By Tim Sovay, chief business development and partnerships officer
New research shows that brands leading the way in creator marketing investment are pulling ahead of competitors in nearly every KPI measured.
Social media continues to dominate the digital marketing landscape. But the way brands can (and should) leverage social media platforms to reach audiences is changing.
With numerous channels and more competitors than ever, growing and creating loyal customers remains a central challenge to marketing teams. The algorithms that determine what users see in social feeds have evolved to favor organic, user-generated content over branded content. Digital advertising is growing more expensive but less effective, as users take more control over their data and privacy.
Creator-led marketing has emerged as the leading solution to these challenges, and is rapidly gaining momentum. According to Goldman Sach, the size of the creator economy is expected to double in the next five years, from $250bn today to $480 billion by 2027.
For brands considering their creator marketing efforts, we’re now at a critical juncture. According to a study we just released, conducted with independent research group Aberdeen Strategy & Research, the more advanced that brands are in their influencer marketing efforts, the wider the gap they’ve created between themselves and competitors across every KPI – including revenue.
In other words, the leaders are pulling ahead, while those not yet adopting creator marking strategies are falling further and further behind. With investment in creator marketing solutions only increasing in the years ahead, brands lacking a solid strategy and solution will struggle to keep up. And with an uncertain economic climate on the near horizon, now is not the time to fall behind.
Correlating return on creator spend
Our report, Unleashing The Power of Creators, finds a direct correlation between influencer marketing investment and the return on creator spend it generates. This clearly highlights the benefits that brands can achieve when they invest in the right technologies and tools to support their initiatives.
It finds that influencer marketing leaders — defined as brands in the top 20% in such metrics as impressions, engagement, conversions, and annual revenue — outperformed the lower 80% in year-over-year improvement across KPIs in all stages of the funnel:
- 9.1x greater improvement in impressions
- 8.2x greater improvement in engagement
- 11.7x greater improvement in conversion rates
Perhaps most importantly, these efforts have contributed to a 6.2x greater YoY improvement in annual revenue, leading to an ROI of $4.70 on every dollar invested in influencer marketing programs. In fact, the more brands invest in influencer marketing programs, the greater the ROI.
As a result, those brands in the top 20% say they plan to spend 30% more on influencer marketing programs on average in the future. While brands have increased spending on both digital advertising and creator marketing in the last year, the report shows brands anticipate increasing their investment in creator marketing programs at a rate 13% higher than digital advertising.
We’re not the only ones saying this either: “We’ve known for years about the power of working with creators and influencers in driving all parts of the consumer funnel,” says Doug Jensen (SVP, Estée Lauder). “Our leading-edge measurement approach helped us understand that consumer engagement from creators drives desirability, consideration and conversion – all parts of the funnel – it drives high ROI and is an effective and efficient spend.”
How to maximize return on creator spend
These companies at the tip of the creator-led marketing spear capitalize on their efforts using similar strategies. They all:
- Actively identify potential influencer partnership opportunities that will reach new customers and build brand awareness.
- Use customer trends and behavior data to create more authentic and relevant content to nurture customer experiences and yield more loyal customers.
- Capture and analyze key performance metrics to accurately compare the ROI of different marketing channels and guide future strategies and initiatives.
Doing so can have a notable impact on such results as:
Average customer profit margin
Tactic: Invest in technologies that provide the ability to track creator affiliate link performance, and ID which types of content drive the highest traffic. Use these performance metrics to strategize on the content types that drive the most engagement and justify further investment.
Result: Influencer marketing leaders achieve 4.4x greater improvements in average customer profit margin compared to other brands (51.0% vs. 11.6%).
Tactic: Invest in technologies that analyze key trends among customers to personalize content and experiences that suit the needs and interests of customers. Quickly onboard relevant creators and guide them on key messaging, which builds customer trust and expedites the content creation process.
Result: Influencer marketing leaders achieved 3.0x greater year-over-year improvement in customer satisfaction compared to other brands (25.2% vs. 8.4%).
Customer retention/brand sentiment
Tactic: Customers are the most critical component of a brand’s success, so ensuring their loyalty is essential for continued growth. When customers receive personalized and relevant content from brands, they are more likely to purchase from a brand in the future. Creators promote products in a way that consumers find more authentic and less disruptive to their daily lives.
Result: Influencer marketing leaders see a 4.9x greater year-over-year improvement in customer retention than other brands (48.5% vs. 9.8%), and 4.3x greater year-over-year improvement in positive brand sentiment (30.7% vs. 7.2%).
By investing in their programs, influencer marketing leaders are not only able to nurture partner and customer relationships but also increase their efficiency, setting these brands up for future growth.
When thinking about strategies to maximize the value of your own influencer marketing programs, there are three key pillars to strive for:
1. Expand audience reach and brand awareness by proactively identifying partnership opportunities.
2. Drive customer consideration and brand loyalty by using trends and data to create content that truly resonates with customers.
3. Guide future strategies and initiatives by analyzing performance metrics to accurately compare the returns of different marketing content.
All in all, influencer marketing leaders proactively leverage their technology solutions to identify areas of improvement that yield more impactful relationships with both customers and creators. By investing in influencer marketing, brands can maximize the full potential of their marketing campaigns, expanding and deepening the customer relationships that are critical to sustained growth.
Download the full report Unleashing The Power of Creators free here.