MEET THE NEW MAD MEN
EVERY DAY, HUNDREDS OF YOUNG PEOPLE APPLY TO INFLUENCER MARKETING AGENCIES TO BE AN INFLUENCER. JONATHAN DAVIDS AND FELIX LAHAYE ARE ASSESSING THEIR PROFILES AND BROKERING RELATIONSHIPS BETWEEN THESE INFLUENCERS AND THE BRANDS THAT ARE BUYING THEIR KLOUT.
INTERVIEW WITH JOHNATHAN DAVIDS
CEO and Founder of Influcity
Hiring social-media-popular teen and millenial content creators to advertise and sell products is transforming the world of advertising and marketing. Beyond this transformation, it’s redefining what advertising is and the companies that compete in this space.
This isn’t just a matter of the advertising industry creating a new channel as part of their advertising arsenal. What’s revolutionary is the audience is now the seller. Yes, we’ve always had testimonials - think Dyson vacuums – and celebrity marketing - Kanye with his "Red October" Nike Air Yeezy IIs. But this is different. While it’s true the influencer phenomenon is happening across a range of categories and age groups, the majority of influence is very definitely targeted at the Gen Z and Millennial consumer. So it’s kids selling to kids, teens selling to teens and Millennials selling to everyone.
Importantly, hiring young people to be paid influencers raises a host of ethical questions, such as who is protecting the kids, what policies exist to protect youth working in this space, what contract terms are youth being asked to sign. See #askingthehardquestions
Youth are always at the head of the cultural curve and as YouTube passionistas, Viners and Instagrammers they have a front row seat to this emerging trend. According to Felix La Haye, Partner at Instabrand - one of the early influencer marketing agencies, his company gets 100 -200 applications a DAY from young people wanting to be influencers. Some of them have monthly pay cheques of a few hundred dollars, others hundreds of thousands of dollars.
From a business perspective, these new tactics allow a level of precision targeting that has brands salivating. Influencer marketing allows advertisers to infiltrate a narrowly defined social community that may be talking about eyeliner, glitter glue or hair volume and they can use one of those content creators to sell the entire community a product. That influencer may have 10,000 followers and be a relative lightweight when it comes to industry “KPI’s” of message amplification, engagement and sway. Or, they may have hundreds of thousands of followers, and carry considerable status and purchase clout, challenging stone-age advertising “amplification” tools like the TV commercial, billboard or magazine ad.
Targeting an audience using the social connectivity of an influencer is brilliantly efficient. According to Influencer Marketing expert, Felix LaHaye, if you’re already following an influencer’s news feed, you’ve already “bought in”. The audience is self-directed. They’ve elected to follow the influencer in question, so they’re primed for that message on a favourite shoe brand or makeup foundation. It’s kind of a slam-dunk that this audience is message-receptive, as long as the influencer sticks to the script and recommends products that line up with their brand.
The times they are a changing.
The kidsmediacentre spoke to two industry mavericks about the business of Influencer Marketing.
Jonathan Davids is the CEO and Founder of Influicity, a Toronto based marketplace that connects advertisers and publishers (YouTube, Instagram, Pinterest) with social media influencers - to create advertising programs. (interview videos above).
Felix LaHaye is the cofounder of Los Angeles based InstaBrand, a leading Influencer Marketing Platform built around a core network of influencers, trend-setters and bloggers. Instabrand builds high visibility, organic campaigns for advertisers and brands on mobile native digital platforms (Instagram, Vine, Snapchat...).
Johnathan Davids Interview Transcript - here
Q & A with Felix LAHaye
What’s the history and focus of InstaBrand?
We’ve been operating in LA for 4 years. InstaBrand was one of first companies to focus on mobile influencer marketing – and we’re probably the largest to specialize in mobile. Our focus is on mobile native social platforms: Instagram, Vine, Snapchat. We’re also on Twitter, Facebook, which we call the legacy platforms.
We’re in the business of interest-based targeting - understanding audience based on location, interests, etc. If you’re trying to find scholarly research on this good luck! The evidence changes every 4-5 months!
Explain Interest based advertising….
All our advertising aligns with interests of users and is based on who you follow, so it’s very precise and not disruptive, unlike traditional advertising. Media consumption is disturbed with the traditional model – even on YouTube with pre-roll.
What is an MCN?
It’s more for YouTube and uses data from profile-based or browser-based targeting.What we do is different. The pure native aspect of the advertising is the best feature -- the only ads that are showing up are ones of interest to the user so it totally blends in, as opposed to on YouTube where it’s interruptive.
We create purely native integrated today so Abercrombie, Levi’s content fits in perfectly with whatever they’re (the community) is already talking about. We also do it in their own voice using influencers they are interested in. In fact, consumers are happy to be advertised to if it’s a really great piece of content by someone they already like.
Do you get blowback?
We get blowback when we don’t do our job right -- and we get it INSTANTLY. Younger demographics are more likely to complain than older, who have a better understanding of how advertising works. We rarely get blowback on Fortune500 ads; it’s mostly harder-to-market or less well known products that get it, as users feel it’s being pushed on them as opposed to being something they’re interested in. They key is when you disrupt their consumer experience it’s a risk, so we don’t; it’s integrated and has to be done in a calculated, precise way.
Small companies often get a bad name through marketing apps because they are the most difficult to market and you really need know how to do it.
What is your personal and company history?
I worked in the music industry - as a musician! I also worked in mergers and acquisitions and have a Masters in Economics. At first, I focused more on the talent side while my two other partners focused on the creative and brand sides of the business.
We believe we bought the first-ever paid for post. At the start, we had a friend with a following and we offered him $20 to post on his 80,000 follower page.
Now, four years later we have 100-200 individuals who sign up at InstaBrand every day. We used to do small brand activations, now we work with big companies, media buying agencies, Fortune 500 brands. We work with advertising agencies, PR companies, creative agencies and we also work with celebrities, athletes, models.
Is this need to turn yourself into a brand being forced onto a generation of youth because of the state of the economy? How do we explain this phenomenon? Is this an extension of the “Uber” or precarious economy?
Influencer Supply/ Demand Equation
I don’t think so. I think it’s a case of supply and demand. There are always people trying to advertise. I think this is just an example of a new market developing the Uber economy. People are always willing to create, and now that people are aware that it can be monetized it has blown up. I don’t think it’s driven by financial need, just their desire to create something. I’ve met hundreds of influencers in my job and they’ve never struck me as doing it for the money. It’s rarely out of need or a conscious effort to monetize.
Before Instagram there was the stone age and the Blogosphere and you had people like Chiara Ferragni (http://www.theblondesalad.com/about) – she’s called the Blonde Salad. She and the other original bloggers really helped open up a category.
Today we have 80,000 Influencers. So there is interest out there.
Is the Industry changing? I’ve heard MCN’s are in a state of transition
MCNs are having trouble holding on to top-tier talent – there’s no motivation to give up a big percentage of your earnings when you can make it on your own. For influencers it’s hard to give up 40% of revenue when micro tools exist to create your own MCN.
The goal for InstaBrand is to reach a point where influencer marketing is a line item in every marketer’s brand budget, so television, magazine, display and influencers.
What we focus on is to progressively, be more of a tech company. Our company has taken a very Darwinian approach, systematically refining our systems to stay on top of the curve, and we want to market more of our own goods – we want to execute more of our own campaigns. We’ve built more of our own technology and tech teams to prove these influencers are working so we can be more and more precise. We’ve evolved with demand. We really are a perfect mix and balance of qualitative and quantitative.
The data that we use in our campaigns doesn’t just target based on who the viewer is, but on what they are interested in. They might not even watch people who align with their demographic. Influencer marketing is still new and experimental for a lot of companies, and we aim to bring that expertise to our clients to lead them to smarter decisions.
What are the key metrics for success with Influencer Marketing?
Key metrics? That’s difficult because each campaign has it’s own KPIs -- but for us it’s really about precision marketing. I’d say:
- Driving in-app conversions (the influencer influences the follower to visit the client) so sending the consumer to client ‘s page
- Generate quality, visually pleasing content for brand through the influencer’s page
- Create strong media value, and brand recognition
There is a young woman we know who applied to be one of your influencers. She spent many months working hard to grow her Instagram, organically, to qualify as an Influencer. Her phone hasn’t been ringing. Can you suggest why that might be?
Well, commenting in general terms -- anyone who starts now is a latecomer. Bloggers already have a strong hold on the fashion and beauty market. To make it you need to really stand out.
Every influencer needs to stop and think- why would they hire me? Why would InstaBrand pay me for this campaign over anyone else? It should be obvious where you fit. ….food, fashion, travel, glamour, etc. You have to pick your vertical and stick to it.
How strong is your vertical? The minimum to be considered to work for us is 10,000 followers and 1000 likes per picture, but that’s the minimum. If you meet this and are in a very niche market, you will have a good shot. If you have a broader vertical, you need a lot more followers in order to stand out for a brand. For a campaign, we may start with 500 and then narrow to 50, and then filter from there. You’d better stand out.
Lots of people have unrealistic expectations. Make sure you do something good. Some people enter into it to make a living without any idea of whether their content is any good or has any potential. Lots of followers will only get you so far. Make sure it appeals to your audience.
Are young people being misled on their chances for success?
Well first, to protect yourself, work with reputable established companies - they have no incentive to take advantage of you. These are not always necessarily better paying, but they’re better for your career longevity. Also, make sure to properly research any “influencer marketing” company, as a bunch of new ones start up every day, but most of those are run by people with very little market knowledge.
A small influencer can be more valuable than a big one if used correctly- and if they’re of sufficient quality.
There IS work, but people need to be realistic in their expectations. Every Uber cab I get into these days is driven by an actor. Everyone wants to be a star. …the next Ryan Gosling! The same is happening here. Be realistic.
An influencer can make hundreds of thousands a month (a handful), smaller influencers can make a few hundred a month -- there’s really no average.
Always be FTC compliant. We don’t want any legal issues arising - our campaigns always follow FTC guidelines. We make sure every time.
There are standard codes and terms for contracts and we are very reputable. We have direct agreements with parents when we work with anyone under 18.
One of our best influencers is a 5-year-old. We work with him and his parents, and he is primarily followed by moms. Not a lot of campaigns for him, but certain ones are right in his niche -- kids fashion brands, branches of regular fashion brands. As long as it’s managed properly it’s no different from modelling.
Advice for your student (looking at her Instagram)
- She has no obvious vertical.
- Limited opportunities for bikini models, her bathing suit shots say that’s where she wants to be.
- Do something good – find a category and stick to it and think about your brand DNA.
- The quality of her photos has increased, but she won’t get a Fortune500 company to hire her, until she steps up to the next level, and those are the contracts that are best for your career longevity.
Does privacy matter to influencers? Does influence, fame, monetization trump digital "footprint"?
Of course privacy matters to most influencers. However, there are different “levels” of what people are willing to share. Most professional talent have strong limits in what they will share and what they will not; their pages are usually a reflection of a certain aspect of their life that they feel is relevant to their audience, rather than a full snap shot on everything that is going in their daily lives.