Transcript
Peter:
So Lyle, thank you so much for joining us on Unpacking the Digital Shelf, particularly in these moments where authenticity matters probably more than ever and, and people rely more on voices that they trust or that engage them. I think influencer marketing I would imagine as a category of marketing work is, is ever more important. And I was just wondering maybe as a way of setting the table before we go to what the heck's changing in this current moment. I think just give everyone a kind of base explanation of the role. Influencer marketing has been playing in commerce and, and what brought Maverick to life.
Lyle:
Yeah, great question. And influencer marketing has been a buzz buzzword for a couple of years now. But with everything going on in the world, it's become even more resurgent. And so the way we think about influencer marketing and Maverick, which is a SAS platform that helps brands partner with influencers to create content at scale. Influencer marketing is really this methodology of using people. Okay. A person or a group of people who are trusted, respected or even revered to help get a message out. And that influence that they wield is empirically evident and invalid. And some folks may debate the empirical nature of it, whether it's followers, visitors, subscribers, engagements you use, clicks, you know, you name it. But there is some tangible way to define and measure the empirical nature of their influence that they wield either online or offline. And it's been a burgeoning practice.
Lyle:
Additionally, it has been associated with actresses, artists, athletes, even journalists, we've been political or business leaders. But thanks to the power of our smartphone and the camera associated with that smartphone, what used to cost thousands of dollars and only available to a few has now become democratized and available to many because it now sits in your pocket and costs $50 a month. And this mass adoption of social media combined with the power of your smartphone has democratized influences to the point where millions of people now will influence it in a parable way. And it's allowed the mass adoption of influencer marketing as the practice by marketers. And a tremendous,
Peter:
Which makes sense. Is it true that there's also now like actual virtual influencers like
Lyle:
Yeah, it's gotten to a point where it's so empirical that you can use a VR, AR and AI to actually create a, not real people that simulate human behavior and human content on an Instagram or YouTube and, and actually still wield that same influence because those folks are shifting perception, demonstrating expertise or even being revered by their audiences still and therefore a reflecting influence even though they don't actually exist in real life. So it's a fascinating time for influencer marketing. Yeah. I almost feel I probably would be better off as a virtual influencer watching grapple work on that row. So tell me a little bit, you know, the, you said the smartphone sort of exploding this thing. How is the, you know, what's kind of, how do you measure the impact that it's had so far? Like what has growth been like when we look at a few different things?
Lyle:
At Maverick, I mean the first thing we look at, like most marketers, is what are people searching for and what's going on in Google. That's the first thing that usually someone does when they're going to buy something, whether it's on the BDB side or the BDC side and influencer marketing as a topic has grown exponentially in the last few years on Google search trends to the point now whereas of 2018 it's more popular as a search trend. Then social media marketing is as a search trend eclipse what would be, it's like a greater cousin in marketing if you will in terms of that volume and that's definitely because of both the marketer looking for him for some marketing, but then also the consumer who seeks to become an influencer looking for influencer marketing. So both sides of the dynamic are aiding in that. We've also seen the industry spend on influencer marketing potentially from less than a billion dollars a few years ago too. Multi-million dollars today. You know some are 10 billion, some are 15 billion. It's a matter of whether you include the incentives that go to influencers or whether you're just including the marketing spend on software and the personnel running influencer marketing. But it's certainly a multibillion-dollar industry at this point. It's actually
Rob:
It's smaller than but incomparable scale to Amazon advertising if we're looking for a trend. So that's, that's huge. It's actually a lot bigger than I knew and would have guessed.
Lyle:
Right. Yeah. I think a lot of folks think of influencer marketing as a small little tactical, a toolkit, but it's actually become a burgeoning strategic practice that's standing on its own apart from other tactics that you can use as a marketer.
Rob:
I know that when I visit people in Brooklyn, the joke is you walk around and if there's a, everybody's an influencer, it's like got the selfie stick and you've got the camera out there and they're all talking yet, and then they screw up the take and they bring their phone back in from the selfie stick and hit delete and hit rerecord and put the stick back out there.
Lyle:
That's right. Yeah. You definitely see the idea of an Instagram husband. It has emerged for real reasons. I qualify as one of those. My wife has started her own blog and has her own Instagram account and I'm certainly behind the camera very often for that, and this idea for a gig economy is helped, right? There's, there are folks that are looking to have side hustles and find new ways of providing for their families, and producing content with the democratized tools that they have access to now is sprinkling to come popular. What's up? What's so interesting about this explosion here is
Rob:
The original influencer when it comes to influencing shopping patterns was Michael Jordan, right? It's like Mike,
Lyle:
That's what I thought you were going to say. God was the front, but then you said shopping and I was like, okay, I guess,
Rob:
Oh, gee. Right. But more recently down here in consumer retail it has been like Mike and then and, and win that era, you're trying to sell Nike too. Everybody who puts things on their feet, right? And anybody who's possible foot footwear, the athletic purchaser is the audience to be like Mike. But these days the influencers are really specific to niche audiences and the specificity can sometimes make them extremely valuable,
Lyle:
Right? That's right. And that comes down to the empirical nature of influencer marketing. Today I can find someone in a very niche category topic, a region of the world that is talking with the authority and engaged audiences around that topic. And I can activate them in mass too, so I can then find a hundred or thousands of these people, but then one combined has an actually greater impact than Michael Jordan had as a standalone. And that's, that's the power of influencer marketing today.
Rob:
Okay. So we've got the trend now over the last five, six years that has been going from a niche subset of social media marketing to its own category of marketing, going from $0 million of spending to $15 billion of spend, which is just wild to me. What, what are the shifts that are happening within the influencer space right now that you're seeing that are
Lyle:
Structural in nature or, or really interesting? Yeah. As a result of this democratization, we're seeing who manages influencer marketing, shifting who participates as an influencer, shifting the various ways you recruit and find influencers and shifting the use cases and ultimately how you measure influencer marketing. So truly fundamental shifts are happening and have been happening over the last 18 months or so across the practice. And they're really exciting for us to be a part of your Maverick. And then marketers obviously taking advantage of those shifts have produced amazing results for them in your brains. Okay, well let's, let's start with the first one.
Rob:
Who manages it. I mean, one of the frequent topics that we have at the digital shelf Institute is the notion that silos within large manufacturers in particular need to be broken down in order to execute online strategies more effectively. So supply chain and marketing media and, and the trade teams, which can operate relatively independently of each other for traditional retail, if you're executing on Amazon, they all have to be part of the same strike team basically. Right? And so who, who traditionally has owned the social meet the influencers and who will own or, or starting to own the influencers going forward?
Lyle:
Yeah. One of my favorite trends is that influencer marketing traditionally was owned by a third party agency, a paid media agency, advertising agency who was responsible for media and media channels because influencers were traditionally looked at as just another media channel. And sometimes you'd CPR teams own it in house and social teams on in the house, again, as a media channel. But as more types of influencers have emerged, for example, this idea of a micro-influencer, which is an individual who has a day job like you and me, but then as a side hustle creating this content, maybe they have 10,000, maybe they have a hundred thousand followers with somewhere between that size audience active meeting those individuals at a different scale and also at a different cost equation has allowed other teams to take advantage of in influencer marketing, like the eCommerce team, like the loyalty team, like the digital team.
Lyle:
And as a result of that, influencer marketing is bridging the gap between immediate teams. Traditional social PR team and the eCommerce team. Because of influencer marketing, we'll help create brand awareness or be a media channel. And the asset that was displayed in that media channel is then pulled into an eCommerce experience and repurposed to drive additional value, whether it's on a product details page, driving more conversion rates, or after taking that photo and 60 days later I read a rating and review of that product. That's also then redisplayed. And so there's a lot more collaboration happening across these marketing departments and e-commerce loyalty. Performance-Based marketers are using influencers more so than ever before.
Rob:
If so, that actually you would also mention another major shift that has to do with the KPIs. Like I'd imagine that if the influencer is our own primarily by the media teams, they're talking about reach and reach like metrics as the primary way that they're successful. If the eCommerce team is involved, e-commerce doesn't really care that much about reach. They care about sales. So, that would, that would indicate to me that the influencers are moving further down the funnel in terms of impact on conversions. But how do they, how are they measuring that effectively? What metrics is an eCommerce team that engages with influencers like that?
Lyle:
Yeah, so you're right, you're exactly right. You know, three years ago, 2017, you know, 80% of influencer marketing campaigns are measured through awareness and reach and, and things like impressions, views, engagements, maybe brand lift, the share of voice, like very top-funnel type of metrics. And 20% of the time, maybe there were some other objectives. Fast forward to today, you still have 40% of marketers looking at influencers for awareness. So that hasn't changed and gone away completely. But it's, it's definitely shifted. And now almost an equivalent number of marketers are looking at sales offline sales lift attributed to online sales, basically they're on tracking links or promo codes, increases in lifetime value or loyalty behavior and improves conversion rates. When you produce influencer content, namely photos or ratings or reviews, and then syndicate that content either across your own eCommerce sites or your third party eCommerce sites, you're driving conversion rates on those locations as well. And those have been, those have become the more popular KPIs for those looking to drive sales. And we're still looking, we see other folks also look at content assets. They want a number of posts or photos or videos as a secondary metric, but sales have become more prevalent than ever before
Rob:
Or as part of the KPI mix for influencer marketing. So one of the things that we had, we had talked about before is the relation of that trend to affiliate marketing right there. You know, I, I, there's a certain type of influencer that is a pure-play on the affiliate side. So the classic example that validated this space was Wirecutter, which was then purchased by the New York Times. And Wirecutter is like a modern online consumer report for millennials. So you figure out what vacuum cleaner you want to buy, you go to watercolor, they tell you, you click on the link, it takes you to Amazon and Wirecutter gets a cut of that transaction. Right. so how is the, is what you're talking about in terms of the influencers, the attribution links and stuff like that. Is it simply riding on the back of what affiliate marketing is or is it something, is it something different or more than that?
Lyle:
I would say it's affiliate marketing. Plus I think there's definitely been an inspiration from affiliate marketing and we're certainly using partnerships with affiliate marketers to produce some of those tracking links that a brand is already partnered with prior to working with Maverick. Well, what we've also seen is this idea that because the affiliate commissions are starting to become a squeezed in the affiliate marketing, Amazon being a most recent example where they cut their rates from anywhere from 8% down to 3% influencers or publishers as they're often called in the affiliates case, are now seeking alternative revenue streams, which is leading towards more folks looking at the modern-day influencer marketing, of creating social content, video content, photo content, and getting and monetizing that photo content and video content and alternative ways, whether it's on a proposed basis could still be on a performance basis. But not so much as a last click performance basis. Maybe it's on an attributed basis when that asset is you someplace else outside of their traditional social channels and so that's what we're starting to see as it pertains to affiliate marketing and that's sort of when,
Peter:
When I think about trying to do that at scale with you know, however many thousands of micro-influencers that you're trying to manage at any one time, what is it like to recruit them, but then also what is the contractual agreement that allows you to be able to reuse their content or when you talk about sort of the channels you want to deploy to all the way to the PDP, how do you make all of that happen at scale?
Lyle:
Yeah, I mean transparently that's where like Maverick comes in. We help orchestrate that workflow and automate many of the steps that were done manually, whether via cold email and spreadsheet tracking. That's where marketers started with influencer marketing. But today when you look at your existing customers that are already visiting your website and they're there shopping and knowing and buying your brand, we are seeing roughly 8% of them have relevant micro-influencer any 8% and so identifying that person, either post-checkout or as another part of your consumer journey, inviting them to join an influencer or ambassador program and they raise their hand and they opt-in. That gives software like Maverick permission to analyze and get permission to understand what this person looks like from an influence perspective. And then if they fit the criteria, whether that's based on their audience, based on their content quality, based on the historical performance of folks that are similar to them, you can reach out and provide them with some sort of incentivization model.
Lyle:
And within that model we've seen a shift from primarily based on cash, whether it's activity-based, here's a hundred dollars to create a post and then here's 10% when you actually drive sales to, well, since you love my brand and I know you already shop with my brand because I found you through engaging with my brand, why don't I give you products or gift cards or even loyalty points? We're seeing loyalty as a larger component of the influencer mix or the influencer incentive mix. I should say that ever before and as a result, influencers are now shifting or migrating away from this transactional relationship where I'm just looking for the person with the highest bid on cash to a brand actually know love, who's giving me something that I want and now I'm willing to work with this brand for a long time
Rob:
And build a long term relationship. So if I'm looking at it, man, this is just so interesting, like the fact that you can manage influencers at scale to really niche down your targeting. This is like Facebook advertising promise, right? Where you can do really, really tight demographic advertising and Facebook's built an empire on that, on that key partner. What are the megatrends I think are really interesting in the last 12 years, you know, since the great recession is you look for world war II, the great recession, the percentage of us GDP that's spent on advertising is about a point in the quarter for that entire period of time. Some, sometimes a little up, sometimes a little down since 2008 it's been under a percentage point. It's like advertising as a percentage of GDP plummeted and it stayed low. And over that time the media mix has shifted so that you're doing less on the major channels, you know, prey suffered the most early on, but now you're seeing people pulling upfronts and contracts out of the TV into alternative channels. So if, if I'm, if I'm a brand, I mean you gave that $15 billion number on influencer marketing earlier. If I'm a brand and I'm thinking about brand advertising and I'm thinking
Lyle:
About cord-cutting millennials and millennials and I, and I'm trying to get my brain in front of them to grow, you know, my influence and reach and all this sort of stuff. I am an influencer from, from your perspective, the best way to do that today, like some combination of influencers and Facebook is like w where, where do you advise folks to, to switch their media mix in this, in this new world? Yeah. If you're reaching or targeting millennials or gen Z, they're spending their time on social. They're looking for what we call social proof. Every time they go to buy something, whether it's from someone they know or someone they follow or someone they aspire to be, they're looking for that social validation before they engage with that brand. And they often discovered their brands that way. They discover that next shoe or that next workout routine or that next recipe all via social proof.
Lyle:
And so if you're looking for that audience, influencer marketing needs to be at the forefront of your strategy. And you're seeing brands like a revolve who IPO last year, they mentioned influencer marketing more than 70 times in their IPO filing for a reason because they're going after that exact audience and they know him once her marketing is the forefront of their strategy. You also see legacy brands like Estee Lauder who are now spending 75% in the beauty space, which makes obvious sense. They're spending 75% of their marketing budget on influencer marketing and so we have 25% of their marketing budget. So that's right. Wow.
Peter:
That's kind of funny. Yeah, that, that is, that is a huge shift. Yes. So tell me a little bit about the, what are the categories? Are there categories that can't play influencer marketing? If, if I'm, you know,
Lyle:
I'm trying to,
Peter:
Maybe you could just sort of from the top ones down. I mean, the thing that comes to mind is poor B2B always gets left out of these things. Right? And so I'm thinking of it, I'm like, if I'm in food service, you know, when, when cafeteria has come back online at school, it's like, is there a reason why I can't find an influencer? If I was, say involved in you know, in trying to create a community like the digital shelf Institute, are there ways that I could sort of on mass uncover influencers or, or is it still a B to C play? And in what category?
Lyle:
I would say it's certainly dominated by B2C because it's, I would just say easier to find influencers in a BDC context and it is a B to B context. The B2B, a dataset is probably even more niche than the BDC context and that's part of the challenge. But we do see influencer marketing work equally as well on the BDB side. Once you find those people podcasts like this one is a great example and you now see enough folks sharing podcasts on social channels so that you can reach that signal or, or ingest that signal to find those podcasters and actually engage with them from a B2B context. But there's other channels as well that you should be looking at. Blogs are still very prevalent in the BDB context of that. The idea of guests flogging has been around for a long time and when you're launching a blog for the first time using influence marketing or influencers and influencer marketing to launch that blog a, as a key strategy we see on the BDB site all the time.
Lyle:
And is this working for a globally, I guess I can imagine all of the networks you need to connect to, to be able to do a global campaign tentacle worldwide. Is it truly global yet? It is. So it is absolutely global. If you look at those search trends that I mentioned earlier, actually the UK, so EMEA and Latin America are actually looking at influencer marketing more from a Google search perspective than the United States. And then you see the emergence of social channels like Tech-Talk that have grown out of Asia and the Asian Pacific markets and have then now become very popular in the United States. And so influencer marketing is not just an American concept for American strategy is very much a global phenomenon and growing faster in some parts of the world than even the United States. Now the spending is very different and that has to do with the investments of marketing in those parts of the world.
Lyle:
But in terms of the consumer adoption of influencer marketing and social media, it is just as prevalent in other parts of the world as it is here. What's if any are influencers that you personally follow and whose things they buy? Me? For me, if I, the one who has led me to many purchases is Tim Ferris. Yeah. I bullet Friday newsletter. I've purchased many things based on his recommendation that you add. Do you have somebody like that? So I have a few folks that I would put in the influencer category for me, both from a purchase behavior, but then also just from a discovery perspective. So one of my favorite influencers because of this snarky perspective and just witty way of creating content is actually a dude with a sign on Instagram. Seth Philips signed. Yeah. So his, his content is literally just a static image of him holding up a cardboard sign with a really witty message that is just pithy and to the point and relevant to the times.
Lyle:
But it also hits home on whatever's going on and typically has high engagement and then causes me to go maybe Google whatever a current event he's referencing and I just get more engaged with whatever's going on as a result of that. So I would put, do assign high in my list from a purchase behavior standpoint. I'm actually going to reference someone that my wife looks at all the time. And I see reflected in our credit card statements pretty often. And that's gametes, glam Julie angle who's out of San Francisco. And what's been interesting with her is that she has taken her influence to a whole nother level where she actually launched her own brand and created her own dress line. And that's another whole other part of the equation that we're starting to see where the evolution of an influencer is getting to a point where now they're becoming brands in their own, like their own way, launching their own product lines in their own way and creating their own direct to consumer commerce business as a result of the influence that they've evolved in wielding. So that's a whole nother, doesn't that
Peter:
Cause they're essentially setting themselves up as competitors to the people who use to hire them as an influencer? Like so they, that's sort of, that's a risk-taking enterprise saying cause what, you know, what competitor is now going to still use her as a, as an influencer for their product if it's, if she's selling a competitive one, I would think like, so she probably made a decision to take a leap, like to be her own influencer that I that that must be a fascinating,
Lyle:
Yeah. When do you pull that? Well from my perspective it certainly has a lot to do with the incentivization model. So why don't you get to that size and you're driving that degree of influence in your, you're driving, I mean clear purchase behavior for the likes of Nordstrom's or our other fashion brands specifically, and using affiliate platforms to measure that sale, a reward style being a very common one within the fashion category. You then start to price yourself out unless you're only driving sales. And then if you're driving sales at that volume, why not drive sales? So your own products, you can increase the commission rate for yourself. And so that, that's the inflection point is that she probably saw I'm driving 10% in commission and 3% whatever it was in commission to this larger brand. I can retain 50% of the cost of a good soul component when it's my own product. Right. And that's, that's essentially what's happening with some of these large influencers is they're realizing when I break, create my own brand, my commission rate goes up because it's my own product and it's as simple as that.
Peter:
No, I have friends who are micro-influencers and the amount of work they put into it, it is unbelievable. Yeah, it's definitely a full-time job. It infuses every, I'm overstating it, but so much time of every interaction that they're having in their regular life, like every moment is, is sort of, is this worth capturing? It's a, it's a really
Lyle:
Interesting shift, sir. Yeah, there's, there's certainly pros and cons to that, right? One of the common pieces of feedback that we hear for marketers but also just from consumers is that the influence of marketing can sometimes be perceived as fake and having like that Rose-colored perception of the world. All right. As a result, what's happened specifically COVID-19, and the pandemic is a shift from that perfect. In that image of perfection, like on Instagram to live streaming and what I'm doing at the moment, and it's not edited, it's not perfected, it's, it's in the moment. And as a result, more influencers are becoming comfortable with that idea of being more raw, more authentic, not putting up the perfect beauty routine or the perfect image of life actually driving more authenticity, more engagement, and actually more benefit to the market. So it's been a pretty interesting
Peter:
Shift to watch in the two months at least. This is like a version of the Truman show, except, except like the Truman show by selfie. Yes. It totally is the way that you guys are describing it. It's like all of this shows me all the time doing my own thing and LA and across every aspect of my life, man. Not for nothing, but that seems really stressful to me. It'll be a nightmare for me. But I'm clearly not the demographic that's making this work. You know, when we talk to influencers and creators,
Lyle:
One of the things we often ask is how do you cope with the pressure to be on all the time and to be available and to be responsive to your, to your audience, who is craving that reaction? And it's hard. And that's where a lot of the time goes. Certainly coming up with the content and producing the content takes up time. But just engaging and being a presence as an individual is equally as taxing for these influencers and creators.
Peter:
Yeah. So as the host of unpacking the digital shelf, I can totally identify with that pressure of managing, telling stories on a good note. It's nothing like that. So to close out you know, if you think of you know, sort of identify yourself with it, with our audience here, they're marketing and eCommerce executives who are trying to make the most of these sort of new ways to connect with consumers and, and do it at a scale that's reasonable. If you had three pieces of advice to sort of throw out to these folks to think about how they should guide their teams to either explore this or maybe change the way they're approaching it now, what might that be?
Lyle:
Yeah, I think the first one is just to think about influencer marketing as an influencer is more than an immediate channel. They are immediate channels, but they're more than that. They're a source of high-quality photography, a source of ratings and reviews of your product, and how people experience your product. And even more so there are sources of validated expertise and personal perspective that can be used in research. And insights, whether you're launching a new product, rebranding, or launching a new marketing campaign, using an influencer or creator at the front end of the process versus just at the backend as a distribution channel is something I would encourage every marketer to think.
Peter:
Can you tell me a little bit, judge, I think that's particularly interesting. Like how do you use them at the front of the process?
Lyle:
Well, so if you think through how traditional research organizations or digital folks focus groups are done, it's very much a self-proclaimed expert saying, yes, I'm a beer expert. I drink beer every day, right? Then maybe that's not the best example, but I'm a, I'm a sneakerhead or I'm really into running or shoes, right? With, with influencers, you can actually validate that by an audience around that topic, that they're creating content around that topic and people actually listen to them around that topic versus someone who's just self-reporting that they're an expert and as a result of that, you get unique insights around that topic or perspective. But the other piece of this is that they're also marketers. They're experts in how to engage an audience and create great content and understand the cultural moments that are relevant to consumers and what's going on in their eyes. And you combine those two things, the expertise with a marketing lens and the fact that they're a consumer at the end of the day, you get some really rich insights more so than you would get on a traditional focus group from what we've seen. And we see a number of our customers doing it. And then when you think about there's a computer,
Peter:
Sorry. Yeah, sorry, my wifi went out, so I just reconnected. So I'll pick up at the end of that and just sort of move you onto your next to your next advice.
Lyle:
Perfect. Yep. Okay. Yep.
Peter:
So if you've got your mindset about thinking about using influencers in different parts of your product life cycle, what's your next piece of advice once you've got that sorted out?
Lyle:
The next thing I'd recommend to marketers is think about different ways to recruit and find influencers. Too often I see markers, they always seem to go find a third party platform or partner that has a cohort of influencers that I can then reach out to and bid. And that certainly is part of the equation and that's something that can help you at scale doing influencer marketing. But I always encouraged marketers to look right at home, at their own brand. The folks that are shopping on their website that are subscribing to their newsletter and just ask them to raise their hand and join your influencer program or apply to your ambassador program. And you'll be shocked at how many folks raise their hand and have relevant influence. We've seen beauty brands get tens of thousands of people to raise their hands in the first three months of doing so. And they activate most of them to create content. We've seen fashion brands, we've seen CPG brands, we've seen a number of different categories. Look at their own existing customers, whether it's loyalty shoppers, app users, newsletter subscribers, you, believe it or not, you have more assets to find influencers already that you're probably under-utilizing.
Peter:
And then finally how do you make all this work? How do you, you know, we talked earlier about sort of closing the deal with them. Like what's the way to make sure you get the results that you want?
Lyle:
It comes back to the right incentive and motivating them the right way. And if you're using more than a social media channel or a media distribution channel and you're finding them from your own existing customers doing incentives that are aligned with your brand, like the product, like discounts, like loyalty points, that's very common. As I mentioned earlier, using unique and brand-aligned and incentivization models will maximize the ROI you're getting out of your influencer breakfast. Well, thank you so much for coming on and just giving us some schooling on what's going on, particularly in these moments, in influencer marketing. I think it's going to be a fascinating piece of the mix to watch and see how it changes over the next couple of years. So we really appreciate you bringing it here. Of course. Thanks for having me. Appreciate it as well.
