Influencer Marketing a Blueprint for Maximizing Impact

November 2019

The CMO Guide

Influencer Marketing A Blueprint for Maximizing Impact

www.regalix.com Introduction

In recent years, large corporations have begun changing the way they advertise on digital. It was reported last year that Procter & Gamble reduced its digital advertising spend by $200 million.1 As did Unilever who cut back on their digital ad-spend by a significant margin. Lack of transparency, murky practices, and a vocal customer base have had a negative impact on the industry. In addition, it was reported in 2018 that over 30%2 of the world’s devices had an ad blocker installed. This increasingly popular trend has posed to be a challenge for programmatic ad buying and the digital advertising industry as a whole, because even if businesses invested substantially in digital ads, their ads were either not being seen at all or they were not reaching the right customers. With rising advertising costs and falling returns, businesses have been looking for more innovative ways to attract customers. Influencer marketing is one such way that companies like Airbnb have struck gold. The company signed big-name celebrities—Lady Gaga, Drake, Martin Garrix, Wiz Khalifa, and Stefanie Giesinger, to name a few—to promote their properties, especially during high profile events such as Coachella. The company’s celebrity influencer program started in 2015 when Mariah Carey, Airbnb’s first celebrity customer, booked a luxurious Airbnb mansion in Malibu. Obviously, the company rolled out the red carpet and asked her to promote their property during her stay there. What began inadvertently as a one-off social media post is now the company’s standard influencer program. In two years, Airbnb has racked up 37 sponsored posts by top celebrities, which has given the company 18 million likes, 510,000 comments, and an overall engagement rate of 4%. The total combined reach of its Instagram initiatives for those two years was 966 million. 3

Early success with campaigns such as Airbnb’s ensured that influencer mark eting remains a constant fixture in the modern marketer’s arsenal of tools. Influence r marketing ad-spend is expected to reach $8 billion to $10 billion by 2022. This represents a five-year compound annual growth rate (CAGR) of 38%.4 According to a report by Linqia, 39% of brands plan to increase their influencer mar keting budget this year. 93% of marketers in the study also said that they would be spending more than $10,000 on their campaigns.5 Influencer marketing enables marketers to widen their reach and deepen their engagement. The average influencer engagement rate across industry verticals is 5.7%. In comparison, the average engagement rate for brands on Instagram fluctuated between2% only and 3% in 2018.6

It is not just B2C marketers who are jumping aboard the influencer marketin g bandwagon. B2B marketers are doing the same. In fact, influencer marketing is slated to be one of the top four tactics that B2B marketers will use in 2019 (See ima ge 1). The adoption of influencer marketing in B2B is expected to grow to 48% by the end of 2019, up from 31% in 2018. 7 Yet, marketers struggle to identify the right influencers to work with, engage them in a manner that leads to success and measure ROI.

2 The CMO Guide to Influencer Marketing - A blueprint for maximizing impact Figure-1

B2B tech marketers’ planned adoption of trends in 2019

Video marketing 68%

ABM strategy 64%

On-demand content strategy 55%

Influencer marketing strategy 48%

Purchase-intent targeting 44%

Advertising on emerging social channels (e.g.Snapshot, Instagram stories) 44%

Programmatic ad buying 43%

Mobile marketing 41%

AI-powered data analytics 36%

Generational campaigns 30%

Chatbot-powered marketing 30%

VR-or AR-based customer experiences 14%

Published on MarketingCharts.com in December 2018 | Data Source: Spiceworks

Based on a survey of B2B tech marketers across organizations in North America and Europe. Figures show % planning to adopt each trend by the end of 2019

Source: MarketingCharts8

The CMO Guide to Influencer Marketing - A blueprint for maximizing impact 3 Accelerating the impact of influencer marketing

Influencer marketing is no longer about influencers merely posting a video or picture on social media. While traditionally such strategies worked well, they don’t work as well anymore, especially in a B2B context, because purchase decisions in the B2B world have become intricately complex, the buying cycles are multilayered and are therefore longer, and involve, at a minimum, six to eight decision mak ers. At the same time, the practice has matured over the years, and fatigue has set in, causing marketers to look for newer ways to get the results they want . While best practicesdiffer based on market, industry, and budget, here are our recommendat ions that work across the board.

Add value

Customers are looking for businesses that add value to their lives or their work. Take the beauty industry. In the past, influencers merely posted Instagram pictures of new products, and that was enough to generate a buzz. Today, these same influencers are creating tutorials on how to use the product, reviewing the p roduct in great detail, and conducting 24-hour wear tests to reflect a typical da y in the life of a regular customer. B2B marketers have experimented with guest bloggi ng, podcasts, video interviews, ebooks, and more, with tremendous success. To succeed in today’s mature influencer market, businesses need to go beyond showboating and deliver value for their customers. Without it, campaigns come across as being simple marketing and sales gimmicks, and will be viewed with suspicion.

17% of organizations have over half their marketing budgets allocated to influencers.9

4 The CMO Guide to Influencer Marketing - A blueprint for maximizing impact Source: Divvy’s ‘Back to the Future’ microsite11

Picture this:

DivvyHQ is an award-winning content planning and marketing software company that wanted to elevate its reputation and engage more actively with potential buyers. The company conducted a survey to distill the top challenges and insights around content planning and marketing. This led to a series of five campaigns that included 30 marketing influencers addressing key challenges that companies highlighted during the survey. The outputs included a research report, a strategy ebook, a series of video interviews, and more. Each campaign was supported by blog posts, organic social content, influencer promotion, and some paid social. The final campaign repurposed the “best of content” from the first 4 campaigns into an interactive microsite using a ‘Back to the Future’ theme. The campaigns were an instant success. There was value delivered in every interaction, and customers gained something from engaging with the content created. Each campaign exceeded goals that included 300% more downloads of the research report, hitting KPI goals within a week of publishing, thousands of video views, and new relationships forged with top marketing industry influencers. 12

The CMO Guide to Influencer Marketing - A blueprint for maximizing impact 5 Source: SAP’s Path to Digital Innovation website13

Picture this:

SAP chose to relaunch its Leonardo platform as a “digital innovation system” at the 2017 Sapphire conference in Orlando. The relaunch needed to attract as much attention as possible, because it marked a strategic shift for a solution that was once considered an IoT platform. At a conference that typically attracts over 20,000 attendees, it was easy for the launch to be lost in all the noise. So SAP created an interactive experience called ‘The Path to Digital Innovation,’ where it showcased SAP’s own CEO, Bill McDermott, and 32 top industry influencers, as they shared insights across transformative technologies including IoT, machine learning, AI, blockchain, analytics, big data, and cloud. Every single participating influencer shared the Leonardo Path to Digital Innovation content, many of them multiple times. Reach was unprecedented, with over 21 million views of the interactive experience.

6 The CMO Guide to Influencer Marketing - A blueprint for maximizing impact Get the influencer selection right

One of the key challenges of influencer marketing is finding the right influencer who aligns with the company’s values and can speak with authority on the subject at hand. The Influencer Marketing Manifesto, published by TapInfluence and Altimeter14 revealed that 68% of marketers find it difficult to source relevant influencers, while 30% have issues when negotiating terms with these content creators.

Figure-2

A hilarious take on the state of influencer selection

Source: marketoonist.com

ROI on influencer marketing is equivalent to, if not better than other marketing channels, say 89% of marketers.15

The CMO Guide to Influencer Marketing - A blueprint for maximizing impact 7 Brands have been burnt by influencers who weren’t the right fit for their andbr and their values. In 2017, one of YouTube’s biggest stars, PewDiePie, who has over 53 million subscribers, was outed for recording a series of anti-Semitic videos. Brands that had signed him on as an influencer, including Disney and Google, were forced to cut their ties with him before they were buried in the ensuing firestorm. Relevance, authenticity and trust are some of the key elements that make an influencer influential (Image 5).

Figure-3

Source: Elements to look for in an influencer16

Influencer marketing offers businesses a high ROI. According to reports, for verye dollar invested in an influencer marketing campaign, companies received an average return of $7.65.17 As a result, the practice has garnered a lot of interest and dollar spends, attracting both genuine and fake influencers. The lack of regulation has resulted in some people gaming the system rather than organically growing an audience. The Social Chain Group has reported that 25% of influencers that they studied used false engagement methods, including buying automated followers, or bots. Up to 40% of the comments on these influencers’ sponsored posts came from fake followers.18 At the same time, social channels — Facebook Twitter, Instagram, and others — are battling the phenomenon of fake profiles, run either by bots or by the same person with multiple accounts. With so much of confusion plaguing the practice, how can businesses ensure that they actually benefit from an engagement with an influencer rather than get pulled into murky waters?

8 The CMO Guide to Influencer Marketing - A blueprint for maximizing impact Here’s a list of things that companies should look for when selecting influencers:

• Check old posts and interactions on the influencer’s profile. See if there are any red flags that are raised-racist comments or posts that appear edgy, and a lot of bickering amongst followers. This could be an indication that the influencer thrives on controversy or might have followers that do. It might also be an indication of the influencer not being the best fit for a brand that wants to portray itself in a connected, harmonious way.

• Be wary of influencers with a high follower count and a lack of engagement, or those that have a lot of comments that are unrelated to the actual post, or a sudden increase in follower count. These indicate that the influencer may have purchased followers.

• Think long term. While most influencer programs focus on a few posts in a specific time frame, it will be beneficial for the brand to look at engaging with the influencer over a longer term. This lends an air of authenticity and reliability to each post, placing the relationship over a quick buck.

• Look at both quality and quantity. Businesses are often intrigued by their ability to reach a lot of subscribers through influencer marketing. However, numbers aren’t the main draw here. It will benefit a business more if they reach out to 2 million subscribers that are definitely their target audience than reach out to 53 million subscribers that want to have nothing to do with the brand and the product it sells.

• Choose the channel and then the influencer. Each channel requires a unique engagement strategy. An influencer who is doing well on one channel need not necessarily be able to make the transition to another channel. Businesses should focus on the channel that matters to their target audiences and then select influencers who have mastered the art of storytelling on that channel.

• Use micro-influencers. Increasingly, businesses are turning to micro- influencers to shoulder their campaigns. Not only do micro-influencers make economic sense, but they also come across as being more relatable, and therefore, believable. Most customers don’t identify with celebrities, but they do identify with a teacher or a mechanic who is just like them. According to industry reports, 61% of customers say they are more likely to research a product or service that is recommended by a friend, family member, colleague or someone like them, compared to 36% who would do so if it were mentioned by a celebrity. Everyday people relate to everyday people.

The CMO Guide to Influencer Marketing - A blueprint for maximizing impact 9 Another option that is relevant to B2B marketers and one that is frequently overlooked is to find the right influencer from within the walls of the office. According to a report from Sprout Social, 71% of social marketers use employees as influencers or advocates today or want to in the future.19 A Nielsen study showed that 84% of people trust recommendations from friends, family, and colleagues over other forms of marketing. Consider the following statistics:

• Content shared by employees receives 8x more engagement than content shared by brand channels20

• Brand messages reached 561% further when shared by employees vs. the same messages shared via official brand social channels21

• 98% of employees use at least one social media site for personal use, of which 50% are already posting about their company22

• 21% of consumers report “liking” employee posts–a far higher engagement rate than the average social ad23

Picture this:

Philips Lighting wanted to humanize their brand and tell their story through the voices that matter - their staff. They encouraged their employees to become social advocates, and as a result, quadrupled their employee social sharing. This resulted in 2x increase in company page views and 26% increase in company page followers, a wider reach of over 10 million people, and a large%age of all new hires coming through the employee platform content.24

Instagram posts (78%) and Instagram stories (73%) are the most effective influencer marketing formats.25

10 The CMO Guide to Influencer Marketing - A blueprint for maximizing impact Picture this:

L’Oréal does something similar with their employees as well. With more than 89,000 employees worldwide, the company knows that its employees are also its biggest influencers. The company encourages employees to share content and stories and their recommendations under the hashtag #LifeAtLoreal. They also set up informal workspaces where employees can test new products before it gets to the market, and offer staff the ability to buy products at a steep discount.26

Co-create content

57% of marketers believe that content created by influencers works better than professionally produced content. 27 Co-creating content with an influencer is a great way of running authentic influencer marketing campaigns. However, creative freedom is a key factor in motivating influencers to get involved in such campaigns. Most influencers report that lack of creative freedom is their biggest challenge when it comes to dealing with brands. Allow creative freedom but insist on boundaries. For instance, racist videos and abusive language are non-negotiable. It is also good to run such campaigns with influencers who already have a working relationship with the brand, as they would understand the requirements of the brand well.

Picture this:

In 2016, Motorola launched a new range of smartphones, the Moto Z and Moto Mods, which were targeted at a young demographic who were known to spend much of their time on YouTube. The company developed a YouTube influencer program to drive awareness, where they worked with 13 influencers with a wide range of target audiences. Each influencer created a “partnership announcement” post, a YouTube video that promoted the product by showcasing a unique use case for it, and two or more extra social posts. The influencers produced a wide range of content that appealed to their demographic, including a video where they sent the phone into the sky using a 10’ rocket attached to the phone, and another one that showed how one could survive a haunted high school by using the phone. There was quite a buzz. As a result, the posts generated 11.6 million views and 38.1 million social impressions. This led to 122,000 clicks on motomods.com, 80,000 of them being first-time visitors.

The CMO Guide to Influencer Marketing - A blueprint for maximizing impact 11 Measure success

Choose the right metrics: Given the extent of the controversy surrounding paid followers and likes, most marketers are steering clear of measuring the ROI of their influencer campaigns using these parameters. With greater emphasis being laid on validating the effectiveness of influencer marketing, marketers are looking at other measurement parameters such as engagement in the form of comments and shares (Image 6).

Figure-4

BI Intelligence

90% Engagement 81%

Traffic/Clicks 59% 62%

50% Reach 61%

54% Conversions 53%

Product Sales 46% 34%

Audience Sentiment 29% 24%

2% Other 3%

Source: Business Insider28

Set clear goals early on: Ideally, ROI parameters need to be clearly defined at the start of the campaign. As a marketer, you need to ensure that the influencer knows what parameters are being used to measure success, and what data points need to be monitored throughout the campaign. Each influencer also needs to know their set of goals. Here are some common goals and the KPIs used to monitor succe ss.

In 2017, global spend on influencer marketing stood at $570 million. In 2018, sponsored Instagram posts alone accounted for $1.6 billion.29

12 The CMO Guide to Influencer Marketing - A blueprint for maximizing impact End goals Typical KPI’s

Impressions or increase in followers on Raise awareness brand account

Customer action such as a newsletter or Engagement demo sign up, app install, form fill-in, comment or share.

Increase in sales Online/offline conversions, use of promo codes

Customer satisfaction Net Promoter Score

Use attribution links: Another way to verify the effectiveness of an influencer campaign is to use campaign hashtags, attribution links, or affiliate codesthat can directly provide precise data on which influencer ‘influenced’ the purchase.

Measure long-term impact: Most often, marketers measure ROI only for the duration of the campaign and no further. However, content on the internet lasts forever. Therefore it makes sense for marketers to have a long-term plan to measure success.

“As the amounts of money being spent grow, media agencies will need to treat influencer marketing more strategically, and not just as an extension of a short-term, tactical PR campaign.”

- Ashley Friedlein 30

Among teenagers, 70% trust influencers over traditional celebrities.31

The CMO Guide to Influencer Marketing - A blueprint for maximizing impact 13 The role of technology

Technology solutions are driving efficiencies and growth strategies across every industry, and that includes influencer marketing. Technology in the influencer marketing space ranges from platforms that streamline processes to those that monitor engagement and measure against success criteria. A technology solution is not the answer to every problem in the industry, but it does help businesses keep a close eye on the things that matter. It also helps maintain transparency and accountability between brand and influencer. Here are some areas where technology has had an impact on practice.

Influencer selection: Traditional influencer campaigns relied on agencies to put a brand and an influencer together. Technology democratized the process by facilitating open marketplaces for influencers to connect with brands. This encouraged even small and medium businesses to incorporate influencer marketing into their relatively smaller marketing budgets. These platforms and solutions utilize analytics that enable businesses to drill down deep into an influencer’s profile and cull out micro-level details about their followers, demographics, engagement statistics, and more. As discussed in the previous section of this paper, finding the right influencer is a daunting task, as much rides on this one step. Influencer selection tools help businesses sort, filter, and segment lists of influencers by a number of parameters. Brands can also search and discover influencers in their field across channels, or within a specific channel.

Campaign management: Once signed on, influencers and brands need to have a common window through which they can view everything related to the campaign. This is an important step in ensuring transparency and trust in the relationship. It helps keep the campaign on track, and all involved on the same page. Campaign management platforms enable businesses to effortlessly manage their campaigns while ensuring that everyone has access to the information they need at the time they need it. These tools also help companies monitor their influencers’ channels to keep track of the chatter around their campaign and the engagement it evokes.

Influencer marketing is considered to be the most cost-effective method of customer acquisition by 22% of marketers.32

14 The CMO Guide to Influencer Marketing - A blueprint for maximizing impact Customer identification:An integral aspect of any successful influencer marketing campaign is a deep understanding of the customer-their aspirations, their hopes, their likely engagement pathways, and what kind of influencers they will identify with. Without that understanding, brands may run multiple influencer campaigns without any of them yielding the results that matter. Traditionally, marketers got their inputs via surveys, interviews, and plain old gut feel. Today, technology, with the help of big data, helps businesses parse through large amounts of information to find detailed behavioral, psychological, demographical, and other specific truths about their customer base. This ensures that businesses build their strategies and assumptions on data, and not opinions. Analytics and big data provide businesses with answers to burning questions, such as, which channels are their customers likely to use, what engagement strategies are they likely to respond to, and more. As a result, businesses are able to be more relevant to their customer base and better align their campaigns to the conversations that matter to their customers.

Engaging content: Every successful influencer marketing campaign has, as a key ingredient in the mix, content that draws customers in and keeps them there. While text, images, video, and audio are extremely popular, technology advancements in the augmented reality and virtual reality space provide brands and influencers with the ability to craft engaging, fully immersive experiences for their customers. Imagine a world where customers can navigate the nuances of the Tesla car with Elon Musk sitting beside them, riding shotgun. With AR and VR, that is now possible. Instead of seeing one-dimensional images or videos, customers can have a multi- dimensional experience instead.

Picture this:

When the classic book series, Goosebumps, was released in theaters, Sony Pictures and Universal McCann created a stunning campaign that leveraged the films’ fresh and unique visual imagery.o T drive awareness and ticket sales, the team decided to connect with the general audience on Instagram that was interested in entertainment and horror. The team decided to create virtual content on Instagram with thehelp of influencers who would be superimposed onto a scene from the movie.e Thteam chose five influencers to work with and invited them to a greencreen s studio where they put on virtual reality glasses and were immersednto ia world of ‘make believe,’ fighting off monsters with Jack Black.he teamT then took the foot age shot w ith the g reen screen and super imposed it ont agefoo f rom the actual movie. These influencers then uploaded these clips their to Instagram, and customers were allowed to experience “first-handat wh it felt like to live in one of those famous books.” The campaign was nstantan i hit with over 4,022,844 organic impressions in the first 24 hours. sentimentThe score of the overall conversation was 95% ‘Positive/ Neutral’,while 18% of all comments were branded and related to people going to thesee film, against the entertainment benchmark of 9% to 13%.33

The CMO Guide to Influencer Marketing - A blueprint for maximizing impact 15 Conclusion

Authenticity is the key factor that contributes to the success of influencer marketing campaigns. People who look up to influencers trust them for honest feedback and reviews on different products and services. At the heart of the success of influencer marketing is this ability to create authentic, friendly conversations between the influencer and the customer. While the industry continues to evolve and mature, marketers who keep their eye on building authentic relationships with their customers, are the ones that will be running truly successful influencer marketing campaigns in the future.

84% of micro-influencers charge under $250 for sponsored posts on Instagram; 97% charge less than $500.34

16 The CMO Guide to Influencer Marketing - A blueprint for maximizing impact References:

1 https://www.adweek.com/brand-marketing/when-procter-gamble-cut-200-million-in-digital-ad- spend-its-marketing-became-10-more-effective/ 2 https://www.businessinsider.com/30-of-all-internet-users-will-ad-block-by-2018-2017- 3/?r=AU&IR=T

3 https://mediakix.com/blog/airbnb-marketing-celebrity-instagram-influencers/#gs.3=A0D5g 4 https://store.businessinsider.com/products/the-influencer-marketing-report 5 http://www.linqia.com/wp-content/uploads/2017/12/Linqia-The-State-of-Influencer-Market- ing-2018.pdf

6 https://store.businessinsider.com/products/the-influencer-marketing-report 7 https://www.marketingcharts.com/industries/business-to-business-106849 8 https://www.marketingcharts.com/charts/b2b-tech-marketers-planned-adoption-trends-2019

9 https://mediakix.com/influencer-marketing-resources/influencer-marketing-industry-statistics-survey-benchmarks/

10 https://digitalmarketinginstitute.com/blog/the-growing-trend-of-b2b-influencer-marketing-10- brands-doing-it-right-corp

11 https://divvyhq.com/resources/content-strategy-planning-measurement-guide/ 12 https://digitalmarketinginstitute.com/blog/the-growing-trend-of-b2b-influencer-marketing-10- brands-doing-it-right-corp

13 https://www.sap.com/dmc/exp/2017_05_path-to-digital-innovation/index.html 14 https://www.tapinfluence.com/tp_resource/future-influencer-marketing/ 15 https://mediakix.com/influencer-marketing-resources/influencer-marketing-industry-statistics-survey-benchmarks/

16 https://tendocom.com/wp-content/uploads/2017/04/Tendo-Communications_Influencer-ebook. pdf

17 https://influencermarketinghub.com/the-rise-of-influencer-marketing/ 18 https://digiday.com/marketing/cheatsheet-need-know-influencer-fraud/ 19 https://sproutsocial.com/insights/data/2018-index/ 20 http://www.socialmediatoday.com/content/employee-advocate-mobilize-your-team-share-your -brand-content

21 http://www.scribd.com/doc/249863818/Infographic-Social-Employee-Advocacy 22 http://www.webershandwick.com/news/article/employee-activists-spark-a-new-social-move- ment-in-the-digital-age 23 https://www.edelman.com/research/2016-trust-barometer-global-results

24 https://econsultancy.com/five-brands-putting-employees-at-the-heart-of-their-influencer-strategy/

25 https://mediakix.com/influencer-marketing-resources/influencer-marketing-industry-statistics-survey-benchmarks/

26 https://econsultancy.com/five-brands-putting-employees-at-the-heart-of-their-influencer-strategy

27 http://www.linqia.com/wp-content/uploads/2017/04/The-Value-of-Influencer-Content-2017_Fi- nal_Report.pdf

28 https://www.businessinsider.com/the-influencer-marketing-report-2018-1?IR=T 29 https://digiday.com/marketing/marketer-cheatsheet-state-influencer-marketing/ 30 https://econsultancy.com/influencer-marketing-measurement-needs-to-become-more-strategic/

31 https://www.thinkwithgoogle.com/consumer-insights/youtube-stars-influence/ 32 https://blog.tomoson.com/influencer-marketing-study/ 33 https://shortyawards.com/8th/goosebumps-influencer-vr-instagram-campaign 34 https://pmyb.co.uk/50-influencer-marketing-stats/

The CMO Guide to Influencer Marketing - A blueprint for maximizing impact 17 About Regalix

Founded in 2005 in the heart of Silicon Valley by a team of passionate entrepreneurs, Regalix has a footprint in six countries, delivering solutions in 18 languages. Regalix, with its roots in data-driven and ROI-focused marketing, works with technology leaders in the areas of sales enablement, revenue operations, and thought leadership. Having worked with the best in the industry—Google, VMware, Dell EMC, SAP, Amazon, among many others—Regalix delivers value at scale and speed, to the leaders in the industry.

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