Dorothy Crenshaw April 14, 2016 | 04:16:33

Managing The Risks Of Influencer Marketing

Influencer marketing programs are a godsend for PR agencies and others who look to combine the third-party endorsement of earned media with the credibility of word-of-mouth marketing. But any influencer marketing opportunity comes with risks and caveats, as recent news suggests.

Compliance.  Lord & Taylor recently settled charges brought by the Federal Trade Commission for running afoul of disclosure rules for a social media campaign on Instagram. To debut its Design Lab collection, the store arranged for 50 top Instagrammers to wear a specific dress on the same day. The results were gorgeous, and the dress quickly sold out. It even generated positive coverage in marketing media. Problem was, none of the influential fashionistas disclosed that they were being paid by the store.

Something similar happened with YouTube video gaming network Machinima, which was involved in the promotion of X-Box in 2013. Machinima failed to disclose its payment arrangements for the video reviewers who uploaded as many as 300 positive posts about X-Box and were compensated at a rate of $1 per view…ka-ching! It settled with the FTC and in this case the (presumed) ultimate advertiser, Microsoft, was not found culpable.

Obviously the agency intended to send a message, and the incidents are a warning for any PR or marketing people who don’t take FTC enforcement seriously.

Fit. It goes without saying that the partnership needs to be a fit, both in terms of expertise as well as demographics. We’ve used different types of personal finance experts for a credit union with “traditional” members and a money-saving app geared to the mobile millennial set, naturally. And this is where Lord & Taylor got it right. The personalities it chose may not have been household names, but they were fashion-savvy social media users with quality followings.

Overexposure. Brands crave “safe” endorsements or relationships, with good reason. Yet engaging someone at the peak of their popularity poses other risks, simply because many of the “top” personalities like Bethany Mota or Kylie Jenner are overexposed. Multiple endorsements can confuse an audience, and, worse, one-off engagements like sponsored tweets or event appearances aren’t strong enough to build a solid connection with a brand.
Often a brand needs to choose between individuals with high levels of trust, and those with enormous reach. It’s difficult to get both, which is why we often counsel clients to consider “citizen influencers” who may lack household name status but who boast legitimate social networks with strong ties and time-earned expertise. Onalytica talks about the “power middle” layer of Tier 2 influencers, who are often easier to work with than Tier 1 personalities and can offer a way to scale cost-effectively. (see below)

Scaleability.  Scaling an influencer program is probably the biggest hurdle for marketers. How do you manage multiple recommenders across social platforms as diverse as LinkedIn and SnapChat? And how does a brand afford the fees and measurement costs associated with a broad international campaign? For our clients, the answers seem to lie in 1) access to cutting-edge tools for tracking and measurement; 2) the right mix of paid and unpaid media, with influencer marketing often replacing traditional paid advertising; and 3) a mix of tier-one and lesser-known personalities as outlined above. Forrester’s report on the latest word-of-mouth platforms that harness technology to scale and measure influencer programs is useful for some of the recent tools it cites.

Intellectual Property. A social influencer will often use a product photo, trademarked brand or corporate logo, or product photos in the content they generate. Brands and organizations need to anticipate use cases and ensure that logos and photos aren’t modified or misused – the last thing you want is a gif or meme where a branded product is the butt of a joke. On the flipside, a company may want permission to use influencer-generated content in its marketing. The point is that everything must be memorialized in a legal agreement.

Let’s face it, at some level, nearly every influence program falls short of 100% authenticity, and today’s consumers are savvy. A well orchestrated influencer marketing program can fill the gap between “straight” PR, paid advertising, and word-of-mouth, with some of the advantages of each. But like any PR or marketing program, it’s all in the execution.

4 thoughts on “Managing The Risks Of Influencer Marketing

  1. >…compensated at a rate of $1 per view…
    Holy crap. I’m going to guess their videos probably get at least 100k views each on average, so 100k views times 300 videos… Ka-ching indeed!

  2. Hi, thank you for sharing this blog post! There are a lot of important information from this article and I love it.
    I think that Influencers are picked due to their capacity to interface with an enormous crowd. Yet, sometimes, they buy adherents to show up more ‘compelling’ than they truly are. Sites, for example, Follower Packages or Genuine Likes exist simply to assist growing influencers with seeming great for brands, expanding their odds of turning into a paid influencer. These destinations permit idle records or bots to be added to an individual’s supporter list. Brands that join forces with influencers with counterfeit devotees will squander their energy on content that will not actually be arriving at anybody.

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