Driving performance via influencer marketing

As a consumer-tech investor at Blume Ventures, I often speak to founders who find it difficult to measure the performance of influencer videos effectively. While influencer marketing is a hard-to-measure channel, it is also increasingly becoming more important. Influencers have a captive audience following them for specific needs. For instance, people follow Tanmay Bhat to watch his vlogs or reaction videos and MKBHD/Geeky Ranjit to stay updated on tech, etc.

This allows companies to reach out to a very targeted audience. But how do we measure the results? Or budget for it? Is there a fixed budget that needs to be allocated for influencer marketing? In this primer, we’ll dive into these topics and more.

Some of these insights are derived from my time at Mosaic Wellness, where I used to drive revenue for their D2C platforms. I have also added anecdotes from conversations with folks running influencer marketing campaigns effectively. Shoutout to my ex-colleague Shraddha Mulky (currently leads influencer marketing and PR for Mosaic Wellness ), whose wisdom I’ve borrowed to understand a lot of this.

This primer would be effective if you are just starting your influencer marketing efforts or have not seen the desired outcomes from your efforts.

Let’s jump in and first learn more about the channels that exist.

Social Media Networks

Here’s a list of the most commonly used social media networks along with characteristics that help us determine how to run effective influencer marketing campaigns:

Classifying Influencers

Here’s a framework that I follow to categorize influencers & rough thoughts on each bucket:

1. # of followers

a. Micro & below – These creators have a “micro-community” of followers and have less than 100K followers. They might be effective, but if you want to distribute your message at scale, you will have to work with many simultaneously to get the required number of eyeballs.

b. Macro & Mega—Creators start getting more savvy at this scale. They have anywhere between 100K and a million followers. Some might even have agents and a better grip on their distribution metrics (impressions/ engagement).

c. Celebrities - These are bonafide celebrities managed by agents. They are great for driving awareness of your product but might not be effective if your product serves a small, loyal niche.

2. Content Type

a. National – The content is generic and appeals to the entire nation. It is usually delivered in Hindi or English.

b. Regional—The content is specific to a region and is usually delivered in that region’s language (for instance, Telugu, Punjabi, or Gujarati).

3. Content Category

a. Lifestyle + Vlogs – Creators make lifestyle videos covering various topics. Their content usually revolves around the latest events in their lives.

b. Thematic content – Made by creators whose audience expects them to be key opinion leaders in specific areas like makeup tips, fashion tips, tech tips, general knowledge, business, finance, food, nutrition, and health.

You can create multiple buckets, even though I recommend not going beyond this if you are just starting your influencer marketing efforts. With this framework, you can make a strategy for the types of creators you want to reach out to. But how do you find the right creators for your product?

Finding creators

There are three ways to go about this:

1. Find an agency and give them a mandate - A Google search for an “influencer marketing agency” will give you a list of agencies. Of course, tapping into your network and working with someone known is advisable. I recommend knowing your strategy very clearly concerning the number of impressions you want to get, the type of content that needs to be delivered, and the execution timeline for it.

2. Use influencer marketing tools - There are tools that provide influencer (or social media) analytics, like the type of content posted, # of followers, and engagement rate. A clearly defined strategy can help you narrow down the search. You can then directly reach out to the creators. Most creators provide email IDs on their bios, or YouTube page. You can also DM them, but that might not work with larger creators due to the sheer number of messages they get. Some tools: Wobb, One Impression, Influencer.in, Good Creator Co., Qoruz

3. Use brute force - Search for a topic of interest, like memes, news, or makeup, and go to the profiles of the creators whose content you like to find their contact details.

Now that you know the creators you want to partner with, you’d want to gauge their potential reach to have a fair idea of how many impressions your product will get.

Estimating Impressions

While you can ask the creators for the stats from their dashboards, you can also get a reasonable estimate of the number of impressions a creator can generate.

While most content properties now accurately tell you the number of impressions, you might want to guess the number of impressions served for Facebook, LinkedIn, and Instagram posts to do a back-of-the-napkin calculation on their reach before reaching out to the creators.

A good estimate of the number of views that content advertising your product will get can be taken from the average of the last 6-8 pieces of content released on the planned placement, such as YouTube videos and Facebook posts.

But if your objective is performance, you should also track link clicks received by the post. Instagram does not let users click on a link mentioned in a creator’s caption or reels. Links are clickable only in stories and bios. Therefore, the CTRs for influencer content on Instagram are low.

A 2x2 matrix that divides accurate estimation of impressions from previous posts and the platform’s willingness to take you out of the platform looks like this:

For this note, let us plan for platforms in the top right-hand quadrant—where we can accurately determine the number of impressions of their previous posts and where the platform allows users to visit advertiser websites directly from the posts.

Estimating video performance

Now, let’s run through a real-life example. Suppose you want to estimate the number of views Cleo Abram would get on her next video, you can look at the views of her past videos:

Of course, the number of views increases retrospectively as well but we’re trying to estimate, not derive an accurate conclusion with any scientific method. After looking at her videos’ performance, we can estimate that she is likely to get ~1.2M views. Anything on top of that is a bonus, and less than it is a risk that we have to live with.

If your plan involves working with, say, 10 creators, the total number of views will be similar to the sum of view count you’ll derive from individual creators’ averages. If you have worked with YouTube creators in the past and have a benchmark CTR, use the same. Else, assume the CTRs as 1.5%.

Considering 1.5% CTR and 1.2M views, we can estimate 18,000 clicks for your website. Now, the money Cleo Abram will charge completely depends on her. As an advertiser, your job is to figure out the maximum amount of money that you are willing to pay to get a click. Conversion of audience acquired via YouTube influencer videos is similar to Meta ads’ conversion in most cases. If your target cost per purchase is Rs 400 & website conversion is 2.5%, you can pay up to Rs 10 per click.

If you are okay with a cost per click of Rs 10, you should be okay paying Cleo Abram anything up to Rs 1,80,000 for putting your product’s message in her content along with links in the description. If Cleo Abram charges < Rs 1.8L, you should work with her; otherwise, try to work out mutually beneficial commercials. This is also a good time to discuss a creator’s deliverables.

Different Types of Video Collaborations

While this post covers YouTube videos, it can be extrapolated to any video platform. The two most used collaboration formats are:

1. Branded Video – The creator spends the entire video talking about your product. It could be a review or just a day in their life using the product. Such videos are typically more expensive and they might not bring the best out of the creators since their imagination is constrained by your products.

2. Videos with brand integration – You can also ask the creator to strategically add your product’s message somewhere in the middle of the video or even at the beginning. One of my favorite examples is how Mr Beast plugs in his chocolate brand, Feastables, into his recent videos. Commercials for such videos are a little lower than fully branded ones.

The next step is to assess and monitor the performance of your campaigns.

Monitoring Influencer Marketing Campaign Performance

Once the creators start posting videos with your brand’s message, you’d want to look at:

1. Video views

2. Click Through Rate

3. Conversion %

Compare all these metrics with your estimates.

Over time, you will develop a mature mental model of the views, clicks, and conversions, which will help you negotiate the rates and estimated spend better.

Best Practices + TL;DR

If you want to drive performance, advertise on platforms that allow visibility of past views/engagement and allow users to leave the platforms from the content screen (e.g., YouTube videos). Take an average of the views that the last 6-8 videos have received to figure out the effective cost per impression. Estimate the CTR of these videos and figure out if the cost per click of the video fits your budget. Here’s a graphical representation of the same:

As a best practice, nail down your budget first and a realistic number of conversions. You would want to collaborate with at least 7-10 creators in parallel to hedge your risk and learn more about the type of content that will work for your product/brand.

The above primer covers a very strategic framework on how to design a campaign and then reach out to influencers. I will cover how to think about brand positioning, building relationships with influencers and other execution strategies some other time.

You can write your feedback on the comments or reach out to me at marmik@blume.vc; I would be happy to cover more topics or any of these in detail. Feel free to share ideas & suggestions