What is Influencer Marketing? How brands use influencers to gain profit?
In the ongoing AI race, marketing trends have been shifting from traditional marketing. Now, social media creators are getting equal opportunities from brands, which has set up a level playing field for every creator.
Influencer marketing is a type of marketing that focuses on using key leaders to drive a brand’s message to the target market.
Rather than advertising products directly to consumers, brands hire influencers (social media creators with a niche audience) to promote their products.
Brands pay influencers because they act as a sign of validation and trust that consumers seek. There has been a significant shift in how consumers perceive products.
Brands have realized that traditional brand awareness campaigns are not performing as well as influencer marketing campaigns.
Influencers provide a more authentic and engaging way to reach and connect with potential customers.
Influencers are the best way for any new D2C startup looking for establishing product validation than compared to digital advertisement.
Influencer Marketing vs. Brand Awareness Campaigns
Did you know? One influencer in China sold $1.9 billion worth of products during a livestream.
- Higher Engagement Rates:
- Influencer marketing campaigns typically see engagement rates that are 10 times higher than traditional brand awareness campaigns .
- A study by Influencer Marketing Hub found that businesses earn an average of $5.20 for every $1 spent on influencer marketing .
- Trust and Authenticity:
- According to a report by Edelman, 63% of consumers trust influencers’ opinions of products much more than what brands say about themselves .
- 92% of consumers trust an influencer more than an advertisement or traditional celebrity endorsement .
- Targeted Reach:
- Influencer campaigns allow brands to reach niche audiences more effectively. Data from Linqia shows that 39% of marketers find influencer-generated content more authentic, and 56% find it helps to drive more targeted reach .
- Cost-Effectiveness:
- The average cost of reaching 1,000 people (CPM) through influencer marketing can be significantly lower than traditional advertising. Influencer marketing’s CPM is approximately $10, compared to $25 for online ads and $50 for TV ads .
Impact of Influencer Marketing on the Overall Marketing Funnel
- Awareness Level: Brands can now find niche influencers, which helps boost their brand visibility.
- Interest: No spammy product promotion. Brands choose influencers who create relatable content that showcases the product or service. Due to shorter attention spans, they can still capture their audience’s attention.
- Consideration: Due to the brand’s legitimacy, they find influencers for demos and detailed videos, which create trust among the target audience.
- Conversion: Due to high engagement, influencer campaigns directly impact sales figures. Some brands launch affiliate programs, creating a win-win strategy for nano and micro-influencers as well.
- Loyalty: Influencers have their cult followings, and brands have a direct advantage with these pre-built communities. Brands can tap into these communities and build long-lasting relationships with customers.
Main product categories sold by content creators in the United States in 2023
Influencer Marketing Case Study: Li Jiaqi's Record-Breaking Livestream Sales on Singles' Day Eve
Influencer: Li Jiaqi, a top Chinese live streamer known as the “Lipstick Brother”
Platform: Taobao, a leading online marketplace in China
Campaign: Singles’ Day Presales Livestream
Results:
- Sales: US$1.9 billion in products sold during a 12-hour livestream
- Views: Nearly 250 million views, a record for Taobao livestreams
Key Takeaways:
- Livestreaming Powerhouse: Li Jiaqi’s record-breaking sales demonstrate the immense power of influencer marketing within the Chinese livestreaming commerce space.
- Product Variety: The success of the campaign wasn’t limited to cosmetics, with Li selling a wide range of products like Shiseido lotions and Apple AirPods, showcasing his influence across categories.
- Audience Engagement: The massive viewership of 250 million highlights Li’s ability to connect and engage a large audience, driving significant sales during the livestream.
- Resilience in Changing Landscape: Li’s success comes amidst a regulatory crackdown, indicating his ability to adapt and maintain popularity.
Campaign Breakdown:
- Livestream Format: Li’s 12-hour marathon livestream combined elements of entertainment, product demonstrations, and audience interaction, a recipe for success in China’s livestreaming commerce landscape.
- Pre-Singles’ Day Focus: The livestream capitalized on the excitement leading up to China’s massive Singles’ Day shopping festival, likely driving purchase intent among viewers.
This case study exemplifies the effectiveness of influencer marketing in China, particularly through livestreaming platforms.
Li Jiaqi’s record-breaking sales showcase the power of influencer trust, product variety, and audience engagement in driving significant sales.
The campaign’s success highlights the potential of influencer marketing campaign.
With right influencer marketnig analytics tools marketers can optimize and track campaign success.
Conclusion
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Influencers are creating dedicated followings, and brands can leverage these pre-built loyal communities to establish trust and awareness for their products.
Influencer marketing impacts every stage of the marketing funnel, making it a must-include tactics for establish brand awareness and brand loyalty.
FAQ's
How to measure influencer marketing success?
Set clear goals, use tracking links to track influencer performance, observe social media metrics, study conversion data, and tweak your approach based on your findings.
What does influencer marketing do?
Sponsored content allows a brand to identify top influencers, request their commitments, develop engaging concepts, and finally measure the campaign’s success per a detailed report.
Why do you need influencer marketing for your brand
Influencer marketing increases sales, builds up brand awareness, and creates user-generated content. It is also good to get feedback to understand what customers want.
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