Influencer marketing – cheap advertisement or a way to get rich?
Snap shot of facebook performance
Contents
  1. How the internet changed the way we shop
  2. How does influencer marketing work?
    • What are social media influencers
    • How does affiliate marketing work
    • Micro- vs. macro influencers
  3. What does influencer marketing look like in the fashion niche?
    • Substitute for an ad
    • Short vs. long-term collaborations and the role of ranking
    • Taking advantage (of the newbies)
    • Low pay, high work loads
  4. Which roles do social media play?
  5. Recognition of blogging as profession is the next big change
    • Movement towards B2B practices
  6. What do these changes mean for the consumers
  7. Conclusion

Disclosure: Sponsored post.

How the internet changed the way we shop

When the internet came up, predictions were that most of the clothing would be bought online. Of course, there were opinions that customers wouldn’t buy clothes when they can’t check the quality or craftsmanship. These voices were soon be proven wrong thanks to online customer friendly return policies and proactive statements of two-way shipping, free return – no questions asked.

However, in the end, the customer pays returns indirectly. The calculation of prices is a complex optimization.  Beside the labor costs and anticipated profit, among other variables, it considers shipping costs, potential damage and average return rate. The “free return” is  distributed equally among all customers, no matter whether they return or don’t return the merchandise.

Along with online fashion and the upcoming of social media in the first decade of the Millennium advertisement changed. A whole new job market developed around the internet and social media with bloggers and trendsetters. As often when there is a new demand in work force and ways of marketing, there exists a lot of trial-and-error.

How does influencer marketing work?

What are social media influencers

People with large followings on social media and high engagement rates, who promote products or services on their accounts or blog are influencers. Their audiences pay attention to their posts and come back again for more. Consequently, businesses are interested to work with influencers.

Social media influencers can promote a business’ offers by

  • sponsored blog post,
  • affiliate links,
  • delivering in-real-life personal reviews in exchange for a sample
  • driving traffic to the business’ blog or store, or
  • generating leads.

Depending on the task at hand some platforms are better than others.

instagram snapshot og High Latitude Style's likes
Snap shot from my instgram account. Black bars serve to recognize my followers’ privacy

How does affiliate marketing work

If influencers advertise and sell from their account, they will get commissions when their followers purchase thru the affiliate links. You don’t pay more when you purchase a product through these links. Like with the return costs, the commission is distributed over all online purchase s of the business. No matter whether you order directly from the online store’s page or via your favorite guru’s affiliate link. You pay the same.

These links just make it easier for you to find something. The influencer only gets a few cents. Typically, anywhere between 5 to 15%. The commission depends on the total sales value that is made due to the influencer’s efforts.

Micro- vs. macro influencers

Brands distinguish between nano-, micro- and macro-influencers. Nano-influencers have less than 2000 followers. Micro-influencers have between 2,000 and 50,000 followers; macro-influencers more than 50K.

Depending on the goal of the campaign and budget, brands prefer one over the other category. A thought leader may be best for services and B2B (business to business) campaigns. A low following means the audience has a high percentage of friends, colleagues, and family. This means there is trust in the eyes of the consumers. Great for food, beauty products, pet items!

What does influencer marketing look like in the fashion niche?

It’s a mixed bag of high professionals and non-professionals on both sides. However, the latter are a minority.

Substitute for an ad

Ads are expensive. Fashion influencers are offered all sorts of (cheap) clothes in exchange for promoting the brands. Often bloggers are asked to pick a sample of their choice from a page of selected items (that the brand wants to promote) rather than their entire collection. This explains why many influencers are barely distinguishable on Instagram, for instance. Over many posts by different (similar looking women), it works like an ad. May be (on the short-term) even cheaper. Fans trust their guru, right?

Short vs. long-term collaborations and the role of ranking

The ranking of online stores in searches depends, among other things, on their domain authority. This means how many sites link to their store. Looking for new collaborations brings more backlinks. As the brands don’t link back to their promoters, tastemakers are more interested in long-term collaborations like ambassadorships. However,

Not everything that shines golden is gold, it could be pyrite. Look twice. #B2B Click To Tweet
photo of gold and pyrite
Photo of a gold nugget (left) and pyrite also known as fool’s gold

Taking advantage (of the newbies)

A fashion brand, for instance, offers an ambassadorship that would mean the trendsetter gets 75% off of all items on their site. In exchange, the brand might (!) share the ambassador’s posts of the brand’s items with the brand’s over one million followers. Alone that exposure would be already worth $$$s in money according to their representative. Sounds great, right?

But wait! To start the ambassadorship, the maven has to choose a graphic T-shirt from the brand’s ambassadors’ page. They ring in at $149! Even with 75% off, it’s still $37.25! Hello! Sure,

You have to invest money to make money! #marketing Click To Tweet

But why would you want your readers to buy a Tee at a price tag, at which you would never buy it? Just because you get it 75% off? Post it once, may be twice? And you only might get the share on social media!

Might means perhaps, it’s not sure, no guarantee! No written contract other than an email! Especially, with nano- and micro-internet fashionistas, readers are friends, and
Friends don't let friends buy overpriced clothes! #girlfriends Click To Tweet

Low pay, high work loads

Some non-US, non-EU brands offer between $5 and $20 for a post that features photos of their fashion. The influencer can take any photos of their site they like.

Did you ever ask a friend’s opinion on a piece you saw online? If so, you tried to save the photo. It didn’t work, right? Frustrated you sent the link to your friend instead of attaching the photo to your message.

There are work-around to download and finally use these photos in a post. But (wo)man, doing is time-consuming! Consequently, the person gets cents per hour, if they are lucky (and actually get paid)!

Which roles do social media play

A huge one! A person has no ownership of their social media accounts. The accounts can be closed like it happened with google+.

Any changes social media platforms make, affect the marketing. Over time, all platforms have reduced how many fans see their gurus’ posts.

In response, the metrics have (and will be further) diversified looking at engagement rates, conversions and website traffic, etc.

Recognition of blogging as profession is the next big change

About 3 or 4 years ago, many brands have begun to recognize blogging as a profession and business, and turned to B2B practices. Read negotiations, fair payment, contracts, bills, etc. Some brands even moved towards educational collaborations. The product is just mentioned, if at all (just seen). The reader gets information on a question, they actually have, for instance, what to pack answered by fashion influencers, and become aware of the product on the side. Win-win for all three parties.

Movement towards B2B practices

Metrics have been built that provide guidelines for what to charge/pay. Marketing firms have been founded that do the negotiations between the two parties. Think of it like a job market where tasks and services are offered, well defined, with written contracts and deadlines for fulfillment and payment.

These businesses also promote their specialists, see for instance, this spotlight of Mona Farzam, who is well known from TV and social media.

What do these change mean for the consumers?

Foremost, clarity. Better information. To be professional, ads, sponsored content, affiliate links are disclosed as such. The trust of the readers is the capital. Honesty is key in reviews and sponsored post.

In the fashion niche, wearing a piece multiple way and in different posts is a Must for the trendsetter. The reader gets outfit ideas for the piece they bought.

Since it’s a new profession, the work force comes from a diversity of educational backgrounds. This means new ideas, new perspectives and points of views.

Maybe more interesting and intelligent advertisement. Would you buy a washing degrent because it takes dirt out of a knotted garment? Would you buy a $149 T-shirt just because it’s all over social media?

Conclusion

There are easier ways to get rich. Cheap is just cheap. In the end, it will fire back. Professionalism stays.

© 2013-2020 Nicole Mölders | All rights reserved

This Post Has One Comment

  1. Mr.Rios

    Thank you for showing the reality of the business behind ‘influencers’ and social media marketing. The only winners are the manufacturers and the social media companies that take full advantage of free labor. Yes, they get paid, but it is such a minuscule amount compared to what the corporations earn.
    Again, your bast scientific intellect sheds light on a subject that not too many of us understood.
    Thank You!

Comments are closed.