketing investment.