What is the Real Value on an Online Influencer?
Hiring an online influencer is a difficult job for any marketer or business owner. Trying to determine the value of social media marketing can be an arduous and expensive process. A lack of transparency on how algorithms work makes an influencer’s value speculative at best. My experience with influencers has taught me one thing above all else: Trust, but verify! There are some commonsense ways to evaluate your potential online influencer or podcaster.
Many marketers simply do not fully understand social media and how it works. What’s even more shocking is that many so-called influencers do not understand how it works either. All too often, influencers make big promises, overstate their reach and inflate the value of their profiles. In a lot of cases, so-called influencers are outright falsifying their reach by buying fake follower accounts. With a high-level of fraud existing in the social media realm, it makes it more difficult to find the real thing.
“Common sense goes a long way. If an influencer has a very large following but no sponsors or has hyper-local sponsors like the corner taco shop, that’s a signal to either pass or investigate further. Also, if they are advertising dubious products like get-rich-quick crypto-currency products, gambling sites or RV Dealers, you might want to think twice”
-John Keller, ForexTV
However, the value of such collaborations can be immense if you connect with a genuine social media influencer, driving brand awareness and boosting sales. Negotiating these agreements requires a strategic approach, particularly in an environment where the authenticity of follower counts and engagement metrics is frequently questioned. This article offers a detailed exploration of how to effectively engage and negotiate with online influencers, ensuring transparency and optimizing costs to benefit your small business.
For example, if you are a retail liquor store looking to engage an influencer, you will want to know that their audience is of legal drinking age, enjoys alcoholic beverages and that the influencer content is related to the category.
Understanding the Influencer Landscape
The Challenge of Transparency
The acquisition of Twitter by Elon Musk shed light on a critical issue within social media platforms: the presence of tens of millions of bogus accounts. This revelation suggests a similar situation may exist on other platforms like Facebook, Instagram, and TikTok, complicating the valuation of an influencer’s true reach and engagement. Moreover, the lack of reliable consumer data from influencers adds another layer of complexity.
Strategies to Enhance Transparency
To navigate these challenges, it is essential for business owners to implement robust verification methods:
Determining if a social media influencer is buying followers is crucial for maintaining the integrity and effectiveness of your marketing campaigns. Here are several methods you can use to assess whether an influencer’s followers are genuine:
1. Engagement Rate Analysis
Compare the influencer’s number of followers to their engagement rates (likes, comments, shares). A genuine influencer typically has an engagement rate of 1% to 3.5%. Significantly lower engagement rates could indicate that the followers are not real, as purchased followers are usually inactive accounts.
2. Follower Growth Trends
Analyze the social media influencer’s follower growth over time using tools like Social Blade. Organic growth usually shows a gradual increase in followers. Sudden spikes in the follower count that cannot be explained by viral content or media appearances may suggest the purchase of followers.
3. Quality and Relevance of Comments
Look at the comments on the social media influencer’s posts. Genuine comments are usually relevant to the content and indicate that the audience is engaged. A prevalence of vague, repetitive, or irrelevant comments can be a sign of fake engagement, often generated by bots.
4. Audience Demographics
Use analytics tools provided by social media platforms (like Instagram Insights or Facebook Analytics) to examine the demographics of the influencer’s audience. Discrepancies such as a significant number of followers from countries irrelevant to the target market or inconsistent with the influencer’s language and content may suggest inauthentic growth.
5. Consistency Across Platforms
If the influencer is active on multiple social media platforms, compare their follower counts and engagement rates across these platforms. Discrepancies in popularity and engagement without a clear reason can be a red flag.
6. Use of Third-Party Analytic Tools
Utilize third-party tools such as Hype Auditor, FakeCheck.co, or Social Audit Pro to analyze the authenticity of the influencer’s followers and engagement. These tools can provide detailed reports on potential red flags, such as the percentage of bot followers.
7. Direct Inquiry and Transparency
If in doubt, ask the online influencer directly about their growth strategies and request case studies or reports that demonstrate their influence and results from previous campaigns. Genuine influencers typically have no issue providing this information and are transparent about their growth tactics.
By thoroughly vetting potential influencer partners using these methods, you can better ensure that you are investing in relationships that will genuinely benefit your brand and help achieve your marketing goals.
Valuing Influencer Partnerships
Determining the cost of an online influencer partnerships is paramount. Traditional methods like paying per post may not always align with performance or business outcomes, leading to the exploration of alternative pricing structures.
Alternative Cost Structures
- Cost Per Lead: Compensation is based on the number of qualified leads generated through the influencer’s efforts.
- Commission on Sales: Influencers receive a percentage of the sales they directly help to generate, aligning their incentives with business results.
- Hybrid Models: Combining various methods can tailor the compensation to specific campaign goals and budgets.
Each model offers distinct advantages and can be chosen based on the campaign’s specific needs and the reliability of the influencer’s data.
Determining Value of a Podcast Influencer
Determining the value of advertising on a podcast involves assessing several key factors to ensure that your investment reaches the right audience effectively and yields a satisfactory return. Here’s a step-by-step approach to help you evaluate the value of podcast advertising:
1. Audience Size and Demographics
Understanding the size and demographics of the podcast’s audience is crucial. Check the average number of downloads per episode to gauge reach. Demographic information such as age, location, interests, and income levels of listeners will help you determine if the podcast aligns with your target market. Many podcasts provide this information directly, or you can request it from the host or advertising manager.
2. Engagement and Loyalty
Podcast listeners are often highly engaged and loyal to their favorite shows, which can translate into higher conversion rates for advertisers. Evaluate listener engagement by looking at social media interactions, listener reviews, and feedback. Also, consider the frequency of episodes and the consistency of the audience, as regular listeners are more likely to trust and respond to advertisements.
3. Content Relevance
The content of the podcast should resonate with your brand’s products or services. A natural alignment between the podcast’s theme and your offerings enhances the credibility of your advertisement and increases the likelihood of listener interest. For instance, advertising a fitness app on a health and wellness podcast is likely to be more effective than on a technology-focused show.
4. Ad Format and Placement
Podcasts offer various ad formats, including pre-roll (before the show starts), mid-roll (middle of the show), and post-roll (end of the show). Mid-roll ads are generally the most effective as they catch listeners at peak engagement. Evaluate the costs associated with each type and determine which offers the best potential ROI. Also, consider the style of the ad—some podcasts offer live reads by the host, which can be more persuasive than pre-recorded ads due to the personal endorsement from the host.
5. Cost
Assess the cost of advertising on the podcast and compare it with expected returns. Costs are usually based on a cost per mille (CPM) model, charging per thousand listens. Look at historical data or case studies provided by the podcast to estimate how other businesses have fared with their ads. This can help you understand whether the advertising rates are justified based on past advertiser outcomes.
6. Conversion Tracking
To directly measure the effectiveness of podcast advertising, implement conversion tracking. Use unique promo codes, dedicated landing pages, or UTM parameters to track how listeners respond to the ad. This data will not only help you measure the immediate impact of your campaign but also assist in refining future advertising strategies.
7. Trial Campaigns and Feedback
Consider starting with a trial campaign if you’re new to podcast advertising. This allows you to test different messages, ad formats, and placements to see what works best with the podcast’s audience. After the campaign, analyze the results and gather listener feedback if possible to improve future campaigns.
Best Practices in Influencer Negotiations
Drafting the Agreement
When formalizing an agreement with an online influencer, clarity and precision in the contract are key. The following elements should be clearly outlined:
- Services Provided: Detailed description of the expected posts, stories, and any additional content.
- Performance Metrics: Explicit benchmarks for success, such as engagement rates or sales targets.
- Compensation Structure: Comprehensive breakdown of how and when payments will be made.
Maintaining a Professional Relationship
Keeping a professional rapport with influencers ensures ongoing success:
- Regular Communication: Schedule frequent updates to discuss progress and adjustments.
- Feedback Loops: Constructive feedback helps refine strategies and content for better results.
- Respect and Professionalism: Mutual respect fosters a productive and long-lasting partnership.
Key Takeaways
Navigating the complexities of hiring and negotiating with an online influencer requires a well-considered strategy that addresses transparency and cost-effectiveness. By employing thorough vetting processes, experimenting with diverse compensation models, and maintaining strong professional relationships, small business owners can leverage influencer partnerships to achieve substantial growth. Armed with these insights, you are better prepared to make informed decisions that align with your marketing objectives and budget constraints.
Optimizing these partnerships is not just about hiring an online influencer but forming a strategic alliance that propels your brand forward in the competitive digital marketplace.
Since its inception in 2003, ForexTV has been a global leader in forex news and has expanded its news coverage to multiple industries. ForexTV is now one of the most recognized brands in global financial news. Mr. Kelly was also the creator and founder of Retirement Intelligence.
Mr. Kelly is an expert in data modelling, technical analytics and forecasting. Tim has extensive experience in online marketing, search engine optimization, content development and content distribution. He has consulted some of the top brokerages, media companies and financial exchanges on online marketing and content management including: The New York Board of Trade, Chicago Board Options Exchange, International Business Times, Briefing.com, Bloomberg and Bridge Information Systems and 401kTV.
After leaving management of ForexTV in 2018, he continues to be a regular market analyst and writer for forextv.com. He holds a Series 3 and Series 34 CFTC registration and formerly was a Commodities Trading Advisor (CTA). Tim is also an expert and specialist in Ichimoku technical analysis. He was also a licensed Property & Casualty; Life, Accident & Health Insurance Producer in New York State.
In addition to writing about the financial markets, Mr. Kelly writes extensively about online marketing and content marketing.
Mr. Kelly attended Boston College where he studied English Literature and Economics, and also attended the University of Siena, Italy where he studied studio art.
Mr. Kelly has been a decades-long community volunteer in his hometown of Long Island where he established the community assistance foundation, Kelly's Heroes. He has also been a coach of Youth Lacrosse for over 10 years. Prior to volunteering in youth sports, Mr. Kelly was involved in the Inner City Scholarship program administered by the Archdiocese of New York.
Before creating ForexTV, Mr, Kelly was Sr. VP Global Marketing for Bridge Information Systems, the world’s second largest financial market data vendor. Prior to Bridge, Mr. Kelly was a team leader of Media at Bloomberg Financial Markets, where he created Bloomberg Personal Magazine with an initial circulation of over 7 million copies monthly.
