Secrets behind a post from Social Media Influencers…

Have you heard of a dish called “Melted Cheese”?

It is originated from Switzerland, basically it is just cheese pouring down to an ordinary dish. (As a guy from Asia, I apologize that I don’t have deep understanding of cheese culture haha)

I wouldn’t say it is so special, but very cheesy indeed. People go there just to find out what that is and fulfill their curiosity.

There is a store called Raclette in New York City that sells dishes like this. The dish had been on their menu for several years. The feedback from customer was just so so. 

Yet at the April 14, 2016, An account called INSIDER released a short video on Facebook. The popularity of this “Melted Cheese” sky roared like a rocket…

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(Note that it has 721K shares, 93M views.)

The store was fully booked the day after the video was released.

The owner said that they used to have four employees, but due to the circumstance, they had to hire more. The restaurant managed to boost their sales from this single dish. I don’t have the exact numbers, but that must be good…

This is the value of social media influencer. Now the follower has reached more than 9 million.

If you are the business owner,  would you pay for a social media influencer for marketing purpose?

Today I will unveil the secrets of the business model of the social media influencers in the U.S – How much can an influencer earn with a post?

The influencers in the US are mainly active in the six social media platform. According to the price each platform offers, the ranking is as follows:

Youtube, Facebook, Instagram, Snapchat, Vine and Twitter.

So how much is it for a post?

Captiv8 released a chart showing offers in different tiers. The company is an influencer marketing analytics platform and marketplace that uses artificial intelligence to connect brands with relevant influencers.

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We can see that it is most expensive for one to find an influencer to post a video ad on Youtube. If he/she has more than 7 million follower, it is going to cost $300K. 

However, making a Youtube video is HARD! Not so many influencers can do it. Well, there are other choices available!

If you have 7 million followers on Instagram, then a post with a photograph and a paragraph of words can work as well. That is worth about $150K .

For example, in 2015,Kim Kardashian who has 109 Million followers is a top icon worldwide. 

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Rumors says that this post is worth millions of dollars. As you can see there are 464K likes in this post.

|“OMG. Have you heard about this? As guys know my #morningsickness has been pretty bad. I tried changing things about my lifestyle…”|

I would say it is just pure commercial ads in a written format… 

Yet later the U.S. FDA issued a warning letter to pharmaceutical company after Kim Kardashian posted that promotional selfie with one of its drugs. So she had to take it down…

Why finding social influencer for ads?

OK, how do you feel after reading offers from the chart? Is it too expensive to find influencers? Do they just have too much cash to burn? Why are they spending that amount of money for?

It seems like you are just a newbie. Let me tell you why it is worthwhile to find an influencer for marketing. The reason is that promotion like this are more effective and more long-lasting. 

Comparing to traditional marketing, influencer marketing has its distinguish advantages. They make every effort and more likely release a post that fits the interests of their followers. In addition, it is more long-lasting because rather than traditional ads being taken down once you stop paying, a post or a video could be there forever unless things like Kardashian’s case take place. 

For example, “Sushi donut” gained its unusual popularity primarily from Facebook. I remember first seeing it last summer, and now I can still see it occasionally in my Facebook page. Rumors says that it still takes about hours to wait in line. While thinking about its craziness, we can also see that the marketing expense spending on an influencer’s post really worth its value.

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So how to pick influeners?

It seems like you are interested and you are eager to spend money on influential marketing. Yet there are too many KOLs, do you know who you should find?

Let’s say you have a budget in hand, you can either pick 

Plan A- a KOL with 8 million followers

Plan B -10 KOLs with 800K followers

If both options have the same price, the numbers of followers in total in both case are same as well, how do you make the right choice?

I will first digress a little bit and introduce the hierarchy of Social Media Influencer by the numbers. 

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Every tier has a different nickname.

Tier-1: Icon~7.4M followers

Tier-2: Trailblazer ~2.8M followers

Tier-3: Influencer ~853K followers

Tier-4: Micro-Influencer ~221K followers

Tier-5: Super micro influencer ~50K followers

In order to evaluate the performance of a post, there is an important term called CPM, which stands for “cost per thousand impressions,” meaning that how much you need to pay for 1000 people to see this post. In a way, CPM measures cost effectiveness of a post.

Let’s sharpen our pencil and do some math here.

Suppose you give me 100 bucks, and I make a post, resulting in 1000 views. Then the CPM =$100/1=$100

Suppose you give John 100 bucks and his post gets 5000 views. Then the CPM = $100/5 = $20, meaning that you can just use $20 for 1000 views.

You want the CPM as low as possible, your money worth the most with lowest CPM.

Let’s take a look here in this chart which shows CPM for influencers in each tier.

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We can see that 3rd tier is the lowest, meaning that it is most cost-effective. But why?

We have to be clear that in the aspect of value-adding, the more follower the better is not the case here. When you have too many followers, the interests of followers are very diversified. Consequently, it is more difficult to make a post that favors everyone, resulting in limiting the views and the number of shares/repost.

Yet an influencer with too few followers also has disadvantages. Although followers may have similar taste or interests, low number of followers also limits the number of views and shares. So influencers in tier 3 have a good balance of the quality and the quantity of the followers so that its CPM is the lowest.

So you want an influencer to make a post for your business but have no idea how to start? Don’t worry, you don’t have to start from scratch. This market is so mature that you can easily find an agency and they will do all the job.

 

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This just makes life so much easier :)

 

Source:

https://www.popsugar.com/food/Raclette-Restaurant-New-York-City-43336800

https://www.recode.net/2017/9/14/16290536/social-media-how-much-celebrities-make-ads-advertising-instagram-influencer

http://www.dailymail.co.uk/health/article-4409682/Kim-Kardashian-promotes-dangerous-pregnancy-pill-AGAIN.html

https://influencermarketinghub.com/instagram-influencer-marketing-agencies/

8 comments

  1. roarkword · ·

    It seems to me like while the use of social media influencers can be useful in the short term, in the long run a more robust strategy is required to sustain consistent growth levels. Marketing requires a robust mixture across multiple channels whether it be traditional media outlets like TV, radio, or online. Without a consistent mixture which is dependent on the industry, the successful impressions will go squandered as the spike in business fades and the fad appeal dissipates. This is the main reason why social media influencers oftentimes champion products that haven’t been seen before; fads are easier to start with fresh products, and this is why social influenced campaigns can be quite gimmicky and not sustainable. These should be seen for what they are, a costly and strategically implementable marketing effort.

  2. NeroC1337 · ·

    Now here comes my question: how much regulation does marketing through KOL have? Does it follow the same rule with traditional marketing, such as you cannot make false statement, you cannot negatively portray, or defame competitors products etc. Because from my personal experience that often time KOLs will not fully disclose their sponsorship, or partnership with a certain brand, the line between whether this is a piece of advertisement or just a piece of tweet, a post.

    Years ago, a famous Twitch Streamer named PhantomLord, who was a CSGO streamer, was using a CSGO skins( in-game items) betting site in a way that his stream promote a lot of traffic to the site. However, later people found out that PhatomLord was actually the owner of the site, and he was purposefully manipulating his experience on that site so that the betting experience seems exciting to attract a lot of traffic. He was jailed, fined, for falsely promoting his own site in the end. I would believe that regulation would in the end hugely effect the strategy to market through KOL. Right now, I agree that it could be an efficient way to market your product if done correctly.

  3. Jobabes121 · ·

    This is interesting, and wow it costs a LOT more than I expected to post something via social media influencer. I think this marketing strategy is useful, but case by case. For instance, a business with a unique product (e.g. the cheese dish you mentioned in the post) would receive a significant spotlight with this type of shoutout, because just one post should be enough to capture the audience’s eyes. However, if the business is a rather ordinary business without much differentiation in the first place, this marketing tactic would not be good as it will be overlooked by people as one of many posts that the social media influencers post. It just shows that only those with the capability of using the “viralness” very effectively must use this marketing tactic, as otherwise they will just lose hundreds of thousands of dollars for a meaningless post.

    But I do agree that social media is a lot more effective marketing platform than TVs nowadays. Using this fact, this marketing should be considered more seriously for many retail/food industries, as this seems to be a lot more effective than putting posters and flyers throughout the city. People are busy looking at their phones and newsfeed, not what’s going on outside of the world. So I do buy your point! Just for the right merchants with enough unique feature to flaunt. Good post Joe!

  4. HenryChenChen · ·

    great post! The amount of compensation those influencers earned is very impressive, and I agree with your point that they make every effort and more likely release a post that fits the interests of their followers. This makes the social media marketing campaign more valuable than TV. Another advantage I can think of is that social media has the share function, where people can spread the post very easily. But on TV, it is difficult to share with your friends. Your analysis about how to pick the influencer is fascinating to me. I think one limitation in this industry is that sometimes the influencer might be picky about the post, in other words, they might also concern: how to pick a post? If the influencer posting too much advertisement or irrelevant post, they might lose their followers and damage their brand.

  5. Good post! I agree with the comments already posted, but also presently there is more transparency for ad posts. The reality show stars from The Bachelor are known for posting ads on their Instagram pages. At first they would just tag the company within the picture, but now rarely will you see an ad post without the #ad or #partnership. That being said, viewers or followers can completely understand that the celebirty or influencer might not actually use or like the product rather they are getting money to feature the product.
    I love new accounts like Insider (they post features of restauants or cool products). This might be the future for social media advertising, since these accounts exposes how the product or restaurant is worth trying. This filters out “fake” posts and makes them feel more genuine rather than a product being pushed onto the consumer.

  6. Keenan Neff · ·

    I’ve started to notice over the past few months how a lot of the “famous” people that I follow are now posting instagram pictures that have to do with an ad. I think that this is a great move by companies using these social media influencers because just like their title states, they are influencers. It is pretty absurd how much money influencers can make by just one post. I agree with what @henrychenchen said about the ability for these posts to spread. That is why I also believe that these social media influencer ads are a lot more beneficial for the companies promoting than if the ads were on TV. Things on social media have the ability to go viral very quickly, as we have mentioned in class. I think that most of the social media influencers have a generic enough audience demographic, that companies can target specific influencers who they believe have a following base that will potentially buy their product. This also gives the influencers the power to only accept ad deals that they believe won’t tarnish their relationship with their followers.

  7. jennypenafiel11 · ·

    I enjoyed that you structured your blog post as a step by step guide through the how-tos of marketing with influencers. It was good to learn about the costs and categories of these influencers. I think @neroc1337 brought up a great point about regulation because KOLs don’t always disclose the fact that a post is an ad and how this can lead to issues similar to that gamer who deceived his audience by advertising his own site. For that reason, I do agree that some sort of boundaries need to be developed when it comes to advertising via social media channels. With that in mind, I also do agree with @kkim312 in that I have also been seeing a lot of posts that include a #ad or #partnership. At first, these hashtags were just included in the captions but for example on Instagram the other I saw a post that included at the top, under the user’s name, title “ad” in order to differentiate it from a normal post by that user. I have only seen this once so far but it may be a new thing. It was similar to the way that ads from accounts that you don’t follow appear in your feed. I think this is all happening right before our eyes so its so interesting to watch it develop. However, for that reason, it is good to be informed about how much these influencers can get paid and what kinds of categories exist in order to be more informed and be able to sort through the ocean of ads that we are surrounded by.

  8. graceglambrecht · ·

    This reminds me of when Scott Disick posted an instagram ad but didn’t copy and paste the pre-written ad message into the description box properly! A pretty bad look for the company he want promoting. Kim Kardashian also started the importance/requirement for paid posts to be #ad or #partnership as @kkim312 mentioned. Influencers make followers more inclined to use those products because it allows them to gain some type of connection to that influencer by using or having the asme things. Transparency becomes an issue when you dont know if its an ad or not, which is why in a lot of make up videos on youtube now the vloggers will specifically state that they are not being paid to promote or review a product.

    Also think that the perks and payment fluctuate rapidly based on popularity of the figure and the position of the company. Every influencer is different, and lots of them have agents as well who interact with this marketing agencies that rep companies! Hard to find a standard in this who new system of “influencers”

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