Let Opinion Leaders Advertise for You

Influencers have been around for as long as there have been markets. What is an influencer? An expert or celebrity that has access to a particular target group, and has the ability to affect their opinions and potentially even their actions.

Experts in particular can have an enormous influence on consumers. If a trusted professional recommends a specific brand of washing machine, or advises against buying a particular stock, it typically has a direct impact on consumers’ perception, and often on their actions. However, until several years ago, the reach of experts was generally limited to their own circle of acquaintances. This changed with the emergence of Web 2.0.

Since the mid-nineties, anyone can theoretically publish anything online and reach readers worldwide without having to learn code.

Bloggers were the first private opinion leaders on the Web; influencers - although this term had not yet been coined. Depending on the industry, their comments sometimes carried more and sometimes less weight. Thus, shortly after the turn of the century, particularly successful fashion bloggers already began sitting in the coveted first-row seats at fashion shows. The industry recognized the added value of bloggers and began having their PR experts collaborate with them. A new specialist field emerged: "blogger relations".

Starting a blog is so much easier than programming your own website. When the first social media platforms emerge in 2000 with Friendster and Myspace reaching friends and acquaintances with just a few clicks gets even more convenient.

Shortly afterwards Facebook and Twitter take the world by storm. It only takes a few years for nearly every Internet user to become a member of one of the big social networks. While you used to have to write at least one blog post to be heard, today a single tweet is all you need to turn that classical sender-receiver model upside down. The predominance of mass media is over. Every consumer gets a voice and those who don’t feel like writing can simply post a video blog (Vlog) – courtesy of YouTube. This video platform raises the curtain for even more Internet stars.

And again enterprises react. Their strategy this time: go where the consumers are. Brands start their own channels on the platforms. Social media teams form in companies to produce content and serve as a contact for the community.

Apple unveiled the first smartphone in 2007, transforming people's use of media the world over in subsequent years. The most amazing thing was that the iPhone rapidly began replacing the home PC. Suddenly, people could communicate with each other in real time, regardless of format or location. They could shoot a photo or video and send it around the world - all with the same small device.

The consequence of hundreds of millions of users: a literal explosion of so-called user-generated content. And instead of the daily newspaper, more and more people sit with their smartphone at the café or in the train. Instead of enjoying classic media as in the past, consumers prefer to spend their time sharing with friends and relying on social media to keep up with current events.

Since that time, media houses operate according to the maxim, "online first," in an attempt to recover lost readers. The problem is that until now few users have been willing to pay for content on the Web, forcing publishers to rely on advertising revenue. Companies are increasingly utilizing digital advertising channels to compensate for the loss in print media reach. But this is also rather unpopular among consumers - after all, who likes advertising banners on their smartphone?

The consequence: ad blockers. Consumers simply remove advertising from the Web pages they visit. It didn't take long for a solution to emerge: Companies began moving their online budgets from banner ads to content marketing. Suddenly, the focus is on topic management, and people are beginning to look at things from the point of view of the observer (consumer) rather than that of the broadcaster (company). A man leaps from the stratosphere onto the earth for an energy drink… time for every marketing professional to look a little more deeply into the subject.

Many companies are replacing their existing promotional-persuasive tone with an editorial-informative or entertaining approach. The goal: good search engine rankings. This enables them to target customers that traditional advertising no longer reaches. Even better, they achieve virality with hero content, e.g. content produced in such a way that the enthused consumers are inspired to voluntarily share it on social media.

The trouble with a successful new strategy: When more people begin to use it, it quickly loses its attraction as something new. And since the Web offers an infinite amount of space, there is constantly more content produced than customers are willing to consume.

An aggravating factor: Year for year, Google gives their AdWords advertisements more space, pushing the organic search results further and further down the page. Facebook is also optimizing their business model — these days, companies are only reaching a fraction of their fans with their Facebook page. The message is the same from all big online players: reach has its price.

While companies are dealing with content marketing and developing their own social media channels, a parallel world is emerging on YouTube: channels with nine-figure subscriber numbers.

Adolescents watch mesmerised as Pewdepie or Gronkh demonstrate new video games, and prefer to get their information on world affairs from LeFloid, rather than boring news broadcasts.

What makes YouTube stars different is that regardless of how popular they are, their fans always have the sense of being connected with them. They are approachable and respond to comments. This distinguishes them from the majority of movie stars or music artists.

In 2010, an additional platform expanded the social web. The photo-sharing app Instagram invites people to share photos - initially in square format. A concept that is well received. So much so, in fact, that Facebook added the online service to its portfolio in 2012. In August 2017, 15 million people were active on Instagram every month in Germany - and 700 million worldwide.

Instagram's success has bestowed influencer marketing with additional momentum. Any company that hopes to attract attention in this endless stream of images needs scroll-stopping content — and gladly resorts to influencers to achieve this.

Thanks to the network's reach, the better known among them have achieved instafame: they have broken the sonic barrier of a million contacts, and are accordingly much sought after by brands. Instead of videos on YouTube, they offer glimpses into their private lives via Instagram stories, thus binding followers to their channel.

Typically, they are also active on the instant messaging service Snapchat, where they can also place products. This additionally increases their desirability for brand manufacturers, who don't seem to be able to achieve the desired response on Snapchat with their own content. According to a study on Snapchat use in Germany conducted by Düsseldorf University, 81.8% of those surveyed are not following any companies on Snapchat, and only 1.4% follow more than five companies.

The first companies have adopted influencers as part of their marketing mix. Several companies are experimenting with various possible means of collaboration. For influencers, the high demand is on the one hand a windfall, while on the other hand it creates a need to carefully consider how much promotional content their own channel will tolerate. Credibility is a valuable commodity for influencers, hence the brand must be a match for the influencer's image. Depending on the particular influencer and advertiser, the professionalization may be more or less advanced.

Particularly the proper disclosure of advertising on influencer channels leads to discussion, since there are currently no universal guidelines in place. All that is clear is that some form of disclosure is necessary. The Celle Higher Regional Court fined the Rossman Company in August 2017, although the Instagram posts in question were labelled with “#ad”. The judge criticized the fact that the notice was placed between other hashtags and therefore did not represent sufficient disclosure of advertising content.

In addition, there are tax aspects to consider in collaborations with influencers.

With print media, it was complementary copies that artificially increased the circulation numbers. In the case of influencer marketing, fake followers, purchased interactions, and Instagram pods are all tricks used to produce artificial reach figures. Not all influencers have as large a community as they profess to have. This makes the choice of an appropriate collaboration partner that much more important.

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