Here’s Why You’re (Probably) Wasting Money on Influencer Marketing

Opinion: Influencer content is extremely underutilized

Serious money is being thrown around to influencers. but most of it is going to waste Yuri_Arcurs/iStock

Influencer marketing has all of the signs of a classic bubble. Companies spent an estimated $570 million on sponsored Instagram posts alone last year. That’s serious money being thrown around to influencers for brand promotion. Unfortunately, most of that money is going to waste.

Why? It’s simple: Influencer content is extremely underutilized.

We analyzed thousands of branded influencer posts and found that while influencers may have a large number of followers, the typical Facebook post only reaches about 3 percent to 8 percent of that audience, with Instagram being only slightly higher, at 8 percent to 18 percent.

Because so much content is being published on these platforms, the algorithms behind Facebook and Instagram filter out much of the content that isn’t directly relevant to the user—which may include the posts you spent a lot of money on.

The other problem with influencer marketing is that with opportunity comes fraud.

As splashy headlines tout what a lucrative industry influencer marketing is, many people want to become influencers in an attempt to score a brand payout. This includes a whole cottage industry built around fake influencer accounts and buying bot followers to make those profiles look more impressive.

The wrong influencer results in wasted money and energy

Choosing the wrong influencer (or the wrong platform) only puts you in front of the wrong audience (or is a wasted opportunity to connect to a good audience). For example, while Instagram is great for impulse buys (think fashion and beauty products), technology products are best explained in a blog or YouTube review.

Some brands think bigger is better when it comes to influencers, opting to work with only big-name celebrities regardless of whether their audiences are relevant to the brand. Others focus only on the numbers, choosing influencers with a large reach but low engagement.

This way of thinking can go horribly wrong—just look at Pepsi’s infamous commercial with Kendall Jenner. While Jenner is a world-famous celebrity with millions of fans, she had no involvement whatsoever in the creative process—and the audience immediately noticed the ad’s inauthenticity.

This tends to happen when brands only focus on short-term results. If you expect all of your marketing problems to be solved after a one-off campaign, you’re setting yourself up to be disappointed.

Many first-time campaigns show initial promise—with great reach and engagement and comments like, “I love that! I need one!”—but then underwhelm when it comes to conversions. To start seeing real results, you’ll need multiple touchpoints and three to six months to pay dividends.

Finding the right influencer for your niche

While every industry and product can benefit from influencer marketing, the question is whether there are influencers in your industry that you can actually work with. It’s harder for business-to-business companies to find influencers simply because there just aren’t as many people out there who are passionate enthusiasts for B2B products (at least who aren’t working for a competitor).

It can also be difficult to evaluate an influencer’s following to find your target market. While it’s easy to find general demographic information, it’s more challenging to determine what percentage of an influencer’s following is made up of, say, chief technology officers or marketing managers.

The positive side is that influencer marketing isn’t just for Facebook and Instagram. LinkedIn is a growing platform for influencers—especially for B2B brands. There is generally a small number of big hitters by industry, so they should be easy to identify and work with.

Ensure that your influencer marketing efforts actually reach the right audience

Finding the right set of influencers is only the beginning. The next step is to ensure that the content you are investing in actually reaches your audience. Most important, you want to drive conversions and deliver a strong return on investment. To get there, there are a few key points to keep in mind:

  • Include your performance marketer: The social media and performance marketing teams are often at odds on metrics and what success means, making it difficult to set goals and determine what’s working and what’s not. Influencer marketing is a great way to show success to both stakeholders. Create goals around engagement and reach, along with inbound leads, conversions and downstream audiences for retargeting. When both social media and performance marketing are included in the conversation, it’s easier to reach all your goals.
  • Invest in your influencer content: Don’t rely on organic reach alone to reach your audience. Instead, use multiple touchpoints to drive traffic from several sources. For example, if your influencer is creating a blog post, don’t just publish the post and then let the powers that be take it from there. Create a Facebook post to drive traffic to the blog and, for an even stronger impact, promote that post to get in front of more target customers.
  • Establish longer-term influencer relationships: From an ROI perspective, this will provide multiple touchpoints to your audience and create a message that’s more authentic and sincere. Longer-term engagements turn the social “I love that and want to buy” comments into actual conversions.

Investment in the influencer space is only going to increase in the future, as brands become smarter and more sophisticated and start demanding results. As a result, underperforming influencers will fall out of consideration, along with platforms that only focus on social vanity metrics.

Influencer marketing is going to morph into traditional ad channels with full transparency into funnel metrics, becoming a robust channel for advertising dollars and a truly complementary piece in the marketing mix.

Paul Johnson is head of operations and co-founder of Lumanu, a marketing platform that helps brands connect with customers through authentic content.