By some estimates, annual spend on influencer marketing will surpass $10bn in the coming years, a reflection of the fact that more and more companies are pouring ever-increasing amounts of money into a digital channel that basically didn’t exist a decade ago.
But as businesses, especially small and mid-sized companies, consider jumping on the increasingly expensive influencer marketing bandwagon, risks abound and wise companies will make sure they are well-positioned to take advantage of what influencers offer.
Here are seven signs that your company isn’t ready to run influencer marketing campaigns.
You’re looking for overnight results
They don’t call them influencers for nothing, and it’s not hard to find media reports raving about the capabilities of influencers to drive significant sales with just a single post.
While those reports aren’t necessarily untrue, they make it easy to ignore the fact that influencers aren’t sales magicians. For every influencer post that results in tens or hundreds of thousands of dollars in sales — or more — within a 24-hour period, there are many more influencer posts that don’t achieve spectacular outcomes.
Companies that don’t recognize this and expect influencer marketing campaigns to deliver overnight riches are setting themselves up for failure.
You don’t have attribution figured out
Before launching an influencer marketing campaign, it is important to have a methodology in place for attribution. After all, if the ultimate goal of influencer marketing is to move the needle, companies need to be able to measure whether the needle actually moves and identify the sources of that movement.
Unfortunately, despite the fact that companies are now spending billions of dollars a year on influencer marketing campaigns, many still report struggling with attribution and fail to implement basic measures such as trackable URLs. In other words, they can’t reliably track the ROI of their campaigns.
For companies considering influencer marketing for the first time, it’s worth being aware that taking the plunge without having attribution infrastructure in place is likely a very bad idea.
You haven’t generated any organic buzz yet
Influencers can influence but there are limits to their capabilities. In some cases, a product might be so uncompelling that it can’t be sold successfully even by influencers with significant sway. In other cases, influencers are capable of moving products that will only disappoint, leading to backlash.
The best way to determine whether or not a product is influencer marketing-worthy is to see if buzz from real customers can be generated organically. Without even a small amount of organic buzz, companies can have no confidence that their product is ready for primetime.
Your customer experience hasn’t been optimized
In a best case scenario, influencers can drive loads of customers into your funnel but companies still need to get them through it. Without a customer experience that has been rigorously tested and optimized, influencer marketing can lead to a nightmare scenario in which a company generates significant demand but is unable to meet it, leaving potentially large amounts of revenue on the table.
What’s worse, such a scenario can tarnish a brand and lead to a large number of consumers being hesitant or unwilling to purchase from the brand in the future.
You’re not prepared to back campaigns with paid ad spend
One mistake companies make when planning influencer marketing campaigns is to take into consideration the dollars they realistically need to spend on paid ads.
Because social platforms like Instagram employ algorithms that limit organic reach, even the coolest content paired with popular influencers might not achieve as much reach as anticipated without a paid ad boost.
Not recognizing this can be very problematic. Small and mid-sized companies in particular can easily discover that they do not have enough budget to run viable campaigns when they assumed their only costs were content creation and influencer fees.
You haven’t honestly compared influencer marketing to other digital channels
The fees influencers demand continue to increase and when companies consider the all-in costs of campaigns, including the aforementioned costs of paid ads, many companies are likely to find that reasonable target ROI for their influencer marketing efforts is not nearly as high as anticipated.
In many cases, a lack of realistic target ROI will lead to malinvestment and misallocation of marketing dollars.
You’re thinking short-term and not prepared to invest long-term
While many companies have had success with influencer marketing campaigns, social platforms are fast-moving. Today’s hot post will see impressions fall off significantly tomorrow, and might be virtually forgotten in a week.
As a result, companies that aren’t prepared to invest in ongoing influencer marketing efforts are likely to find that any spike in sales is not sustained.
Long-term thinking opens the door to the best opportunities in influencer marketing, but can also introduce challenges. For instance, many top influencers expect to be collaborators, not just paid spokespeople, and some might even demand a piece of the pie. Partnership-style relationships are now common in a number of markets, such as beauty.