INFLUENCER MARKETING CHALLENGES (PROBLEM DEFINITION)
Our team successfully launched more than 300 digital ad campaigns with different channels for 26 brands, during the last year. Of these ad campaigns, the best results were achieved by those supported by Influencer Marketing. However, this could be a misleading statistic as management of sponsored content created by bloggers consumed most of our time and resulted in unforeseen additional costs.
In the current state, the influence advertising market is highly opaque and chaotic with no regulations and an army of agents and scammers. This causes inefficiency in pricing, while agent fees and fraud consume a large portion of the influencer’s revenue and the brands’ marketing budgets.
Having over a thousand closed deals with influencers we suggest that over 30% of budget is lost to careless contractors, dishonest or fraudulent agents and staff maintenance. Influencer management is time-consuming, as specified above. For instance, 52% of marketers who provide in-house management, only work with an average of 10–25 influencers per program. 50% of in-house program managers estimate spending more than 25 hours managing each program. Additionally, 25% spend more than 50 hours managing each program. Working with agencies can take up to 30% of cost, and that’s only a disclosed part. Moreover, agencies limit the pool of Influencers they have contact with because keeping direct contact with multiple influencers is a resource-intensive task.
In communicating with new and experienced bloggers, those with over 100K subscribers, we discovered that they encounter similar problems. Most bloggers, instead of creating new interesting content which demands investment of time and money, concentrate on the monetization of their channel. If a blogger has an active contract with an agency or manager, 20% to 50% of payment is taken as their fee, leaving the blogger with only a small portion of what’s left after spending on content creation and channel promotion. Additionally, influencers run into the same scam schemes (fraudulent agents, agency managers and even advertisers) as advertisers do.
Lack of standards and guidelines for Influencer campaigns introduces more difficulties in creation of advertising activities and makes the market chaotic. In over 80% of cases, the content created by bloggers doesn’t meet the demands of the agreements made, and greatly affects the campaign’s performance.
Despite the quick growth and development of this market, several unresolved problems persist:
- HIGH QUANTITY OF FRAUD
The ability to check the credibility of the contractor conditions online relationships.
2. UNCERTAIN PRICING
Many intermediaries and risks make pricing in the market chaotic and often inadequate, while not providing any guarantees of efficiency.
3. PAYMENT COMPLEXITY
To maintain campaigns both advertisers and influencers need to operate multiple payment methods to simplify transactions and optimize costs.
4. LOW ACCESSIBILITY
A high threshold for small and medium-sized business entry, associated with risks (high unpredictable costs)
5. DIFFICULT TO MAINTAIN RELATIONSHIPS
Lack of standards, average age of influencers and only direct online communication makes communications difficult to maintain for all parties.
6. TIME CONSUMING AND LIMITED CAMPAIGN DIVERSITY
As demonstrated, the process of managing Influencer Marketing programs is time consuming when handled in- house, making it a complex task to work with a large network of Influencers. Yet, Influencers with a smaller quantity of subscribers show higher engagement rates than top influencers.
7. COMPLEXITY IN SELECTION OF INFLUENCERS AND ROI ANALYSIS
In a survey conducted by Tomoson, more than half of the participants reported better quality leads as a result of Influencer Marketing. Therefore, the selection of relevant bloggers is one of the most difficult tasks for marketing managers.
The extensive use of mobile devices has caused digital media consumption to grow annually. This has triggered changes in internet users’ behavior like second-screening, ad-blocking, increased social media consumption, preferable content types etc. Consequently, marketers must adopt and search for alternative channels to reach the consumer effectively. Despite Influencer Marketing channel’s complexity, it is being used by most marketers, with more than half of them planning to increase their budgets in the next year.
SocialMedia.Market is designed to solve these problems and make Influencer Marketing accessible and transparent, creating a new generation of advertising that will be the most profitable for all market participants.
READ MORE HERE: https://socialmedia.market
