Why you're wasting your influencer marketing budget

The video is one of the best-known experiments in psychology, completed at Harvard University several years ago. It involved individuals being asked to count the number of passes made by the people wearing white shirts. In the middle of the video, a gorilla appeared, beat its chest a few times and then walked off screen. When questioned about it, half of the participants who watched the video couldn’t recall seeing a gorilla at all. It was almost as though the gorilla was invisible.

This experiment revealed two things: that many of us miss a lot of what goes on around us, and that we have no idea that we are missing so much.

When it comes to influencer marketing, we can look at the basketball passes as the discussions surrounding CPM (cost per mille) - how many followers will your budget get you? If you purely focus on this, you’re doing yourself a disservice and ignoring not one, but two other gorillas. This, in effect, means you’re wasting your marketing budget.

So, what are you missing?

Gorilla 1 - You’re Reaching the Wrong People

The first thing you need to consider is your target audience and the demographic of the influencer. We actually built the world’s first audience demographic tool in early 2015, but even though tools like ours have existed for the past four years, a lot of brands still ignore them.

Look at it this way: you have a product that you can only dispatch to citizens living in the UK. The product is designed to be suitable for 20-30 year old females. So, in this case, your target audience is 20-30 year old women living in the UK. Now, your influencer may fit into this demographic perfectly, but what about their followers? If they are followed by men and women and have an international appeal, are they really the right person to promote your product? Yes, they may be able to get your product out in front of thousands of people, but if only 5% of their audience fits into your target demographic, you’re wasting your budget.

Gorilla 2 - You’re Unknowingly Choosing Low Performing Influencers

When choosing an influencer to work with, most brands purely look at how many followers they have. Sometimes they may consider the amount of engagement their posts receive as well, but really, these are just surface metrics. There’s a lot more data that should be taken into consideration; performance numbers for one.

Why should brands consider this? Because even if an influencer has 100,000 followers, there’s no guarantee that all 100,000 of those followers will actually see their posts.

So… How Big Are These Gorillas?

At Tailify, data is at the core of what we do (you can learn more about us here). So, with that in mind, we dug into the data of an influencer that has been part of multiple UK influencer campaigns already in 2019.

Case Study 1: John

For the sake of anonymity, we’ll refer to this influencer as “John”. John has 98k followers, and charges £800 for a sponsored post on Instagram. This means brands are buying him at a CPM of ~£8. Sounds good right? You may be surprised. When doing some research into John’s followers, we discovered that only 3% of them were based in the UK. So, out of the 98k followers he has, only 2940 are relevant for UK campaigns. Can you see now why Gorilla 1 is so important?

Furthermore, John is someone we at Tallify would define as a low performing influencer. By low performing we mean his follower-to-organic reach ratio (how many of the followers actually see his posts) is below average. On average, only around 12% of John’s followers see his posts. So, Gorilla number 2 isn’t exactly stacking up well either.

Let’s take another look at those figures. If only 12% of 2940 people are likely to see John’s post, only 352 relevant people will actually see the advertisement.

The effective CPM for this particular case is then £2,240, not £8.

This means that the brand has wasted 99.7% of their influencer spend on this influencer. You may as well just throw money out of the window or set it on fire. And, this isn’t even taking into account how many fake or paid followers John has.

This, unfortunately, is something we see every day, and it’s not necessarily the fault of the advertiser; sometimes, it’s something that just isn’t considered – like with the gorilla video.

Case Study 2: Tom

Let's compare John with another influencer; we’ll call him “Tom”. On the CPM surface, John looks like he is 50% cheaper than Tom. John looks like a bargain. Most brands would decide to work with John.

However, as you can see from the table above, John is actually 98x more expensive than Tom. Suddenly this “bargain” doesn't look quite so attractive.

So why are brands still choosing John over Tom?

The main reason is because brands aren’t aware that these gorillas even exist. But it also happens because many influencer campaigns are sold to brands by agencies who either

a) aren't vetting their influencers properly, or

b) are well aware that the influencer in question doesn’t offer good value for money, but they are ignoring this fact and not letting the client know about it.

However, brands are also swayed by the industry pushing them to buy influencers at lower CPMs. Clients are trying to maximise the amount of followers they will get for their budget without considering the data. This leads to them spending more than they need to in order to achieve their desired results.

As we saw in the case of John vs Tom, the client believed they were receiving a campaign that was 50% cheaper in CPM, but what they actually got was a 99% reduction in quality.

Conclusion

The influencer marketing industry is still young, so it is expected that brands will continue to experiment. And part of that experimenting is failing and learning from your mistakes. However, while failing was something that could be understood in 2015, we’re now in 2019. The data is there. The tools are there. The quality influencers are there. There’s no need to be wasting money with all of this information at your fingertips.

So, go for quality, not quantity, and stop wasting your budget. You deserve better.

Didrik Svendsen is the co-founder at Tailify.