Canadian Retailer Magazine | Marketing & Merchandising

Word-of-mouth redefined

June 17, 2017
Word-of-mouth redefined

How influencers are transforming the world of marketing, and how savvy retailers are joining the conversation

BY JESSE DONALDSON

WORD-OF-MOUTH has always been an essential part of the world of retail.

In the newspaper age, coupons provided an avenue for neighbours to discuss deals and savings. With the advent of radio and television, celebrity endorsements gave a human face to companies eager to connect. But with the explosive growth of the internet, in a world where Canadians view approximately 480 online articles per month, but only 18 per cent engage with companies on social media, where 47 per cent of the population uses ad blockers and a paltry 3 per cent of retail sales come from e-commerce platforms, what’s the best way for today’s retailers to increase brand awareness, drive conversion, and have their message heard?

Enter Influencer Marketing—leveraging people with large social media followings to present brand-associated content that’s authentic, honest, meaningful, cost-effective, and inobtrusive.

“Influencer Marketing is basically the most scalable version of word-of-mouth,” explains Joe Gagliese, Cofounder and a Managing Partner of Viral Nation, one of North America’s largest Influencer Marketing agencies. “Influencers give a brand the ability to tell a story through the lens of someone that people trust, instead of it coming from the brand. And that’s a big difference. Think about it: when your buddy goes and sees a really great movie, and he calls you and raves about it, you’re way more likely to go than if Warner Brothers said: ‘Go check out this blockbuster’.”

“We all have bullshit detectors when it comes to companies talking about themselves,” adds Tom Yawney, Director of Business Development at Influence Agency. “We just feel like they’re trying to sell us things, versus humans that are genuinely talking about their experiences. It’s much more interesting, it’s much more captivating, and it’s much more entertaining.”

Talk is (literally) cheap

Despite being a relatively new phenomenon, Influencers are seemingly everywhere, spread across platforms such as Facebook, Instagram, and Twitter; according to a recent report by the Globe and Mail, there are more than 100,000 active in Canada, as part of an industry that brings in roughly $1 billion per year. A study conducted by Influencer services company Tomoson reported that Influencer Marketing has been rated the fastest-growing online customer-acquisition channel by their users—even more than email marketing, and either paid or organic search. And overall, engagement with Influencers is substantially higher than with traditional media—particularly amongst the Millennial and Gen-Z cohort, who tend to value authenticity above all else.

According to a recent Google study, the average Youtube star already gets 3-times as many views and 12-times as many comments as a traditional celebrity does, and 4 in 10 Millennials say that their favourite content creators understand them better than their friends do. That level of engagement goes for other platforms, too; data gathered by Twitter shows that 40 per cent of its users have made a purchase as a result of a Tweet from an Influencer.

“We’re seeing statistics showing that Canadian consumers trust an Influencer over traditional media,” notes Tiffany Heimpel, Managing Director of Influencer Marketing platform IZEA Canada. “Canadians in particular rank social media, Influencers, and content marketing as highly as film or television. Everything else—radio, print, etc.—falls well below.”

“INFLUENCERS GIVE A BRAND THE ABILITY TO TELL A STORY THROUGH THE LENS OF SOMEONE THAT PEOPLE TRUST, INSTEAD OF IT COMING FROM THE BRAND. AND THAT’S A BIG DIFFERENCE. THINK ABOUT IT: WHEN YOUR BUDDY GOES AND SEES A REALLY GREAT MOVIE, AND HE CALLS YOU AND RAVES ABOUT IT, YOU’RE WAY MORE LIKELY TO GO THAN IF WARNER BROTHERS SAID: ‘GO CHECK OUT THIS BLOCKBUSTER’.”

JOE GAGLIESE
Viral Nation

And Influencer Marketing has benefits beyond just its reach. It’s cost-effective and provides a substantial ROI (according to the Tomoson study, it brings in approximately $6.50 for every $1 spent), making it an attractive addition to the marketing mix —particularly for small and midsized retailers.

“It’s really a no-brainer, because Influencer Marketing provides you with production and distribution,” Yawney explains. “Normally, a retailer would have to pay a photographer or a videographer to come to their location and shoot the creative. Then you’d have to pay to get that out into the world—advertising on Youtube or Facebook, or TV, or whatever. And Influencers produce that content for you, and then they distribute that to their communities. It’s two birds with one stone.”

THE INFLUENCER IMPACT

100,000+

Number of active Influencers operating in Canada.

$1-billion

The amount of money the Influencer industry brings in each year.

3x

The amount of views the average Youtuber receives compared to traditional celebrities. They receive 12-times as many comments.

4 in 10

The number of Millennials who say that their favourite content creators on Youtube understand them better than their friends do.

40%

Percentage of Twitter users who have made a purchase as a result of a Tweet from an Influencer.

$6.50

The estimated amount of money Influencer Marketing brings in for every $1 spent.

92%

Percentage of marketers still trying to understand “which social tactics are most effective”.

90%

Percentage of marketers who still don’t know “how to best connect with people” (90%).

‘A real game-changer’

The other main strength of Influencer campaigns is their versatility. They can involve video, photo, or text content, spread across a variety of platforms, from people in all walks of life—from tech, to beauty, to parenting. And while those on the top-end can command up to $200 for a single tweet, even Influencers with smaller followings—known as “Microinfluencers” can have an impact all their own.

“Once upon a time, an Influencer had to be a ‘celebrity’,” Heimpel says. “Now, you could be an Influencer—even with 200 or 300 followers. Or you can be part of a larger campaign. Businesses can leverage 100 people with 300 followers each. Suddenly you’re reaching 30,000 people. It makes a lot of sense.”

“At our agency, we’d say 10,000 Followers is generally the threshold where we start to say ‘Okay, you can move the needle for brands or businesses,” Yawney adds. “But what if you’re in the middle of Saskatchewan? If you have 5,000 followers in Saskatoon, that might actually have more of an impact than having 50,000 in Toronto.”

“THE BRAND SAFETY COMPONENT IS REALLY IMPORTANT. JUST MAKE SURE YOU UNDERSTAND THAT THE PERSON YOU’RE WORKING WITH IS A REALLY GOOD FIT, AND THAT THEY’RE NOT GOING TO POST CONTENT THAT MIGHT RUN CONTRARY TO WHAT YOU STAND FOR. IT WORKS VERY WELL IF IT’S DONE STRATEGICALLY. IF IT ISN’T, IT COMES OFF AS DISINGENUOUS. AND THEN IT HAS THE OPPOSITE EFFECT.”

TOM YAWNEY
Influence Agency

All of that said, there are definite challenges facing any retailer considering an Influencer Marketing campaign. According to a 2016 Social Media Examiner report, many marketers are still wrestling with basic questions, including “which social tactics are most effective” (92%), and “how to best connect with people” (90%). As of 2016, consumer confidence in bloggers specifically dropped, and changes to Canadian Advertising Standards (requiring that Influencers disclose sponsored content), have required Influencers to change some aspects of their online behaviour. Generally speaking, Canadian businesses are behind their U.S. counterparts when it comes to digital marketing—and Influencers are no different. There are, Gagliese notes, virtually no Canadian Influencers with strictly Canadian audiences, and those who achieve success inevitably migrate south of the border, where both money and audiences are in abundance.

Understand the Influencer

For Canadian retailers hoping to embark on an Influencer Marketing campaign of their own, getting a sense of an Influencer’s audience is crucial—age, gender, location, etc.—as well as ensuring that the Influencers with whom they align themselves reflect their brand’s values.

“The brand safety component is really important,” Yawney warns. “Just make sure you understand that the person you’re working with is a really good fit, and that they’re not going to post content that might run contrary to what you stand for. It works very well if it’s done strategically. If it isn’t, it comes off as disingenuous. And then it has the opposite effect.”

And more importantly, Gagliese adds, relying on Influencer Marketing alone can be a dicey proposition, particularly for businesses working with a smaller budget.

“Influencer Marketing is great, it works, it’s solid, but you need to build a foundation around it,” he explains. “Without that, it’s not as impactful. We’ve spent the past two years building out that foundation—from social management and content creation all the way to digital and media buying to support that. I think that’s where the whole thing is going.”

However, nobody expects Influencer Marketing to disappear anytime soon. Rather, they predict the phenomenon will continue to grow and specialize, finding its niche within the overall marketing mix, and redefining word-of-mouth well into the decades ahead.

“I don’t think we’re even close to critical mass,” Yawney concludes. “A lot of businesses in Canada are just dipping their toes in the water. A lot of the people we work with, we’re executing campaigns for them for the first time. People know about it, they’re interested in it, and they’re trying to figure out how to do it. At the end of the day, now that we live in a world where information is free-flowing worldwide, and in real-time, it’s a real game-changer.”

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