How COVID-19 is Expanding Influencer Marketing ROI

Influencer marketing (and how to measure ROI) has long been a head-scratcher for performance and brand marketing teams alike, but now is the time to figure it out—especially if you’re in the ecommerce space—as market conditions have never been better for advertisers.

People are spending more and more time on social media, and the savviness of influencers as marketers is rapidly accelerating. Additionally, the demand for influencers' services has shifted, as many larger brands are dropping affiliate commissions, canceling sponsorships, and slashing marketing budgets.

For many companies, part of the confusion surrounding influencer initiatives is that they’re deeply cross-functional in terms of value, and therefore often undervalued by the siloed team they sit within. This is why it’s crucial to develop a more holistic understanding of influencer initiatives, with KPIs that speak to both brand and performance marketing teams.

While more traditional short-term influencer KPIs like brand awareness and revenue remain important, a more well-rounded view assigns equal value to the long-term benefits of asset creation, search engine results page (SERP) ownership, and value-aligned relationships. These three areas are all seeing tailwinds as a result of COVID-19, meaning influencer initiatives are ripe for investment for businesses looking ahead and who want to diversify their marketing channels.

Before we dig into the long-term benefits, let's take a closer look at the moment at hand.

An Increasingly Friendly Market

Already long on the rise, search interest in influencers is up 2x since the start of COVID-19, as social media screen time has ballooned due to stay-at-home orders.

On the demand side, many legacy retailers are having trouble. Amazon and Walmart have recently either slashed affiliate rates or dropped affiliate marketplaces. Bankruptcies for big-box retailers like Neiman Marcus and J. Crew are starting to roll in. Many VC-backed brands like Airbnb and SmileDirectClub are also drastically cutting marketing budgets, and any brand-driven influencer campaigns are likely among the first initiatives to hit the chopping block. 

The influencer space is no longer nascent. Influencers are developing stronger marketing capabilities, and many are growing more comfortable with contract negotiations, NDAs, and wading through brand guidelines, all of which make the onboarding process for new influencers much smoother. Companies supporting the space are also maturing, with offerings for discovery (like Dovetale and Traackr), paid promotion (such as Lumanu and Facebook Branded Content), and managed services (Collectively and Izea).

Influencer marketing should be on the testing and/or investment roadmap for most ecommerce brands, as these positive shifts in both the demand and supply curves have sweetened the market. If your company is ready to dive in, make sure you are considering the long-term, cross-functional value of these partnerships.

Long-Term Value

Influencer marketing ROI is typically measured using short-term revenue and awareness metrics, but equal value should be placed on long-term benefits such as asset generation, potential SERP crossover, and brand-relationships with value-driven influencers. All three of these areas are becoming increasingly valuable with the shifts in ecommerce driven by COVID-19.

1. Asset generation

Marketers are quickly learning that creative production is difficult, if not impossible, during times of social distancing. Shoots typically require 10+ people on-site, and production companies are halting or slowing their output as they figure out how to manage. On top of that, for the past two years, iterative creative production and testing have been the most important aspects of paid social advertising. Finding a new winning asset can change a business's growth trajectory, and constantly fielding a diverse range of ads is essential to this process.

Influencers can fill this gap now and in the future. They are one-person creative shops, providing a fresh perspective that is uniquely customized for your audience. Successful ad formats are tailor-made for influencers, who are often adept at capturing high-quality product shots, creating selfie-style reviews, and recording unboxing videos. 

Make sure your influencers provide their raw image/video assets so that you can apply your own DR overlays and launch them as ads from your page or as branded content from their page. 

Smaller influencers are a great fit for this. While they don’t have a ton of followers, they may still be able to offer excellent photography skills and intuition on how to market your product. Most are likely willing to engage for just a product trade—pennies on the dollar vs. a traditional creative shop.

2. SERPs

"[Your Brand] reviews" search engine results pages (SERPs) are becoming more than a nice-to-have—they’re essential. Review pages are now an important part of the consumer journey, a trend that has only sped up with the onset of COVID-19. As consumers become more budget-conscious and reliant on ecommerce, comparison shopping sites like Wirecutter have seen an uptick in interest since mid-March. Additionally, negative reviews that don't match your NPS can crowd out the positive ones unless managed, and they can have a material impact on your business.

Brands who have not yet secured high domain authority publications to fill up their SERPs can lean into successful YouTube influencers and blogs looking for affiliate revenue to capture more reviews and add to their SERPs. Finally, many mainstream publications are looking for alternative revenue streams and tend to be more open to partnership opportunities than before.

3. The new brand lens

For larger influencer initiatives, brand teams have typically been given quantitative KPIs of awareness and engagement. Now, many brands are waking up to the fact that match quality and longer, deeper relationships with core influencers can be more impactful on brand perception, as values are becoming as important as aesthetics for both brands’ and influencers' social presence. Finding deep alignment here is crucial and stands to benefit both sides of the relationship.

The power of this can be seen most clearly in mega-influencers who have used their platforms to launch their own successful companies, like Kylie Cosmetics, SKIMS, and Fenty Beauty. But smaller D2C companies are doing the same to solidify who they are and what they stand for both internally and externally (see Rothy's example below), which is especially crucial in crowded markets such as fashion.

A Word on the Short Term: Sales + Awareness

All of that being said, influencer programs still drive meaningful value in the form of revenue and brand awareness, and the market effects of COVID-19 have made opportunities here more cost-effective. 

Activating affiliates is a no-brainer for brands looking to minimize risk in their performance marketing portfolio, since the market is oriented around pay-for-performance deals with an up-front understanding of ROI.

For awareness campaigns, the engagement rate and audience quality should remain a focus over absolute follower count and any estimated figures (e.g. reach, value per like). This can be optimized by targeting micro- and mid-level influencers over larger accounts and focusing on inbound requests for product trade vs. outbound targets.

For direct sales—creative testing, robust tracking, and offers should remain a priority. 

• Approach influencer selection as you would any other channel: start by testing a variety of tactics and creative, and apply learnings as you go. 
• Tracking will allow you to close the optimization feedback loop, which can be done via UTMs, discount codes, and affiliate links. 
• Offers can lead to a huge difference in performance, and make the influencer feel they're giving their audience something of value. Get creative about re-framing existing offers as exclusive (free shipping, free x with purchase, first-time purchase offer).

In conclusion, invest in influencers! COVID-19 has driven people online and legacy advertising budgets lower, creating a market opportunity for influencers as a channel. When measuring influencer marketing ROI, be sure to account for the value driven in asset creation, improved search results, and long-term brand partnerships in addition to awareness and revenue. Influencers are increasingly important players in the media landscape, and learning how your business can use them is a process best started earlier rather than later.

If you'd like to speak with a growth marketing expert at Right Side Up who can help you launch or expand an influencer marketing program and assist with proving out its cross-functional ROI, reach out to hello@rightsideup.co. We'd love to chat.