Flipping the Script: The Rapid Ascent of Influencer Marketing
- A young lady struts her stuff before the camera in evening gowns. Her catchy handle, Claude Beauty, showcases her love for all things beauty, fashion, and lifestyle. In a video, she chats about her upcoming nuptials, effortlessly dropping in various brand names, such as Nivea, which corporate giants like Beiersdorf pay a pretty penny for, depending on reach.
- Philipp Papendieck, Intermate's CEO, boasts having sealed deals with industry giants like Unilever, Meta, Mercedes-Benz, and Deutsche Post. Unilever's CEO, Fernando Fernandez, reportedly allocates half of his advertising budget to social media, aiming to increase spending on influencer marketing by a factor of twenty. For others, the allocated budget may be as minimal as ten percent, but Papendieck notes a shift in corporate strategy, with decision-making concerns in the hands of upper management.
- Even analysts have yet to single out this topic, focusing instead on marketing strategy as a whole. However, Papendieck asserts that companies preparing for an IPO are increasingly seeking Intermate's expertise to expand their influencer marketing efforts, ensuring they stay ahead in the game. In some cases, corporations invest millions in corresponding campaigns on social media. Naturally, they have high expectations.
- Companies are primarily focused on acquiring new customers, as Christoph Kastenholz, Co-Founder, and Co-CEO of Hamburg-based influencer marketing agency Pulse Advertising attests. "In the past, social media was more about PR because it wasn’t measurable," he says. "But the times have changed." Pulse Advertising keeps tabs on new customer rates in campaigns, maintaining an average of 70 percent. This means 70 percent of those who see the campaigns and make a purchase are new customers. This can be tracked through links if products are linked or if influencers work with codes. Buyers input a code on a website clearly associated with an influencer.
- Another important metric for companies is Customer Acquisition Cost (CAC), determining how much it costs to acquire a new customer. Pulse Advertising has developed an algorithm that shows the media value increases by 7 to 12 dollars for every dollar invested in influencer marketing. This refers to "What have I invested and what do I get? Reach and interactions via purchases." Intermate also devises mechanisms to make successes visible. They've even recruited a data science professor to help analyze post shares, likes, and comments, among other things.
- Ten years ago, influencer campaigns and their potential impact on corporate revenues were not top priorities for the bright minds. Kastenholz recalls the early days of his Social & Influencer Marketing agency in 2014, when he had to hustle to land clients. He'd contact potential clients, only to hear "We don't need influencer marketing" or "Instagram is not relevant to us." Now, the winds have shifted, as the agency turns down numerous clients due to an overwhelming influx of inquiries. Currently, they serve around 100 clients.
- The fashion and cosmetics industry were a perfect fit for social media, but influencers have become vital for companies across a wide range of sectors. One of Pulse Advertising's clients is Blackrock, the US investment company, which uses the agency to get its Exchange Traded Funds (ETFs) in front of the younger generation via Instagram videos.
- L'Oréal, the French consumer goods giant, openly acknowledges that influencer marketing is a regular and increasingly integral part of its marketing mix. The company invests accordingly and, as a result, receives increased scrutiny from investors and analysts.
- The risks associated with influencer marketing are frequently discussed, particularly when it comes to ensuring that influencers do not harm the brand. A prominent example is Adidas, which cut ties with the controversial rapper Kanye West after he made a series of racist and antisemitic remarks.
- Brands struggle to monitor all communication from their numerous influencers, so control mechanisms have been put in place. For example, image and text recognition for comments under posts can detect if someone has expressed controversy, such as affiliation with the AfD. Some corporations are thus attempting to exert tighter control over content, but this can be challenging since the business with influencers thrives on authenticity. After all, Claude Beauty simply recommends what she genuinely enjoys, using her own words and unique style.
Capital Market Receives Influencer Marketing Reach
Corporations are pouring more and more cash into influencer marketing, turning the industry into a slick, professional operation. The days of simply seeking attention and maintaining a polished image are passé. The success of these campaigns is now measurable, as Beiersdorf reports influencer marketing plays a pivotal role, with annual budgets steadily increasing. The company partners with Berlin-based social media agency Intermate for their influencer marketing ventures.
Enrichment Data:-The rise in influencer marketing can be attributed to the shift from broad, reach-focused campaigns to highly targeted, authentic, and results-driven strategies.- AI-driven tools are now commonly used to identify creators whose audiences match a brand's target customer, improving campaign relevance and effectiveness.- Hyper-personalization, powered by psychographic profiling and behavioral analytics, ensures campaigns appeal to individuals, boosting both engagement and conversion rates.- Successful influencer campaigns leverage cross-platform content strategies and affiliate partnerships, aligning incentives with measurable business outcomes.- Key metrics for tracking success include engagement rate, conversion and sales metrics, impressions and reach, return on investment (ROI), sentiment and brand perception, and content performance across platforms.
- With annual budgets steadily increasing for influencer marketing, corporations are also investing in technology to streamline their operations and measure the success of their campaigns, as Berlin-based social media agency Intermate partners with companies like Beiersdorf for data-driven insights and AI-driven tools.
- As the fashion and cosmetics industry was a perfect fit for social media, influencers have become vital for companies across a wide range of sectors, such as Blackrock, the US investment company, which uses influencer marketing agency Pulse Advertising to get its Exchange Traded Funds (ETFs) in front of the younger generation via Instagram videos, demonstrating the impact of influencer marketing on diverse business sectors.
