Influencer marketing is a booming global business. But does it deliver on its golden promises?

By Eva Kirstine Brünnich

The influencer blogosphere was up in arms when the owner of the Dublin hotel Charleville Lodge and the White Moose Café in January this year stated that he would no longer sustain collaboration with influencers.

His decision was prompted by an inquiry by British influencer Elle Darby, who with 135,000 YouTube and 114,000 Instagram followers proposed a collaboration in exchange for a five-day stay with her boyfriend – free of charge. Hotelier Paul Stenson posted this answer to Facebook:

“It takes a lot of balls to send an email like that, if not much self-respect and dignity. If I let you stay here in return for a feature in a video, who is going to pay the staff who look after you? (…) Maybe I should tell my staff they will be featured in your video in lieu of receiving payment for work carried out while you’re in residence?”

Later, Stenson wrote that the controversy “puts into question the authenticity of influencer marketing,” because “she would have spoken nicely about the hotel only because she was getting it for free.”

The example from Dublin is not one-off. Based on interviews with a number of luxury hotels in the Maldives and Bali, ‘The Atlantic Magazine’ reported that many such hotels get up to 20 requests a day and have had more than enough of Instagrammers seeking to stay for free.

The use of influencer marketing has exploded worldwide since 2015, as has requests from bloggers, YouTubers and Instagrammers. According to a study by US influencer marketing agency Mediakix, the global market for influencer marketing will reach US$ 5-10 billion annually by 2020.

This year, companies globally will spend US$ 1.6 billion on Instagram influencer marketing alone, and that figure will rise to US$ 2.38 billion in 2019, according to the statistics portal for market research www.statista.com.

NUMBER CRUNCHING

But what is the real value of working with an influencer? Is it a waste of money?

“No,” says Zeth Edwardsen, founder of Woomio, the Danish influencer data service. “But too many companies are fumbling in the dark when it comes to choosing the right influencer for their brand. Simply because too few are aware of the online reach and results of their potential influencer partnerships.

“The general perception among businesses today is that they should focus on the number of followers individual influencers have and how many posts they make monthly. But you need to dig into the figures to build a sound foundation for your marketing. It’s equally important to know what topics influencers write about and what target audiences they’re reaching.

“You should be asking which posts are the most liked among their followers and what engages them. You also need to know in which time zones the followers are active. It’s very difficult for brands to know what to invest in and what the return is,” he says.

Zeth Edwardsen created Woomio due to the lack of available data on influencers. He was annoyed at how opaque this market really is. Woomio’s purpose is to make the relationship between brands and influencers more transparent using data and visualisations of user behaviour on blogs, Instagram, YouTube and Facebook. Woomio currently has more than 20 terabytes of data on influencers worldwide.

“For example, you can’t see if an influencer with 213,000 followers perhaps only has 10,000 followers in Denmark unless you check each individual follower. At the same time, a girl with 15,000 followers can reach 26,000 relevant people, while someone with 8,200 followers may actually reach just 1,400 relevant people.

“For example, if an influencer has 30,000 monthly views on their blog, one very relevant thing is to know how much content there is on the blog. You need to know how people visit. Are they looking for new or old content? You may end up with a paid collaboration not generating near the 30,000 views you had hoped for because the blog contains city guides or a popular food recipe of older date that continuously boosts the numbers,” says Edwardsen.

As an example, he mentions Danish sportswear company Hummel which for a campaign found an influencer with only 4,000 followers on Instagram, but her content was of high quality and the brand match was good. To ensure that the campaign reached out broadly, Hummel supplemented their strategy by collaborating with micro and macro influencers, which allowed them to achieve their reach and engagement goals.

By comparison, the popular Norwegian actor Thomas Hayes from the teen drama series Skam has 1.3 million followers on Instagram, which could seem relevant for a brand seeking exposure in Scandinavia. However, if you delve into the numbers behind his Instagram profile, it turns out that over 60 percent of his followers come from Russia, Ukraine and Poland.

Illustrations: Thomas Blankschør

BUILD A PARTNERSHIP

While the US market for influencer marketing is increasingly becoming performance-based, the Nordic countries lag behind in terms of measuring the benefits of their collaborations, Zeth Edwardsen points out. In Scandinavia, many companies build their influencer collaborations on trust, believing the influencer to be the expert.

“It may therefore be useful to also nurture long-term collaborations, establishing a relationship with the individual influencers to ensure greater involvement. This will also allow you to add requirements, such as stipulating that an influencer must stay several times a year at your hotel and refrain from mentioning specific competitors within the same period (…)

“Brands must wake up and make demands, such as on which hashtags to use and for content choice, etc. If an influencer is also a photographer, make sure you have access and the rights to the images so that you can use them yourself in your marketing. Always think in terms of what you want to get from this collaboration,” Edwardsen says.

With the boom in the use of influencers they will also start to encounter content requirements in other ways, says Kirsten Østergaard Poulsen, founder of Firstmove, a Danish company that studies emerging consumer trends.

It will increasingly become necessary for influencers to offer documentation for their reach in line with that offered by newspaper publishers in terms of circulation and readership, she says.

“First movers are retreating from digital channels. They install online ad blockers and seek information and objective news. They are becoming critical of the surge in influencers, and very few follow classic bloggers. Instead they follow, for example, a journalist who has something at heart,” Poulsen concludes, adding:

“Consumer behaviour is embracing sustainability and immaterial values, and this will generate shockwaves since influencers are largely contrary to such values. A blogger or influencer must provide information and content that support this development – generating likes for a smart dress or pair of sunglasses isn’t enough.”

CREDIBLE REVIEWS

An Oslo boutique hotel and part of Nordic Hotels & Resorts, The Thief is one of many hotels in Scandinavia that receives daily inquiries from bloggers and influencers from all over the world. The requests are for free stays in return for exposure on social media.

The hotel has introduced clear guidelines, says press officer for The Thief, Siri Løining. She has had to respond to inquiries from influencers since 2013, and the requests have kept increasing year after year. However, most are declined. Instead, the hotel offers influencers a special media rate, and according to Siri Løining, this provides more objective reviews.

“Generally, we don’t exchange free hotel stays for publicity on social media. We focus on developing good stories within our key interest areas, such as art, design and music. We work closely with journalists visiting Oslo and suggest that they experience a different side of the city.

“Since we have many British guests, having an article in The Telegraph has greater value to us than if an influencer were to post something about us online in exchange for a free weekend stay. We believe in credible reviews and not paid-for exposure,” she says.

But if this is to generate an effect it requires that you are spot-on with defining your target audience, Løining emphasises. “It’s easy to be tempted into looking at the number of followers rather than whom they are reaching. It is extremely important that the influencers we choose for, say, Instagram collaborations represent our target audience.

In Scandinavia, there are only a few influencers who represent the volume of followers that through a collaboration would allow us to reach our target group. That’s why we often end up choosing to partner with influencers outside Scandinavia.

We have a very clear perception of who our major customer group is: where they come from, what age group they represent and what interests they have, which also makes it easier for us to choose the right collaborators. Before we enter into partnership, we need to know what to expect in terms of return on investment. We shouldn’t just be guessing. We need to be sure that the followers of these influencers share our target audience,” she says, adding:

“Of course, we can experiment and try to reach new audiences, but I think it will take time, and much depends also on the price. I also think that micro-influencers often have greater effect than those with many followers, since we know that micro-influencers most often speak directly to their target audiences.”

MAKING INFLUENCERS WORK

Zeth Edwardsen’s rules of thumb

  1. Don’t expect anything the first time an influencer visits you, but ask for feedback. Instead, develop a strategy for your entire campaign, including when to engage with different influencers.
  2. You should ask yourself what the goal of each visit should be. Should it be to engage followers or make them take part in a competition, such as for a table for two on Valentine’s Day? Think about it in terms of concepts.
  3. Find five bloggers to match your brand. Require that they post in the same blog post. That ranks much higher in Google and increases visibility.
  4. Currently, there is often no unifying direction in the influencer collaborations that hotels engage in. Define clear key performance indicators for what you want to achieve. Get a grip on whether the influencer in question reaches the target audience you are seeking.