July 22, 2016
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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