TDLR —Web 3.0 Is Replacing Transactions with Connections
The advent of B2C advertising began in newspapers, slowly moving its way through billboards, radio, television, website, and now social media. However, the one thing that was held constant is that these advertising platforms share a “feed-dynamic” monetization strategy — inserting and feeding an ad that barely has anything to do with the content to raise awareness or sell a product.
Why Influencer Marketing?
The traditional advertising channels are fundamentally flawed because structurally they are not created to deliver value to the audience but to extract value (attention) from them. In the 1920s, a historian named Harold Lasswell came up with the Hypodermic Needle Theory stating that mass media has absolute influence over how people behave, especially during World War II where media extensively portrayed nationalism ideologies. Even if that held back then, there is no doubt that modern communication is much more social and informational. Purchasing decisions are made through opinions from somebody else, rather than a random advertisement, which had paved the pathway for influencer marketing.
There has been growing distrust against in-stream and pop-up ads because they are seemingly ruining user experience on the social platform. According to eMarketer, the clicks on paid display advertising have crashed to an average of 0.47%, which implied only 47 people get converted for every 10,000 screens. According to Statista, over 50% of German citizens use an Ad-Blocker on their web browser. It is evident that while social media advertising has a lot of great benefits such as precision targeting, minimal budget requirement and analytics services, they lack the authenticity to capture the audience’s attention in the first place.
In addition, organic content strategy is always being discussed as an alternative way to market a brand. However, it is very hard to execute from a corporate standpoint. For content made available on the website, there are going to be compliance, strategic, legal hurdles to overcome. It must align with the company’s mission, leadership stance, information accuracy, etc. Most importantly, often a corporate marketing manager will not be good at creating content as a creator who does it full-time, therefore influencer marketing is much better received and adopted by companies than organic content strategy.
One of the earliest successes with influencer marketing is Amazon Affiliated Program, where rewards people willing to market Amazon products on their behalf. If people click through to Amazon and buy something, the Amazon affiliate will receive a proportion of the sale as an advertising commission. The rate varies by product but is up to 10%. The program succeeded because it did challenge the status quo and served as the perfect testimonial that people are informed by people, not ideas.
Case Studies
The upside of influencer marketing is infinite, especially in the long term. Here are a few successful examples where influencer marketing campaigns made sense for both parties:
Hyundai’s Partnership with Peter McKinnon
In December 2020, Hyundai launched a festive automotive campaign for its new Sonata model with Youtuber Peter Mckinnon in a cross-channel format. It was available online, in print and on digital billboards nationwide, including Montreal, Vancouver and in the heart of Dundas Square in Toronto.
Peter McKinnon took this opportunity to create a video named “Just a Youtuber” to advocate for the lack of recognition society places on Youtuber. The video has now received 1.2 million views with 100,000 likes, at a 9% engagement level. Despite it being unclear about how much sales were converted because of Peter McKinnon’s video, however, Peter McKinnon’s followers now associate Hyundai much more positively than their competitors.
Furthermore, Hyundai has already shared a partner relationship with Peter McKinnon since 2018 where Hyundai was promoting their “B-Roll Challenge” social contest. Back then Peter McKinnon had less than 1 million followers, and this was an absolute win for Hyundai because they have found the right influencer and maintained the relationship over time.
2. Verb Energy’s Distribution Through Lifestyle Influencers
Verb Energy is a gluten-free dairy-free vegan energy bar company that is super customer-oriented. They have introduced a starter kit for beginners, a gifting option for holiday purposes, a subscription option for recurring purchases, etc. Most importantly their relationship with lifestyle creators is what differentiates them the most.
They have partnered with numerous creators including Ashley (@ur mom Ashley), Evelyn (@evelyn ha) to promote their brand. Both creators have spent 60 seconds introducing the product to their audience and Verb Energy even gave their audience a discount link to purchase 4 energy bars of different flavours for $0.95 + Shipping.
Without these influencer campaigns, Verb Energy’s loss marketing strategy is not going to work because they will end up attracting a bunch of value-driven customers, not those targeted demographics who are going to stick around.
3. SeatGeek’s Sponsoring David Dobrik Teslas
The SeatGeek partnership with David Dobrik is going to be one of the early successes for influencer campaigns. SeatGeek has built a significant relationship with David Dobrik, funding 22 videos where he gave away 12 Teslas, tickets to World Series and Super Bowl, and paid off his friend’s college tuition — clocking in 150 MILLION VIEWS.
Similar partnerships have formed afterwards included MrBeast’s partnerships with Honey and Current where MrBeast gave away most of the money to the audience. This partnership model is set to create videos with very high barriers to entry — because these videos are emotion and capital-intensive.
More partnerships include Storyblock’s partnership with Colin & Samir, G-Fuel’s partnership with Pewdiepie, dbrand’s partnership with Marques Brownlee, etc. Brand integrations in the future will be more aligned to the channels and sponsorships will not only be available for macro-influencers but the small-medium sized channels as well.
After Thoughts
The Future of Advertising is going to be…..
1. The Future of Advertising is Going To Be Relationship-Based
The future of advertising is all about replacing transactions with connections. Today, there are way too many noises on the internet, and people are annoyed with how many people are hard-selling their products on the internet. One thing that influencers do well-building build and interact with their audience to build trust and emotional connections. Therefore, the future of marketing will no longer be limited by in-stream ads, but endorsements that come in different forms. (brand-integration on Youtube video, tweet, Instagram stories, Twitch live stream, etc)
2. The Future of Advertising is Going To Be Partnership-Based
Furthermore, influencer marketing requires brands to collaborate with creators which have introduced a reputational risk for the creators. Going forward, brand collaborations will take place in longer forms (multiple videos over multiple months) rather than a one-time video collaboration.
The phenomenon is emerging because:
a) Brand alignment is very hard to achieve so brands want to collaborate with the influencer long enough to raise sufficient awareness from their followers
b) Creators can obtain greater financial security by signing contracts for a longer period, and not having to worry about polluting their channels with multiple sponsors
3. The Future of Advertising is Going To Be Community-Focused
Traditionally, marketing budgets are sliced up by platforms like Youtube, Facebook, Linkedin, Snapchat. On the contrary, now it is going to be sliced up by influencer campaigns, where we create campaigns like ‘Influencer 1’, ‘Influencer 2’, ‘Influencer 3’. Each influencer campaign will likely be cross-platforms, and brands would have to be cautious about their measurements for success.
