The Rising Importance of Micro-Influencers

Authors: Caroline Brunnbauer; Elena Buchegger; Lorenzo Cadorin; Kateryna Demchuk

INFLUENCER MARKETING IS THE NEW STAR ON THE MARKETING SKY.

For a first and quick overview of “Influencer marketing” please click on the picture below.

Due to our progress in media and technology, there are far more options for companies on how to market a product than in the past century. Traditional advertising, like on billboards or posters, can be seen as old-fashioned, whereas advertisement on the internet has been heavily increasing over the years. With the strong increase of different social media platforms, new promotion methods have been created. One marketing method in particular has proven to be very successful, namely “Influencer marketing”.

According to a definition of the Influencer Marketing Hub (2020), “Influencer marketing involves a brand collaborating with an online influencer to market one of its products or services.” (Influencer Marketing Hub, 2020)Influencers create a new opportunity for brands to connect with their target audience more directly, and especially more specifically. Brands approach them to have their products promoted by their social media accounts – with some kind of compensation of course. This could be the product itself, money or other incentives. Influencers are “people, who at relevant market place, have a reach greater than average or an impact through word of mouth” (Berger, 2016).

The idea of an “Influencer” per se is quite broad, as they can differ in the following features:

  • Power of influence
  • Reach
  • Engagement with the audience.

In terms of reach and power of influence, some influencers enjoy a large “fan base” with more than 1 million followers,  whereas the follower numbers of others are limited. Therefore, they can be grouped into three categories according to the amount of followers: Mega-influencers, Macro-influencers & Micro-influencers. 

While Mega-influencers often neglect personal interaction with followers, Micro-influencers convince with a strong connection, interaction and an authentic bidirectional relationship with their target audience.

Influencers also vary with regard to the social media platform. While Instagram is said to be the most used platform by influencers, other social networks are also quite often used in combination with the “leader”. To name a few, that are Youtube, Facebook or Twitter. 

The fact that makes Influencer Marketing so popular is that influencers are able to target niche consumers that have not been able to reach yet. In the past, traditional marketing techniques, such as celebrity endorsement, allowed companies to only target a mass audience. Nowadays, it is possible to only get in touch with an audience that is interested in a certain narrow category, e.g. in Fashion & Beauty. This industry ranks first when it comes to the use of influencer marketing, followed by Travel & Lifestyle (13%), Health & Fitness (12%), Gaming (7%), Sports (5%), and Family, Parenting & Home (5%) (O’Brien, 2020) .

This precise targeting , as said earlier, is THE key that makes this type of online marketing so special. It is therefore not surprising that their growth has been increasing extremely over the past years. It is even estimated that the industry will hit the $10 billion mark this year, by 2020.

Estimated Influencer Marketing Growth (YOY) 2016-2020, Source: O´Brien, 2020, p.4

This growth rate of the certain advertising concept is only one reason why more and more companies try to embrace this trend. Other three reasons are: 

  • Creating awareness towards the brand
  • Generating higher sales
  • Building content that is created by users to get consumer insights, opinions or just to achieve engagement.

What is more, the average earned media value per $1 spent has increased to $5.78 – a fantastic ratio to be honest.

 “What is your main objective when running an influencer campaign?”, Source: O´Brien, 2020

One of the best examples in terms of Influencer is Chiara Ferragni – the Italian Influencer with a global brand. She has more than 19 millions of followers on Instagram, turning her into one of the most dynamic and influential digital entrepreneurs around the world.

She is a “best practise” example in terms of digital influencing as SHE is her business.

Her face, her outfits, her thoughts, everything that comprises and represents her sense of self; being the best at being Chiara Ferragni is what she does professionally—and damn, is she good at it.” (Vogue, 2019). Chiara is a fashion blogger, businesswoman, a model and since 2018 also a mother. She was named in Forbes´ “30 under 30” list of power brokers and the Spanish Vogue put her on its cover as well. She is the founder of her blog theblondesalad.com that started with some posts and pictures, and converted it into a global fashion empire. Besides her own collections, her brand collaborates with famous brands of different business areas, such as food, beverages, fashion or cosmetics. To mention a few, she currently cooperates with Oreo Cookies, Champion or Lancôme Cosmetics – see examples below. 

Chiara Ferragni x Oreo Cookies (European Food Agency, 2020)
Chiara Ferragni x Champion, (Champion, 2020)

Now let’s talk about micro-influencers, the latest trend in influencer marketing.

Please click on the picture for the key facts of micro-influencing.

Who are micro-influencers?

Micro-influencers are common people, not traditional celebrities, with a quite high number of followers on social media. There is no real benchmark on how many followers one may have in order to be classified as a micro-influencer. “The spectrum of micro-influencer cannot be defined by any arbitrary follower count as these thresholds are completely subjective” (Gupta and Mahajan, 2020). It could be less than 10k or less than 20k, there is no number.

Moreover, micro-influencers tend to focus on specific areas of interest and they are very good at doing their job since they can persuade their followers in a more successful way than do the big influencers. Also, they are able to build a strong bidirectional relationship with followers.

More and more, many enterprises want to be connected to a specific audience that is particularly interested in the discipline of enterprise focus, rather than to just a vast group of many people. In fact, it seems that marketers are spending on average 47% of their influencer budget on micro-influencers, while just 23% for celebrity influencers.

Micro-influencers are very attractive to companies because of the following reasons (Pierucci, 2019):

They are trusted: this happens because Micro-influencers tend to be regarded as experts on a subject, and they have laser-focused supporters who take an avid interest in their views. On the other hand, many people follow mega-influencers and celebrities only because they recognize their names, but they may not necessarily be interested in the topics of their posts.

Due to their specificity, they are brand-relevant. Sometimes big influencers are chosen although they may not fit perfectly with the personality and the values of the brand. Usually, micro-influencers tend to stay loyal to brands since they may already have experience with them; also, given their lower popularity, micro-influencers tend to stay loyal to a brand in a certain category, making them less likely to accept better offers of directly competing brands.

In terms of availability, although there are many, it is very hard to find the right one since they are not so visible outside of their target. Finally, they are especially good in their ability to recommend and to boost conversion rate.

One of the most considered KPIs within influencer marketing is the engagement rate with their followers, which is higher on average than the one of big influencers. In fact, the table below shows that engagement rates decrease going from fewer to more followers in all the 3 platforms of this analysis. As a general rule, the higher the engagement, the better the response of followers.

Source: O´Brien, 2020

According to data, micro-influencers seem to be actually working.

Just to mention one striking number from a virtual beauty app company, the conversion rate of those that were inspired by micro-influencers is 22% higher than that of those who followed the suggestions of normal influencers.

Source: Perfect365, 2018

Why are micro-influencers so effective among customers?

They are generally deemed as highly credible and trustworthy since they are perceived as more consistent and experts in the field.

Secondly, they create greater sense of security on behalf of the consumer: when purchasing a product, the influencer serves as a tester person:

  • 58 % of people have actually purchased a product because of an influencer recommendation, in just the past six months.
  • More than 82% of people who like influencer content said they have made a purchase as a result of an influencer.

Moreover, customers prefer to relate with a person than a brand: in a survey of 2019, respondents were more than three times as likely to follow an influencer rather than following a brand. Also, buyers may identify with the micro-influencer, since they target people that are “just like them”.

Let’s make a few examples of how brands are using influencers (Source: Moreno, 2019):

Forever21

Chrysler

Google

Tom’s of Maine

Audible

What is interesting at a social level is that since technology has become so easy and user-friendly, the web is without doubt the greatest place for personal branding. Even more, social media apps are redistributing the power of influencing others. Through instagram or other apps, everyone having some talent in content sharing and a bit of luck can potentially influence other people through what they post and what products and services they recommend. It is the growing visibility of the ordinary, which leads us directly to our next topic: TikTok.

TikTok and micro-influencers.

TikTok is new to you? Watch the video below for a quick and concise summary.

What is TikTok and who are its users?

TikTok is a short-form social video platform, full of relatable, funny and engaging content that provides hours and hours of entertainment. Users can choose between uploading 15 second or 60 second videos of lip-syncing, dancing, pranking and pretty much anything. Filters, sounds and effects allow video-creators to express themselves in unique ways. TikTok has become a midpoint of a self-directed feed and an experience based on algorithms. When users open the app the first thing they see is a page called  “For You”, full of content they have demonstrated interest in, offered to them by an algorithm.

The popularity of the Chinese social platform has been rising. It is available in 154 markets and 75 languages and was the most downloaded app on Appstore for Q1 2019 with 33 Million downloads worldwide. With its 500 million monthly active users, it is no longer a niche video sharing App, but one of the most popular social media platforms, which presents a lot of new possibilities for marketers. It is a perfect platform to target consumers of Gen Z.

“TikTok is the Most Downloaded App on the Apple App Store.” Source: O´Brien, 2020

In fact, 69% of its users are 16-24 years old, around two thirds of whom are female.  While most of its users are coming from the US it already has a huge audience in Europe. For instance, in Germany 5.5 million monthly active users spend on average 50 min on the app per day, generating 13.4 billion monthly video views.

Source: Firsching 2019
 Source: Firsching 2019

Why is it worth advertising through micro-influencers on TikTok?

First of all, micro-influencer marketing is preferred for its perceived authenticity and TikTok with its self-made, not-professionally-edited videos is a perfect tool for them. Rise in authenticity of micro-influencers can increase your brand’s authenticity in the long run. Furthermore, micro-influencers are loved by marketers for their high engagement rates. TikTok’s average engagement rate is the highest among global social media platforms reaching unprecedented 9,38% for micro-influencers.

Consumers like the app because it is highly user-driven, they appreciate not feeling targeted by brands, like on Instagram. Carly Carson, director of Social at PMG Digital Agency says:“I would hate to see the app become more commercialized. If the curated content can stay true to the highly creative nature of current TikTok content, it could win. But if it’s just a replica of other apps’ approaches to curated content, it might fall flat [with] TikTok users.” Therefore, targeting consumers through micro-influencers is essential to maintain the creative, authentic, funny way and keep up the engagement rate and users’ motivation to post and share videos (Ting 2020).

The self-service ads platform of TikTok is not available for the DACH region yet. Brands not being able to display advertising placement on their own is another reason for using influencers. There are numerous features from which micro-influencers could benefit on Tik-Tok, such as hashtag challenges, brand takeovers (sponsored content linked to the landing page of a brand) , brand lenses, branded stickers and many more (Villanueva 2020).

Source: Mobile Marketer 2019

Generation Z is going to be the most important consumer group in the future. They are digital natives, who grew up with social media and are sensitive to direct advertisement. They prefer authentic and engaging content and follow a lot of micro-influencers , which makes TikTok a perfect tool to reach them.

TikTok offers a lot of possibilities – but what sacrifices must the users make in order to use the service?

Click on the picture below for a brief overview of the downsides.

There are many concerns about TikTok’s data privacy practices. For example, a complaint was filed against TikTok claiming that TikTok is illegally collecting data from minors,

Officially, the TikTok app requires users to be at least 13 years old to user and access it.

The age limit is the same as on other social networks such as Facebook, Twitter, Instagram etc.  However, the complaint alleged that Musical.ly had violated the Children’s Online Privacy Protection Act, that requires online companies and websites such as TikTok to instruct children under the age of 13 to seek parental consent before companies collect personal information.

This is not the only problem with the very young crowd using the app. Over the course of three months, an investigation by the BBC collected lots of sexual comments posted on videos uploaded by minors.

While TikTok deleted a large number of these comments, the users who posted those comments were not removed from the platform, despite TikTok’s rules that prohibits sexual content that is directed at children.

The BBC could also identify a number of users who repeatedly  approached teenagers online to leave sexually explicit comments on their videos.

All comments were reported to TikTok using the same tools that every user can use.

Further, an Israeli company named Check Point found out that Tiktok apparently had problems that would have allowed attackers to send messages to TikTok users including  malicious links. If a user clicked on the link, the attackers could have taken control of user accounts, which would have enabled them to upload videos or access private videos.

Another vulnerability allowed Check Point researchers to retrieve personal data from user accounts through TikTok’s website.

The researchers also found that the TikTok website was prone to a kind of attack that introduced malicious code into trusted websites. The research teams could retrieve users’ personal information like date of birth and name of the user.

Another concern is that TikTok can read what iOS users copied into their clipboard whenever it is opened. This means that the app has access to the content copied that is intended to be pasted even if the user does not want to paste it into TikTok. It is unclear if and how TikTok uses this data.

Despite these issues, US lawmakers are concerned that TikTok is censoring material that the Chinese government does not want to be online and allows the government to collect user data. Both of these accusations have been denied by TikTok.

Since TikTok is owned by a Chinese company and is governed by Chinese law, this means that the government has access to all data that TikTok collects. And apparently it collects a lot of information, like a user’s phone book, what people do on their phone etc.

Taking those potential threats into account, it is necessary to think the use of the app through very thoroughly. What also needs to be considered is that a large part of the crowd that the advertisements are shown to on TikTok are children. As marketing to minors is very controversial, the use of TikTok as an influencer tool will for sure be discussed a lot in the near future.

Some words to conclude …

Micro-influencers will be more and more important in the next years and TikTok may be the #1 place where to find them. Despite the dangers entailed, the trend seems pretty clear. In a society in which word-of-mouth is an important source of increased conversion rates, people seem to trust more the opinion of other consumers just like them, rather than big and well-paid already-famous influencers. This sounds like a movement towards higher equality within the influencer marketing landscape. Observing how the next years will look like will surely be exciting.


Sources

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