Some New Zealand social media influencers are making several thousand dollars per post. But whether their ‘influence’ on your brand actually increases sales is ambiguous, research says.
An influencer needs at least 1,000 Instagram followers to start making money from their profile, and on the low end they could be eligible to start making $50 per post.
Once reaching around 4,000 followers that price per post could earn them up to $400, and that could increase to thousands of dollars per post once increasing their following into the tens of thousands.
Young influencers are reaping the rewards such as one 21-year-old Aucklander, who wished to remain anonymous, who was paid up to $400 for a single Instagram post, even though she has just under 4,000 followers.
“I was first reached out to by a PR company who had found me through Instagram and began by sending me free products, to put on my story.
“I just got the products in return, but then I got sick of all the stuff they began sending me without being asked, so eventually I told them to refrain and I would only do paid partnerships,” she said.
“Then they began to reach out to me with briefs from bigger brands who obviously had larger budgets to work with. The first time, I charged $150 for a single post and each time I began asking for more (I was a poor university student at the time.)
“When I stopped doing it I was being paid $400 for a single post and sometimes a story as well but you can charge more for this. I think the last one I did I charged an extra $50-$75.
“I turned down a lot if they didn’t align with stuff I liked, or people could tell I was just being paid a lot to do it and I wouldn’t actually use or wear the product.
“I stopped when I got a professional job because there’s this view of influencing as kind of embarrassing… the whole ‘ohhhh you’re an influencer’ attracts a view of people thinking it’s not a proper job etc.
“A few of my friends make a killing of a living from it though and they just embrace it and run with it.”
A study undertaken by MoneyHub said influencer marketing “attracts a lot of media coverage, but measuring a return on investment can be almost impossible”.
For their research, they looked at 40 New Zealand influencers, between 1 August and 31 October 2018, and the power they had to impact a purchase decision.
The New Zealanders that had the most power correlated to having a presence in Hollywood, such as KJ Apa who boasts over 14 million followers and Taika Waititi with 681,000 followers.
Apa and Waititi had the highest social engagement per post (measured by likes), with an average of 12.80% and 12.73% respectively, however the average New Zealand company would not usually be hiring these two celebrities as influencers.
Influencer marketing agency, The Social Club, say they have over 9,000 influencers within their community across New Zealand and Australia.
“We get an average of 180 signups to our platform per week and our approval rate is around 60% after they have been vetted,” CEO and Co-founder Georgia McGillivray said.
“They are vetted on things like engagement rate, reach, content and fake followers.”
Fake followers are dummy accounts set up to artificially inflate follower numbers.
“Many influencers have a very niche audience, for example gaming influencers or vegan bakers, who would only have a strong influence over decisions within this niche,” McGillivray said.
Businesses that benefit the most from influencer marketing are B2C (business to consumer) companies who are targeting a young audience of under 40 year olds, The Social Club CEO said.
FMCG businesses targeting entertainment, travel, health, fitness, auto, beauty and fashion have been the industries McGillivray has seen have the most success.
The average spend on each on each influencer campaign is 30% of each client’s monthly digital marketing budget, while new brands have been spending an even higher percentage.
Aleph Beauty, which is a natural, vegan, cruelty-free makeup brand made in New Zealand, has just over 2,900 followers on Instagram and has been using influencers.
Founder of Aleph Beauty, Emma Peters, says that their influencers provide them with useful feedback and have become their biggest advocates, but they don’t rely on that form of marketing alone.
“It needs to complement other marketing strategies for it to be most effective.
“It has been an effective way of growing our brand awareness though and we will continue working with a handful of influencers who have been genuine fans from the beginning,” Peters said.
MoneyHub observed that small businesses and startups need to challenge the ROI before being sold on social media influencing spending though.
“While big businesses can afford to lose money on a few unquantifiable sponsored posts pushing a cola or hair product, not every business could,” their report wrote.
The Social Club says ROI is calculated in a number of different ways but one of the most effective is using a unique discount code for e-commerce campaigns. From the code, they can directly measure ROI by the number of sales converted which included the code, versus the amount spent on the campaign.
For example, if a brand spent $10,000 and had $80,000 in sales using the discount code, the ROI would be 700%.
Influencer marketing companies have also been using technological processes to spot fraudulent activities such as ‘fake followers’ that could effect data.
“Goals and KPIs for other direct response campaigns can include app downloads, competition entries and data collection, where the key metric is CPA (cost per acquisition),” CEO McGillivray said, who believes the influencer market’s growth is definitely not slowing down.
“Over the next few years we are expecting the industry to continue to develop and change, including potentially AI or VR influencers. We don’t see influencer marketing ever disappearing,” she added.