How Influencer Marketing Is More Cost-Effective For Your Startup

July 22, 2016

7:00 pm

Marketers are often frustrated by the increasing costs that paid searches now have as an attractive alternative to the keyword guessing game.

According to the Economic Impact Report, a recent survey by consulting group Tomoson revealed that influencer marketing yields an average return of $6.50 in revenue per $1 spent, with 13 percent of brands reporting an impressive return of $20 per $1 spent.

These returns are part of what have made influencer marketing the fastest-growing channel for acquiring customers online – and the most cost-effective. Marketers surveyed by Tomoson ranked influencer marketing alongside email marketing ahead of organic and paid search, display ads, and affiliate marketing.

With the cost-per-acquisition for SEM across all industries reaching $59.18, there’s little wonder why brands are looking for alternatives. In one example of just how expensive the method has become in recent years, search marketing firm Hochman, saw its CPA jump from $10.44 in 2013 to $44.50 in 2015. The firm represents brands in wide-ranging industries, making it representative of the overall market.

Meanwhile, the average CPA for posts by bloggers is just $28.25, according to data compiled by influencer platform Mavrck. The value also extends to engagement, with SEM campaigns averaging between $1 and $2, compared to a cost of just $.37 per engagement for influencer marketing.

Not only do brands receive a much higher return on their investment with influencer marketing, but customers obtained through word-of-mouth have a 37 percent higher retention rate than other strategies (Deloitte). Brands also enjoy the long-term advantages of a cultivating a real, human advocate who can influence potential consumers even outside a paid campaign.

Pureplay eCommerce brands like Zulily and Asos can spend up to three times as much as Omnichannel counterparts, bidding on up to 74,000 short- and long-tail keywords to remain competitive. As L2 notes, this “spray and pray” approach does not always lead to conversion.

Influencer marketing allows brands to cut through the noise online to reach potential customers through a voice they already trust, picking up where paid search falls short by turning awareness into conversion. The early-stage cost-effectiveness is icing on the cake.

As this article by Convince and Convert notes: “Influencer marketing is so cost-effective that marketers can afford to make mistakes, learn, and refine their process.” Because the strategy is not yet saturated, brands have the opportunity to test different influencers and try different types of collaborations. Influencer marketing services that combine the efficiency of a digital platform with the advantage of having a deep, personal knowledge of the influencers within their network, are making the channel sustainably cost-effective.

Although influencer marketing have not yet caught on among all industries, increasingly more marketers are recognizing its value. And as marketers become comfortable enough with the strategy to go beyond mega-influencers to explore the best mix of influencers large and small for their brands, the value of influencer marketing will only continue to rise.

Photo: Flickr / kris krug

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Kim Westwood is the Founder and Managing Director of Shopping Links, a global influencer and content marketplace for Fashion, Beauty and Lifestyle brands. Having managed 850+ collaborations since launching in 2014, Shopping Links actively works with Fortune 500 retailers and brands such as MARKS & SPENCER, Macy's and Folli Follie, with a focus on aligning brands with influencers who share their target audience. Through a personally vetted network of 14,000+ influencers from 103 countries, Kim and her team have worked with 450 bloggers for a single brand. Shopping Links won the Business Services category at the 2016 Governor of Victoria Export Award and has been named to Anthill Magazine's SMART100 Index of most innovative Australian companies.

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