What size influencer should companies work with?
Bill Hildebolt is the CEO of gen.video, a premier performance-based influencer marketing platform that enables creative and video storytelling to drive conversation and inspire e-commerce purchases.
In this episode, he’ll share what brands need to know about working with influencers, including:
- The difference between nano, micro, and macro influencers
- Why macro influencers are more cost effective
- Understanding engagement vs audience
- Best approaches to using influencers
- And more
Mentioned in this episode:
Transcript
Voiceover: This is Performance Delivered, Insider Secrets for Digital Marketing Success with Steffen Horst and Dave Antil.Steffen Horst: Welcome to the Performance Delivered Insider Secrets for Digital Marketing Success podcast, where we talk with marketing and agency executives and learn how they build successful businesses and their personal brand. I'm your host, Steffen Horst. The topic for today's episode is what size influencers should companies work with. Here to speak with me is Bill Hildebolt, who is the CEO of gen.video, a premier performance based influencer marketing platform that enables creative and video storytelling to drive conversation and inspire ecommerce purchases. Bill is a digital entrepreneur with a passion for video, e-commerce and consumer empowerment. He has 15 years of experience as a founder and executive and another 10 years in finance as a venture capitalist, investment banker and commercial banker. Bill, welcome to the show.Bill Hildebolt: Thanks, Steffen. It's great to be here.Steffen: Now, Bill, before we start talking about what size of influencer companies should work with, tell our listeners a little bit more about yourself. I saw that, you know, gen.video was founded back in 2004. Influencer marketing as it is these days probably didn't exist back then. So tell our listeners a little bit about yourself. How did you get started in your career? What led you to founding gen.video? And did you pivot at some point to what it is now?Bill: That's a great question. So I started in finance, which really only has applicability today and that I love the analytic side of the business. And we'll certainly talk more about that. At some point, though, I kept getting closer and closer to the business side. I started in commercial banking, making loans, then investment banking, doing deals, ultimately venture capital, investing in companies. And that's where I first got exposed to user generated content. So it was right after that, that I made the jump into entrepreneurship. And what I would say is that there's absolutely been a shift back in the early 2000s. There was no such thing as influencer marketing, there was word of mouth marketing, there was user generated content. But the idea of social media, let alone influencer marketing, as we know it today was obviously non-existent. And so our initial idea had to do with video, ecommerce and user generated content. And so let's call it a riff on text reviews that eventually text reviews would become more rich media oriented. And that sort of predicted, if you will, the rise of Instagram and YouTube. We had a very ecommerce lens on it, which we've retained, but think about us early as almost being like an ecommerce content production shop. And so when influencer marketing came around, and the idea that you could effectively marry a media buyer to that. Ie, the influencers, being publishers of content and generating awareness, not just the content to use on a product detail page. That was the eureka moment where it sort of all came together. And so it's been a really, really exciting ride since that moment.Steffen: Interesting. Now, what size of influencer brands work with? Let's start off, you know, with that question.Bill: It's a great question. And what I would say is, this is where we tend to be a little bit different than the conventional wisdom. And so, and again, while the answer to the question is, it depends. Guess I should have had a lawyer. And it depends on the KPIs. We think that brands should actually typically be working with the largest influencers they can afford. And the very important caveat within that statement, though, is the influencers should be influencers in the verticals that the brand is interested in speaking to. So what I'm not saying when I say work with larger, fewer and larger influencers for the budget you have, if you want to sell laptops, I'm not saying you should work with a Kardashian. Even if you can afford her. I'm saying you should be thinking about folks like Linus Tech Tips and Unbox Therapy in some of the largest names in that vertical. And if you're in a different vertical, then you find the applicable large influencers in that space. So I suppose our strategy would be a little bit of a go big strategy.Steffen: Now, I get the part, you know, you need to find influencers that are representing the area that your product your service is aimed at, right. Because that kind of probably gives you a better outcome. But there's always the question between should we go with nano micros, or should we go with macros? There are obviously pros and cons to both of these groups. Can you talk a little bit about that because I think that kind of relates really well to what size of influencers.Bill: Yeah, Absolutely. Well, so the reality, and this is where we buck the trend a little bit. There is absolutely a love affair in the industry right now with nano and micro influencers. And again, there are some specific situations where they actually do work really well. Hopefully, we'll have a chance to talk about that. And I don't have anything personally against nano and micro influencers, we do work with them. And the reality is, if you Google the question, what size influencers should I work with? Or you start reading even the research, a lot of the research that's available online, this love affair with nanos and micros is really pervasive. Everyone just talks about how amazing they are. The only problem is that, except under some pretty specific circumstances or goals, it's just wrong. The answer is, you more typically want to work with the larger influencers.Steffen: So that's an interesting point, which, as you say, yourself, it's kind of completely opposite to the, I don't want to say conventional wisdom. But it's more completely different to what most of the market is talking about. So talk about why your opinion is that I don't want to say forget about the nanos and the micros, but you should work with the macros that you can afford.Bill: Yep. There's kind of two things that really drive that. And it comes from the data, and the expertise that that my company gen.video has. So again, if you think about where, I talked about where we started, we started creating content that lived on product pages on Amazon, and then on Walmart, and Target and other national retailers. And so the first set of data that we were looking at is the impact that content could have when it lived on a product detail page. And so one of the things that's obviously true when you're on a product detail page, and a lot of consumers, the first thing they look at is the images and the video that are at the top of the page. In that top left hand corner, what we call the hero area. So the first thing that you think about there is, one you actually don't need a ton of content there. But you do need really compelling content. So for us, there wasn't, you know, a need to have hundreds of videos or images to sort of sort through. In fact, they almost got in the way, when you had to do that to whittle it down. And I'm gonna come back to why that's relevant, because that may not seem as applicable to, you know, to the social media environment. But first of all, what you did need for sure, is you needed very high quality content. And the higher quality and more compelling, the more influential that content was, that you put in that hero area, the greater the lift, and the conversion rate of the page. Meaning that that content was influencing more people on the page. So that was the first insight. And so the next thing that we were looking at was the impact that the traffic coming down funnel could have on that product page. And so literally, the attribution based sales that were coming from the traffic resulting from the influencer posting on their social pages. And what we found was, from a cost efficiency perspective, whether or not you look at the cost per click, or even the cost per view, some slightly higher funnel metrics, larger influencers tended to be much more cost efficient, than the smaller influencers. When you then couple that with another fact, which is for the same, let's just imagine you're going to spend $100,000 on the campaign. If you spend that $100,000 on four influencers at $25,000 each, that's a lot less work for you as a manager, or anyone else participating in the campaign. Versus trying to manage, say 25 influencers at $4,000 each. Let alone 100 influencers is $1,000 each. So the personal efficiency and resources required to manage these campaigns, with dozens or hundreds of micros or nanos, really compounds. What we found was a pre-existing cost efficiency relative to again, the ultimate cost per click, cost per view, or other true value based metrics that drove the success of a campaign.Steffen: Two questions to add to what you just said. The first one is around targeting. So when on an advertising perspective, right, we as online advertisers, we aim to break down audiences into sub segments, because then we are able to be more precise with messaging with whatever we sent them, etc. Now, the more precise we are, the more expensive it goes. But it should yield better results because it's more targeted. When you, and now I'm kind of flipping this over to the influencer side. Wouldn't it be better to work again, with several micro influencers, where I can really hone in on specific audiences, and then have specific messaging offering for the group that those influencers represent, instead of having one bigger one that goes across the entire target audience? Does that make sense?Bill: It absolutely makes sense. It's a brilliant question. I love it. And I will do my best to give it justice. The answer is that ideally, yes. Ideally, yes, that would be awesome. The reality, and we could potentially debate whether or not this is a matter of the feasibility in even the best of cases of doing it versus or is this a question of the social platforms holding some of that audience data so closely to the chest, that it's not possible to do it? But the answer is that it is very hard to micro target within influencer segments, and within an individual campaign, to do these micro niches the way you're talking about. So first of all, generally, you're going to be talking about, even when you're looking at an influencer's audience data, obviously, you are looking at their subscriber or follower audience data in the best of worlds. You're not actually able to target individual viewers or know who within those segments targeted. So even within that, you would, you'd have to put in a whole heck of a lot of work to kind of say, well, you know, I want this audience that appeals, you know through this influencer to blondes and I'm going to use these other influencers to appeal to brunettes and these other influencers to appeal to redheads. You're probably going to end up making trade offs in terms of quality or other demographic items that you're not comfortable with. And so this is where actually the power, so one, I'm an apologist, for organic. I always prefer organic influencer to paid boosting for reasons we don't even have to get into. But let's just say for sake of argument that it's because that's the world that I come from. However, the more time goes by the more we actually do in paid boosting, because we can get the targeting that we want. So we don't want to compromise video quality, and meaning production quality. We don't want to target some of the other intangibles like the broad appeal of an influencer and match to a brand overall, in order to what I would say, trade into those specific niches. We'd rather let the paid media engines which are going to do that so much better than we're going to be able to do that anyway. And again, this might still be you know us, either partnering with an agency or indirectly buying on a Meta on a TikTok on a Facebook to do the paid boosting to reach down into those niche audiences. You know, and that gets into that really comes home when you think about some examples, like, you know, we work with some pharmaceutical companies, and they may want to talk about individuals that have a medical condition. May not be anything serious, maybe something lots of us have in certain parts of our lives. But athlete's foot, for example. There are no channels targeting people with athlete's feet. So how are you ever going to build an influencer targeting strategy that covers that? You just have to find influencers that generally meet the demographic that you're interested in. Let's say it's athletes. Then you have to think about, okay, have they had the condition? Okay, great. Those two things are gonna get you down to a pretty narrow list. And those are probably going to be the influencers you're going to want to work with. And then you're going to want to reach people who have athlete's feet through targeting paid amplification on the target platforms.Steffen: Interesting. Now, I mean, the example you just gave, even from a digital marketing perspective, it's not possible, obviously, to target anyone who has athlete's feet. I mean, that's very personal information. And that's obviously not available. But as you rightly said, right, there are certain indications that can be used to identify a group of people that either falls within that audience, or sits outside of that audience. Now, I said earlier, two questions from your previous statements. So the first one was around, you know, audiences and whether it's better to kind of go after the big group or kind of to segment. The second one is on price. Is the price relevant as it relates to how you remunerate the influencer? Whether you should go with macro, or nanos and micros?Bill: It's a great question. And this actually is one of the conditions where working with micros and nanos can actually become more cost efficient. And again, when we talk about costs, obviously, it costs less to work with micro and nano than to work with a macro or a mega. But what's interesting is, if you look at it relative to the reach, or even the expected impressions or views of a macro versus a micro nano, again, it actually is more cost efficient to work with the larger influencers. And when is it. Because what ends up happening is right, there's a certain time value of money that we all put onto our time. And so below a certain threshold, it doesn't, it's not economic, for a micro or nano to be an influencer. And you know, to go after the sponsorship dollars, so they have to charge a minimum fee to kind of cover their time. As you get into larger influencers. Think about it, they almost become like a corporation. And so while the talent themselves, right, their hourly rate, if you want to think of it this way, might be really, really high, they've actually figured out how to have staff that are working at lower rates. And when you just average, or even the demand, the number of brands that are able to pay them is so few that from a supply demand perspective, they just end up being more cost efficient. And again, this is, we're just so new in the industry that this is some of the things that people really haven't torn apart yet, as best I can tell, to understand some of these dynamics that are at play. But on the other hand, the other reality of micros and nanos is that a lot of them are actually willing. They're willing to work, essentially for free, perhaps for a free product. And when you are working with them at that scale, and you're basically taking cost almost out of the equation. Yes, it is hard to argue for free. And especially when your core deliverable may be awareness, then you can, you can definitely start to move the needle. In fact, even if you're a DTC brand, and you're trying to drive generate sales, obviously free if they're generating any kind of sales, and you're getting the content and that traffic and that awareness for free. And you're putting out you know, and there are hundreds, if not 1000s, there's probably a bit of a flywheel amplification effect that's going on. That's where we think the economics makes sense. And so I'd say it's actually a situation where maybe for a lot of smaller brands, who even have more of their own time to hustle and identify all those micros and nanos and develop relationships, then that is probably, or potentially the more cost efficient way to do it. But if you're a larger brand, and the time value of a brand manager's time is exceedingly high, like I was talking about before, right. You think again, about that equation of a brand manager on a large brand, doesn't have time to vet hundreds of influencers. If they can make that choice to work with the macros and the megas, that is going to be a much more efficient use of their time. And they're actually going to get better return on investment on their dollars. Especially when he also considers things like they probably want to reuse the content and have bigger ideas for how to reuse the content. So they need the content rights. And no influencer is giving away content rights for free. So you're just, it's almost like two different industries. And that's part of what I think's gotten conflated in the discussion online.Steffen: Now, just for a moment, staying with the price point. When you do awareness, right. Kind of paying a lump sum or a fixed fee, whatever it is to the influencer, that makes sense. If you are a man selling products, using the influencer as kind of a salesperson, so to speak, what are, from your perspective, the better approaches to work with an influencer? Is it agreeing on a percentage of serial CPA? Or is it still using a fixed fee kind of approach? And with that in mind, would that change your view on the micros and the nanos?Bill: Yeah, absolutely. So there is absolutely this convergence of what I'd call the affiliate model where it will make you know, will allow people to generate tracking links, affiliate links, and you know, if a sale occurs, then we give them a percentage of the sale. That works equally well for micros, nanos, you know macros, and there's lots of companies that are, you know, building up businesses that way. That industry is overlapping with, merging with, you pick it. You pick your definition with influencer marketing. Where we've tended now, and by the way, that tracking technology, you know, is the same type of tracking technology that we do to make some of these economic assessments of what is more cost efficient for a brand. The reality is that influencers are only willing or able to work with those performance based models in certain situations. And, you know, and make those trade offs. And so the question is, what are you doing, if you can't get enough influencers to participate in those type of models? How are you going to approach them, and continue to run your marketing campaigns. In those cases, that's where we tend to prefer the flat rate sponsorship fee. It's a known model, the influencer feels great about it, there's really no questions about, you know, your ability to prove the content. That's where, before it goes live, that's where you have the ability, obviously, to get re-usage rights, and things are just very clean and defined. And so again, that's what tends to work really, really well with those macros and megas. And then again, break down a little bit with the micros and nanos, where they may not understand the content rights issue. The again, just to have any kind of a flat rate may make it uneconomic. And so for sure, working with the micros in the nanos, on those performance based deals. And there, it's just a question of meeting in the middle as to what works for the brand and what works for the influencer. There may be certain situations, like electronics, where, you know, a percentage of sales is a great deal for the influencers. But maybe if it's a consumer packaged good where you know there's going to be leakage and you're just happy to have the awareness and some sensibility of some metric that was trackable, a CPA, or a cost per click type model could work really, really well.Steffen: Yeah. So, Bill, is it fair to say, really the size of influencers a company should work with depends on a few things. Depends on what tactics or what are goals of the insurance campaign. Potentially even, you know, do you want to use the content generated for other activities? Or do you want to take over the rights of the content that is being generated? And then also, obviously, what's the available budget that you, the company, has available for the engagement?Bill: Absolutely, I think all those things come into it. And so setting up a framework right from the beginning, what are we trying to accomplish here? And let's really prioritize, right. Let's not have a situation where we're saying like, oh, we want all of it. Or simplistically saying, you know, we want online sales. If, again, let's say where that athlete's, you know, cure right? Is it realistic, maybe it is realistic to sell a lot of that cure through Amazon. But maybe people still want to go to the drugstore. And so understanding your channel, and how you're gonna speak to consumers, is really, really critical to be honest in that framework that you set up, is going to define the strategy ultimately, that you have. And again, beware of your influencer platform. Whether it's gen.video or anybody else, right, trying to talk you into a strategy that fits their technology, their capabilities, and their interests. Because the other thing I think that potentially gets a little bit into the love affair with micros and nanos is it really does require a pretty sophisticated technology to run those types of campaigns. Very hard to do in a Google spreadsheet, right. So if I've got to identify hundreds of influencers, I need a discovery platform. If I'm trying to manage all of their content, it really needs pretty sophisticated workflow engine to do that. And so, you know, am I telling you, that's the right strategy, because that's what will get you to buy my software, or am I telling you, that's the right strategy because it meets my goals. And as long as it meets your goals, and it's logical to you then you'll do great.Steffen: Interesting now before we come to the end of today's podcast episode, Bill, do you have two, three top tips for anyone listening? Thinking about, you know what, do we really have the right strategy with our macros and nanos or should we rather move more a little bit to the bigger ones?Bill: I think the question is, what are we measuring? And are we getting the results we've gotten? And, you know, frankly, do we feel like we're exhausting ourselves because it should be fun. You should be having fun doing this, working with influencers and, you know, getting that much closer to your customer. It should be as fun and as exciting as you know, I think people perceive the industry to be from the outside. So if you're not having fun, that's a problem. Obviously, if you're not getting the results that you want, or you feel like you're working extra extra hard, then something needs to change. And you know, and the question is, you know, are we really measuring things that matter? And so one of things we didn't, you know, have a chance to talk about is where did the love of with micros and nanos start? And as best I can tell, it really started with kind of a misperception around how engagement rates were measured. And so a few years back, when it was really difficult to measure sales impact, people were trying to look at metrics, any metric they could, to understand how the audience was reacting to content. They were using something called engagement rate. Except what they were doing was measuring engagement, which is things like comments over an influencer's audience, versus actually the people who saw the post, because that data wasn't always available. The problem is, I don't really care how big your theoretical audience is. I care about the people that looked at the post. And so but we weren't even controlling for that metric. And actually engagement over audience, total potential audience, does decrease for an influencer over time. But the actual audiences could still be rising and could still be, even on engagements, much more cost efficient to work with a large one. So understand what you're measuring. What the true definition is. And is it guiding you down the path you want to be led down? If you do those couple of things, I think you'll end up in great shape.Steffen: Perfect. Well, Bill, thank you so much for joining me on the Performance Delivered podcast, and sharing your knowledge on what size influencers should companies work with. Now if people want to find out more about you, about gen.video, how can they get in touch?Bill: Very, very easily. So the name of the company is the website. It is literally gen.video is the website. And of course, we drop the dot when we say the name. So gen video, but it's gen.video is the website. And to reach me, it's super easy. It's just Bill@gen.video. And I look forward to speaking to any of your listeners and hearing follow up questions or engaging in any kind of conversation. And by the way, I'd love to hear how wrong I am about micros and nanos. And how great they can be. I think of myself as a lifetime learner and absolutely, you know, open to being wrong, and also as a believer in the philosophy that things change. So you know what you learned today is powerful for me tomorrow.Steffen: Thank you so much. Now, as always, we'll leave that information in the show notes. Thanks, everyone for listening. If you like the Performance Delivered podcast, please subscribe to us and leave us a review on iTunes or your favorite podcast application. If you want to find out more about Symphonic Digital, you can visit us at symphonicdigital.com or follow us on Twitter at Symphonic HQ. Thanks again and see you next time.Voiceover: Performance Delivered is sponsored by Symphonic Digital. Discover audience-focused and data-driven digital marketing solutions for small and medium businesses at symphonicdigital.com.
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