Navigating the world of influencer marketing is crucial for businesses striving to make a mark.
Influencer marketing is increasingly becoming a core topic in marketing leadership discussions, with influencers viewed as the new form of media. Platforms like TikTok are surpassing traditional media in usage and visibility, with creators and influencers driving huge volumes of traffic. However, the marketing strategies built around these influencers often face challenges.
I'm Mike Jaconi, founder and CEO of Button, a mobile experience platform. I've witnessed firsthand the transformative impact of influencer marketing across various industries. My journey has been about adapting to this ever-changing domain, ensuring we're not just keeping up, but also setting trends in how businesses and influencers collaborate.
In this article, I'll share insights into the complexities and opportunities within influencer marketing, outlining strategies for success in a market where authenticity and technological advancements are key.
Prefer to listen? Check out Michael's appearance on the CMO Convo podcast 👇
The rise of influencers in B2B marketing
Influencer marketing is diversifying rapidly, with new types and models emerging constantly. Traditionally, influencers showcased products, leading to sales and revenue generation.
However, we're now seeing influencers evolve into business owners. For instance, Ryan Reynolds' involvement with brands like Aviation Gin and Mint Mobile demonstrates how an influencer can use their status to drive value, not just for a single product, but for entire businesses.
This shift is significant in both B2B and B2C contexts, and we're only at the beginning of it. Historically, the model revolved around brands paying celebrities for endorsements without a direct financial return. However, as the digital economy becomes increasingly central globally, new models are emerging that offer exciting opportunities for creators and influencers.
Currently, influencers engage in sponsorship, earn commissions on sales, or take on brand ownership roles. But the future holds more innovative models where influencers could share in ad revenue or the value they generate per impression. This evolution promises to introduce new economic structures that are just beginning to take shape in the influencer marketing landscape.
What are the main challenges in influencer marketing?
Influencer marketing, despite its power, faces significant challenges. Firstly, the shopping experiences influenced by mobile-based influencers are often poor. After being influenced, shoppers frequently encounter unsatisfactory shopping experiences.
Secondly, there's a substantial issue with attribution. Many influencers don't receive due credit for the sales and traffic they generate for retailers. Lastly, influencers, who often operate as sole proprietors, lack the engineering and product resources necessary to develop, test, and innovate solutions that could enhance their value and increase revenue. Similarly, retailers often don't have the resources to provide the required technology and infrastructure to support these innovations.
While platforms like TikTok and Instagram have integrated shopping features, like Shopify, the real challenge lies in the shopping experience outside these platforms. Most shoppers frequent big retail sites, and ideally, if they shop on mobile, they should be using the mobile apps of these retailers.
The breakdown in user experience occurs when a shopper, influenced by an influencer, is directed to a mobile web view within a social media app, rather than the retailer's app. This web view lacks stored authentication, payment details, and often leads to a loss of the selected product upon login.
In contrast, when using technology that we at Button have developed, we've seen our retailers experience increases in social media traffic conversion rates of three to four hundred percent. Our technology creates a seamless bridge from the social media application to the retailer's app, enhancing the shopping experience.
This approach allows users to shop in an environment where they don't have to log in repeatedly or enter payment details, significantly reducing the number of steps – from nearly 200 clicks to just three or four – to make a purchase.
This dramatic reduction in effort not only benefits the marketer, seeing their highest value and lifetime value users inside their app, but also provides an enjoyable and seamless journey for the user. Our focus is on rectifying this experience to ensure a win-win situation for all parties involved.
The fundamental belief is that no experience can compare to shopping within an app, especially in terms of conversion rates, identity and payment authentication, and shipping details.
Despite efforts to optimize web experiences, they don't match the efficiency and effectiveness of app-based shopping. Therefore, it's essential to focus on directing users to the retailer's app for the best shopping experience.
Addressing data protection concerns in influencer marketing
Data protection is a crucial concern in influencer marketing. Marketers need to ensure they maintain user anonymity in their attribution methodologies. Companies like Button are making significant progress in creating fully anonymized journeys, allowing marketers to track attribution without compromising user privacy.
Consumers are increasingly wary of their data being misused, preferring privacy-first approaches. Our platform addresses these challenges, aligning with the privacy-first stance and contributing to our business's rapid growth.
Brands that guarantee data protection are more likely to win the trust of influencers, as it assures them that their audience won't face uncomfortable situations. This trust is vital, not just with consumers but also with influencers.
Retail marketers often treat influencers as a subset of consumers, operating as individual entities. Catering to influencers requires viewing them as another important constituency in marketing efforts.
Challenges in attribution within influencer marketing
Attribution should be straightforward, but several issues complicate it. The primary challenge involves app and web link routing decisions.
When a user transitions from one experience to another, tokens essential for tracking can be lost, especially when navigating into the web outside the browser experience of a social media application. Preserving attribution while maintaining identity protection is essential.
Social media platforms often make it difficult for creators to maintain attribution for outbound clicks. At Button, we've developed machine learning solutions to identify where a user experience might break down or lose attribution, and we create models to preserve this in a privacy-first manner.
The breakdown in attribution is a significant systemic issue, affecting not just the user experience but also the livelihood of influencers, who often lose a substantial portion of their potential earnings due to these challenges.
Evolving perspectives on influencer compensation
A few years ago, the prevalent thought among many in the marketing industry was that underpaying influencers was a cost-saving measure. However, this perspective has shifted significantly.
There's now a greater emphasis on fairness and transparency. Marketers are increasingly acknowledging the importance of crediting and compensating both internal team members and external influencers for their contributions.
This change reflects a broader evolution in attitudes, underscoring the importance of treating creators and influencers with respect and fairness, recognizing the significant influence they wield.
The importance of micro-influencers
The influencer market has undergone a substantial transformation. Previously, the typical image of an influencer was akin to high-profile celebrities endorsing products on social media for substantial sums.
However, the current landscape is more diverse, with a focus on micro-influencers who are experts in their fields and create valuable content. These influencers, especially on platforms like TikTok and Instagram, are providing in-depth tutorials and assisting people from various walks of life. Ensuring these influencers are compensated fairly for the value they provide is as important as paying employees for their contributions to a company.
Micro-influencers are becoming increasingly important in the influencer marketing space. For instance, The Wire Cutter, known for its detailed product reviews, can be seen as a collection of micro-influencers, each expert in their respective fields. This trend of expert-driven, detailed content creation is being replicated by independent creators on platforms like TikTok and Instagram.
Looking ahead, the exciting aspect will be the evolution of technology that enhances the experiences of these creators and the value they derive from their influence.
Bridging the attribution gap in influencer marketing
Influencer marketing is primarily measured through affiliate channels, but many retailers lack an app strategy for this. It's crucial to set up and integrate your app with your affiliate marketplace or partnership marketplace software.
Providers like Impact, CJ, Partnerize, Awin, and Rakuten offer solutions in the mobile ecosystem, and Button, as a leader in this area, has partnered with these networks to ensure proper attribution for retailer apps.
Marketing departments need to decide how much emphasis they will place on influencer marketing. Attribution models currently focus on measuring direct sales from influencer activities. Some marketers also engage in co-branding with influencers, which isn't measured in the same direct way. Therefore, companies must determine how to attribute ROI to the influence these partners deliver.
Marketers are often under-resourced and expected to achieve more with less. A platform like Button enables a level of experimentation that is unique in the market. For instance, you can treat every click from a specific platform or influencer differently.
This capability allows marketers to derive significant learnings, such as showing specific audience types a coupon to boost conversions or optimizing experiences for high-monetizing audiences. It's essential to continuously experiment and test new approaches to maximize value.
By addressing these key areas - integrating app strategies, focusing explicitly on influencer marketing, and continuously experimenting with different approaches - marketers can effectively bridge the attribution gap. This ensures fair compensation for influencers and delivers greater value for both retailers and their marketing teams.
The future of influencer marketing: Blending social apps and commerce
The increased flexibility and ability to experiment within influencer marketing campaigns significantly benefit both marketers and CMOs. This evolution allows for more creative collaborations with a diverse range of influencers, leading to more innovative and effective campaigns. With the influencer market rapidly expanding, more individuals are becoming full-time influencers, suggesting that this channel will continue to grow.
To foresee the future of influencer marketing, we look to the trends emerging in Eastern markets, particularly China. These markets indicate that the creator and influencer economy is not just thriving but also expanding considerably. This insight suggests that the influencer market in the West will likely follow a similar trajectory.
In the coming years, we can expect a closer integration of social apps with influencer experiences. Current social app advertising models are under scrutiny, particularly concerning data privacy. A shift towards commerce-based models could offer more privacy-friendly solutions while providing real value for both creators and marketers.
Platforms like TikTok are likely to become increasingly shopping-oriented, influencing other social platforms to follow suit. Despite being a buzz topic for many years, the true fusion of social and shopping experiences is just beginning to materialize, gearing up for significant changes in how influencer marketing operates.
Embracing emerging technologies in influencer marketing
Emerging technologies like augmented reality and new developments like the Apple headset present significant opportunities for innovative influencer engagements. These technologies open up exciting possibilities for retail marketing, allowing for more immersive and interactive experiences. As these technologies evolve, they offer fresh avenues for influencers and creators to engage with their audiences in novel and impactful ways.
The future of influencer marketing and online retail is brimming with potential. At Button, our focus has always been on a privacy-first approach, coupled with a strong drive to propel commerce. This foundation positions us well to leverage these emerging technologies effectively. We are excited about the possibilities these advancements bring and confident in our ability to adapt and innovate in this evolving landscape.
The focus on driving commerce, with a privacy-first mindset, will enable the emergence of new models and strategies in influencer marketing, making this an exhilarating time for those involved in the field.
Need more advice on how to work better with influencers? Need some recommendations on the right partnerships for your brand? The CMO Alliance Community Slack channel is a global network of marketing leaders, ready to help!
