Why (Current) Influencer Marketing Doesn’t Work

Before we dive into the details of influencer marketing strategy, let’s align on what it means.

Simply put, influencer marketing is “the action of promoting and selling products or services through people (influencers) who have the capacity to have an effect on the character of a brand.”

An influencer is someone who “has the capacity to have an effect on the character, development, or behavior of someone or something. An influencer is someone who has established a level of influence with his or her given community.”

Influencer marketing is a relatively new concept that came into prominence with the advent and rise of social media. Social media transferred power and influence from companies to the individual. The main reason: social media lowered the barrier to reach an audience because pre-social media there was a certain level of capital (advertising dollars) that was required to reach a mass audience. As the power shifted from companies to individuals, the concept of influencer marketing (i.e. placing focus on specific individuals (influencers) rather than the target market as a whole and leveraging these influencers to exert influence over potential buyers) came to the forefront.

Social media has not only democratized influence, but also provided quantitative metrics (followers, likes, comments) to measure the effectiveness of an influencer. Social media metrics don’t provide a complete picture — they are only one dimension in measuring a given influencer’s effectiveness. In an extreme case, Vladimir Putin has no Instagram presence and less than 1mm followers on Twitter, yet his influence over millions of people is undeniable as one of the most powerful leaders in the world.

Based on recent events (see here, here, and here for a quick sample), the current approach to influencer marketing isn’t sustainable for three reasons:

1. People don’t want to be sold. Only 1% of millennials say that a compelling advertisement would make them trust a brand more. We (yes, including non-millennials) have been exposed to plenty of advertisements in our day to know that we don’t want to be sold. Enough said.
2. The line between ad vs. authenticity is blurring. The barrier to launch a company is lower than it has ever been. As a result, there’s an exponential number of companies competing for the mindshare of a finite number of consumers. This dynamic forces companies to try and “innovate” to differentiate from the noise and gain consumer mindshare. While innovation should always be encouraged, there is a thin line between innovative ways to engage people vs. misleading them. Companies have totally fused “authentic brand conversations” with pay-to-play, which is misleading and malicious. At the very least, it’s false advertising. Consumers need to be made aware of when they are being advertised to vs. when they are discovering and engaging with a company’s product or service. The FTC has stepped in, and expect them to play an ever-increasing role in ensuring consumer protection.
3. The negative effects of social media on mental health. A recent study published by The Independent ranked Instagram as the worst social media platform across 14 health and wellbeing issues. The CEO of the research firm stated, “Social media has been described as more addictive than cigarettes and alcohol and is now so entrenched in the lives of young people that it is no longer possible to ignore it when talking about young people’s mental health issues. It’s interesting to see Instagram and Snapchat ranking as the worst for mental health and wellbeing — both platforms are very image-focused and it appears they may be driving feelings of inadequacy and anxiety in young people.” The findings of this study went viral across social media (ironic) because this study is the first of its kind to show a correlation between social media and the negative impact on mental health. As other studies prove similar results, the necessity to wean ourselves off our social media dependency will result in companies having to explore alternative channels for their influencer marketing strategies.

The above reasons provide a daunting outlook for companies that rely on influencer marketing to grow their brands. However, there’s a way to do it right by keeping three things top of mind:

1. People crave the 3R’s: Raw, real, relatable. Instead of being sold, people crave relationships. A relationship that exudes the following qualities: raw, real, relatable. The same study found 62% of millennials say that if a brand engages with them on social networks, they are more likely to become a loyal customer. They expect brands to not only be on social networks, but to engage them. As a result, there’s been a shift from brand equity (loyalty, awareness, association, and perceived quality) to brand integrity (community management, social good, purpose, and actual quality). Case in point — a company like Pepsi with tremendous brand equity (#30 on the Forbes’ World’s Most Valuable Brands list) is public enemy #1 given their recent PR disaster. Everything about their ad feating Kendall Jenner violated the core tenets of raw, real, and relatable.
2. Democratization: Everyone is an influencer. In the early days of social media and influencer marketing, influence was largely concentrated within the top percentile of Tier One Influencers (i.e. household celebrities) with millions of followers. Recently, there’s been a power shift from Tier One Influencers to Micro-Influencers (influencers with a small (<10k), yet highly engaged following). The reason for this transfer of power is because Micro-Influencers are relatable. This trend will only gain further momentum as brands like Glossier build a cult following on the ethos that everyone is an influencer.
3. Co-creation: Build long-term relationships. The most critical aspect of a company’s influencer marketing strategy is building long-term relationships and co-creating with its influencers. Companies must establish real relationships with potential influencers before paying them. There must be an extensive vetting process to ensure that values are aligned and that prospective influencers believe in the company’s product and brand, to the point that they would talk about the brand for free because they love it so much. On the flip side, influencers need to conduct similar due diligence when evaluating endorsement opportunities. Both companies and influencers need to value their brand with the highest integrity and avoid making partnership decisions based on financial incentives. Once the necessary foundation (vetting process is complete) has been laid, the alignment and trust between company and influencer allows for authentic co-creation opportunities that are raw, real, and relatable. While the vetting process may seem exhaustive, it provides the foundation from which to build long-term relationships.

Transparency breeds trust.

In summary, it comes down to one thing: transparency breeds trust. As a company (and as an influencer), it’s important to practice transparency to build consumer trust. Trust is earned, not given. And if trust is broken, it’s hard to rebuild.

• Thanks to Nate Brown, Founder of Institute, for reviewing and providing great insight on this post.