From makeup to movies this year has shown us one thing for sure. Big brands are waging big bets to take on their underdog competitors in the battle for consumer attention. Last week, in fact, Nike shelled out a whopping $500 million to lock down LeBron James for a lifetime.
I can’t fault LeBron for jumping at the opportunity to tie-the-knot with Nike. (I’d be like, SWOOSH!) But, while the media can’t get over the size of LeBron's paycheck, I’m stuck on a slightly different soapbox: How DA FUX did Nike’s Marketing get that one approved?
If you are in the marketing industry you may have recently noticed that everyone around you is foaming at the mouth to tell you his or her predicted trends for marketing in 2016. Most notable watch-listers have included influencer marketing among the top of their predictions, which has many marketing execs and SMB brands alike stressing over the idea of expensive influencer campaigns like Nike's.
As with most great trends in history (and far too many of the bad) the rise in influencer marketing trails a flock of unicorn hopefuls behind it, seeding an entire industry of tech platforms to serve marketers increasing influencer needs. But, if you’re like me, then (in the words of Rhianna) you’re calling the bluff before re-strategizing your company’s marketing budget to ball bigger than LeBron. So, here’s what you need to know to strategize an influencer campaign that is well worth your time and your budget.
WHAT IS INFLUENCER MARKETING?
An ‘influencer’ is an individual or media brand that maintains a significant amount of credibility within a specific segment of the market. Influencers can, and do, exist across pretty much EVERY hobby, industry, and channel. From video gaming to cheating the points system on your AmEx, there’s an influencer for that. Rolling deep like a crew of coupon queens on Black Friday, top influencers carry with them the weight of millions of followers. Like PewDiePie for example, who topped Forbes inaugural list of highest earning YouTube Stars this year with 40 million subscribers and correspondent earnings that broke well over $10 million before taxes. Influencer Marketing is a tactic that leverages the intimate relationship between an influential individual and his or her audience to achieve a mutually beneficial business goal.
WHY DOES INFLUENCER MARKETING WORK?
I love marketers. They’re my people. But, I’ll be honest with you. When we get around too many of our friends and the Kool-Aid starts flowing, sometimes marketers get a little drunk on our own success. No one here is a magician, and you can’t assume to know the reaction a free willed human being is going to have to something like Batdad videos, for example.
That’s why we have to be strategic in aligning our brands with the right influencers to reach target consumers. And, even more so, we have to MEASURE. Growth is built like a science experiment. It's all about testing your hypothesis, tweaking the formula, and measuring your results until you get the perfect concoction.
According to Nielsen, 84% of consumers trust peer recommendations above any other source. The purpose of partnering with influencers is to seed word-of-mouth marketing. When I say word-of-mouth marketing think unicorn like growth among members of a specific community, for example the rise of Tinder among millennials. If you’re looking to generate this kind of targeted hype, then you’re in luck because the data is on your side. Reputable sources like McKinsey, Deloitte, and Nielsen have published reports for years evidencing the overwhelming influence of word-of-mouth recommendations.
“The most credible advertising comes straight from the people we know and trust. For that reason, it should come as no surprise that more than eight-in-10 global respondents (83%) say they completely or somewhat trust the recommendations of friends and family. But trust isn’t confined only to those in our inner circle, as two-thirds (66%) say they trust consumer opinions posted online—the third-most-trusted form of advertising.” Nielsen, 2015 report
Gaining popularity with a new audience is no different than, let's say, your attempt to get that cute new girl in the mailroom to go out with you. If you’re thinking to yourself, “what does she know that I don’t know? I’m still in strikeout city”, then you are about to get a two-for-one pro tip here. YOU NEED TO BE VOUCHED FOR; and, by someone who holds some major clout in copygirl’s book. It is all about building a relationship, and your consumers are not in the market of waging their valuable time and money on anything they feel is risky business.
Aside from building a relationship with your consumers, influencer strategies are aimed at creating deep engagement. Which is again, all about growing trust and credibility. I know you hate to say it, but mom and dad were right. Trust is something that has to be EARNED. And, the fact that “92 percent of consumers trust recommendations from other people—even if they don’t know them personally—over promotional content that comes directly from brands” (Nielsen), means no one is exempt from this standard.
HOW TO HARNESS INFLUENCE FOR YOUR BRAND
Goldmine influencer campaigns, like Birchbox and Gossip Girl, aren’t only about putting in the research to find the RIGHT influencer to endorse your brand, event, or product. Marketers have to assess the channel and make the ask before designing a campaign around an influencer’s platform. Note how I phrased it as their platform? As with all marketing strategy, influencer campaigns are no different and should start with the end goal in mind. Your expectations for a campaign must start with a deep dive into the research and data. An immense understanding of the platform, the culture, and the audience you are about to engage is essential for designing a successful influencer campaign.
Here’s why the LeBron deal made sense for Nike.
I’m told it costs Nike about $62.50 to make a pair of LeBron Nikes. According to a 2015 article in Forbes, in 2014 Nike sold $340 million in LeBron signature shoes. A 13% increase from the year prior. If the figure of Nike shoes sold is 65 – 120 million per year, then LeBron’s lifetime deal will have paid for itself in just nearly three years.
When thinking about which influencer is right for your brand it's ok to air on the side of caution. Remember that influencer marketing is not about going with what’s trendy. Rather, think about if the influencer’s audience and platform make sense for your brand within the framework of your company’s strategic growth objectives. GET CREATIVE! Some of my greatest brand partnerships have come from the most unique ideas. Nike can afford to take larger risks than most. However, I guarantee that Nike’s executives did more than just crunch the numbers before making the decision to extend their wealthy offer to LeBron. Nike is banking that LeBron never goes out of style. With the basketball star's recently announced entertainment endeavors, it appears that this too is something LeBron already has a vested interest in ensuring.. Here's hoping they're right!