Social Media Influencers – The Math Driving Brand Partnerships
Posted by Matt Brown / September 12
Brands around the globe are finally embracing the fact that influencer marketing is here to stay. Malcolm Gladwell really started to popularize the concept back in 2000 when he wrote that certain people “with a particular and rare set of social gifts” can spread ideas and products and messages and behaviors. Marketing agencies have subsequently sought to identify and harness these individuals for their brand campaigns.
From the outset, influencer marketing was an exciting area given the high ROI and high engagement numbers. As you might expect, consumers are far more likely to pay attention to an expert or an aspirational hero on social media (versus say a print advertisement in a magazine, or countless other traditional marketing channels).
But over the past few years, the industry has finally started to study this emerging area and uncover certain insights. A Markerly study from April 2016 revealed that Instagram influencers with fewer followers tend to have higher engagement rates. Specifically, their results showed the following:
- Less than 1,000 followers – Average Like rate of 8%
- 1,000 to 10,000 followers – Average Like rate of 4%
- 10,000 to 100,000 followers – Average Like rate of 2.4%
And this inverse relationship continues as you move up the scale towards superstars with millions of followers – the larger the following, the lower the engagement rate.
So basically, major brands should focus their efforts on microinfluencers with small, targeted audiences… right? Given the value in this type of analysis, Legacy Marketing recently decided to test against the agency’s own internal data. Here’s what they found:
- Less than 1,000 followers – Average Like rate of 16.8%
- 1,000 to 10,000 followers – Average Like rate of 10.4%
- 10,000 to 100,000 followers – Average Like rate of 5.8%
As you can see, though Legacy Marketing’s engagement rates were higher, the data still followed the same general pattern as the Markerly findings – the larger the following, the lower the engagement rates.
However, brands are much more focused on other KPIs versus simple engagement rates. Specifically: where should I invest my marketing dollars in order to get the best bang for the buck?
So next, Legacy Marketing analyzed the same data set (now paired with data on payments / partnership fees) in order to study the ROI performance at each level. Here are those findings:
- Less than 1,000 followers – Average Pay Per Like = $1.14
- 1,000 to 10,000 followers – Average Pay Per Like = $1.03
- 10,000 to 100,000 followers – Average Pay Per Like = $0.15
Interestingly enough, these findings show that there actually is value in partnering with larger influencers given their Average Pay Per Like is more affordable. So what’s the sweet spot?
After digging into the numbers further, Legacy determined that the subgroup of influencers between 30-75K followers consistently enjoyed the highest engagement rates at the lowest prices. This will be welcome news to many social media agencies who would rather spend less time working out partnership agreements with just a few key mid-tier influencers (rather than getting overwhelmed with paperwork and phone calls to partner with hundreds of microinfluencers).
It’s likely that these mid-tier influencers still maintain strong engagement rates with their audiences without carrying the inflated follower counts of many superstar celebrities. Even if a big celebrity isn’t outright paying for fake followers (like Justin Bieber), many have fallen prey to the teenage “LB” or “F4F” phenomenon. You’ve heard about this, right? As it turns out, millions of teenagers are going into the comments threads on social media and offering to “Like Back” or “Follow 4 Follow” in order to get strangers to inflate their personal social metrics (and personal sense of social worth too). This trend is swelling celebrity followings as teenagers use the comment sections as fishing pools to find strangers willing to partner with them. It’s a weird time to be alive. But as it relates to digital marketing, this phenomenon is diluting the quality of macroinfluencers’ audience and engagement.
In any case, many brands and agencies are eagerly awaiting the newly-emerging trend of performance-based influencer partnerships. While not yet widespread, many are looking forward to future contracts that pay out according to real and measurable results.