I was reading this article from eMarketer about influencer marketing, and I was attempting to wrap my head around how a small business might utilize such a tool to help promote their business. The article was primarily about disclosure, but I have been getting these kinds of questions periodically, about whether an influencer strategy makes sense.
To the point made in the article, this is a pretty prevalent tool for industries such as fashion, beauty, and gaming products. Let’s be a bit authentic about this, however. Influencer marketing is really no different than Matthew McConaughey endorsing Lincoln or Keanu Reeves’ rather disturbing endorsement of Squarespace, except that it is in the social spaces. The other difference is that it is crystal clear that those are paid endorsements. Endorsements have been around for decades, dating back to the days of radio. (For those of you not familiar with radio here in the United States, I’ll direct you to some basics on Wikipedia.) And the way influencer marketing works is essentially the same concept.
However, influencer marketing is not quite that simple. In many cases, as reflected in the report from eMarketer, disclosure from the influencer that they are paid to promote the product or service is not always occurring. The other aspect is that there appears to be increasing evidence that paid endorsements do not have the same appeal they did as recently as 10 years ago, but I feel the jury is still out on that. When it comes to small business, should an influencer strategy be included in a marketing plan?
Influencer Marketing – For Small Business?
From a small business perspective, influencer marketing, particularly in a small area, is very likely a red herring. Here are the four reasons why I believe influencer marketing for small businesses make almost no sense:
- ROMI – Return on Marketing Investment. I talk about ROMI in this article, and I still feel it should be the measure by which marketing efforts are evaluated. If you can identify and engage an influencer to promote your product, you had better be certain it is an influencer that will be able to move the needle with your audience. So do your homework (see #2).
- Research. The problem with small businesses is that aside from the obvious challenges of cash flow and market conditions, they simply do not have the research capabilities the big companies do. With that in mind, a small business owner would need to identify and research their audience carefully to be certain that the chosen influencer had enough connections to the relevant market (both geographically AND psychographically) to have an impact. Maybe in a big market, but not Small Town, USA.
- Backlash. Consumers today can be pretty fickle. Actually, that’s been true for quite a while. And the tolerance for endorsements is not the same as it was. There is risk there, and only you can determine if the ROMI is likely to overcome any potential rejection.
- Regulation. It is not here yet, but I have this sense that it is on the way. In order to maintain some truth in advertising standards, I suspect the FTC may be more aggressive in the future in this area. (see this example of the FTC’s position here.)
Ultimately, it is up to the small business owner to decide if the reward is far greater than the inherent risks. Right now, I don’t see it except in special circumstances. There are far greater social and digital promotion strategies out there that can yield much better outcomes with far greater efficiency.
Check out the article and the reports on eMarketer:
https://www.emarketer.com/content/why-disclosure-is-essential-when-it-comes-to-influencer-marketing
This article first appeared at robertgriffin.net in March of 2018. it is republished here, with minor edits to improve clarity or accuracy.
Pragmatic 
