Influencers: Are They Worth it for Ecommerce Marketing?
By Ryan Chatterton
May 26, 2020
In our analysis of the Judge.me interviewees, as well as our conversations with other entrepreneurs, we've seen a lot of love and hate for influencer marketing. On the one hand, influencers are seen as the golden ticket to increased sales and as a massive stamp of approval for your potential customers. On the other hand, influencer marketing can feel like a total crapshoot.
With that in mind, can one really know whether or not influencer marketing will work? Well, we did some digging, and it turns out that yes, you can. Here's how:
The Rules of Influencer Marketing
It turns out there are some rules when it comes to effective influencer marketing. They are, in fact, similar to other rules of marketing you've probably heard. While they might sound obvious at first glance, please read on unless you want to waste tens of thousands of dollars with ineffective influencer marketing.
Here’s a short rundown of the rules:
Have a ****ing goal in mind & match the audience's intent.
Bigger isn’t always better.
Trade is greater than paid.
If you're interested in influencer marketing, but concerned as to whether or not it will work for you, these rules will put you on the right track.
Have a ****ing Goal in Mind & Match it to The Audience’s Intent
After eight years in marketing, I still can’t believe these things need to be said, hence the expletive. So many marketers do stuff without thinking about it. Sadly, I’m no different sometimes.
And I get it. It's hard to know precisely what you want out of any given marketing activity because we may not understand how that marketing activity works yet.
So, when it comes to influencer marketing, especially for ecommerce, there are two goals to keep in mind.
Sales
Brand
In most cases, Shopify entrepreneurs engage influencers because they want the former. That's fine, but it is crucial to understand how that decision affects which influencers you work with.
For example, a previous interview subject who wishes to remain anonymous on this topic has worked with many influencers. One particularly good collaboration was with a tech influencer on Instagram and Youtube. Even though the interviewee's product was on giveaway, the partnership resulted in a massive spike in sales during that week.
On the contrary, multiple collaborations with much larger influencers and using much larger giveaway prizes (costing in the thousands of dollars), had barely any effect on sales.
The most likely reason: misaligned goals.
The latter collaborations for this brand were not with tech/gadget influencers, but with inspirational/aspirational influencers. The second group's audiences look up to them as creative leaders, but not as sources of information about exciting things to buy. And even though there was a significant overlap between the brand and the influencers' audiences in these cases, sales remained flat.
That’s because the audiences of these various influencers have different goals for following that influencer than the brand selling the product. In any given influencer marketing transaction, if your goal is sales, and the audience’s goal is inspiration, your efforts will fall short of their mark.
However, if your goal is brand-building, working with inspirational/aspirational influencers is completely fine. Just don’t expect an uptick in sales.
Bigger Isn’t Always Better
When it comes to influencer marketing, it feels obvious that the bigger the audience an influencer has, the more impact any given collaboration will have on your brand or sales. However, in the experience of our Judge.me entrepreneurs, this isn't true. Some of the best collaborations we've seen and heard about have been with small to medium-sized influencers.
It turns out that working with lots of small influencers is a better strategy than with one or a few big ones. Here are some reasons why:
Small influencers don’t think of themselves as influencers
They are still excited about growing their audience, so they care more
Which means that smaller influencers often have higher engagement
Smaller influencers are cheaper
“I’m not an influencer!”
Contrary to how it may seem, smaller influencers often don't realize they are influencers. In their heads, they're just people with an above-average Instagram or Youtube audience. They're just doing what they love and getting some appreciation for it.
That means that they'll be more likely up for all kinds of collaborations. In fact, they'll be flattered that you came to them, instead of the other way around.
They still care
As with almost any famous person, more prominent influencers eventually see themselves as far too important for the rest of us. Sad, but true.
Small influencers don’t feel this way yet. They still feel privileged to create content for their audience and connect like-minded people. For these influencers, there's a mission to be completed, and they've only just begun.
Higher engagement
Because these small influencers still care, they tend to create a better connection with their audiences which results in higher engagement rates. Engagement rate is easy to measure (i.e., # likes on a post divided by follower count).
I've looked at countless big influencer profiles, and the most common thing I notice is that their engagement rate stagnates. I guess that this has something to do with the Instagram algorithm. Instagram probably wants to cap the engagement rates of bigger profiles, which would incentivize them to invest in advertising for more reach.
That means that when you work with big influencers, you're losing money compared to working with smaller influencers.
Think of this example:
Small Influencer Cost = $200
Audience = 20,000
Engagement Rate = 15%
Big Influencer Cost = $2000
Audience = 200,000
Engagement Rate = 5%
