The Online Project · Influencers who worked previously with specialized communications agencies (e.g. social media, PR, media) acknowledge that this plays a positive role in brand

© The Online Project 2018

The Online Project


MARKETERS ARE FROM VENUSARE FROM MARSINFLUENCERS

ABOUT THIS STUDYWith influencer marketing on the rise, it is often accompanied by an increase in misconceptions on how influencer marketing is conducted.

Is it effective? What are the challenges both marketers and influencers face while working together?

This study aims to bridge the gap between both parties once and for all.


MARKETERWe conducted interviews with key decision makers in the UAE and KSA for some of the largest brands and Fortune 500 companies as well as surveyed many others.

Conducted

53 1017

By Industry

Real Estate2%

Technology31% Furniture

3%Beauty4%

Auto6%

Fashion6%

Telecom9%

Food & Beverage10%

FMCG13%

By Role

Other22%

BusinessDevelopment

Managers

4%

MarketingExecutives

5%

CEO’S19%

MarketingManagers

35%

BrandManagers

6%CMO

9%

Marketers


Face-to-faceInterviews

Online Sample Size

OnlineSurveys

Influencers

INFLUENCERSIn this study, we conducted face-to-face interviews with influencers in the UAE and KSA from diverse industries. These influencers varied from macro to micro influencers.


Conducted

24 47Face-to-faceInterviews

Online Sample Size

OnlineSurveys

KEY FINDINGSOF MARKETERS

10© The Online Project 2018

1Marketers who run well-established social media programs see influencer marketing as a natural extension of these.They acknowledge that an important factor for them to adopt influencer marketing is pressure from internal teams and competitors.

Skepticism and past failures are common reasons among marketers who avoid including influencer marketing in their upcoming plans.

Short-term plans signal howmarketers are increasingly bullish about influencer marketing

No May be15%19%

Yes66%

Marketers

© The Online Project 2018© The Online Project 2018

They acknowledge that an important factor for them to adopt influencer marketing is pressure from internal teams and competitors.

Engagement rate and sales increase are the preferred metrics to measure the effectiveness of influencer marketing initiatives.

Marketers are still figuring outhow to measure the performance oftheir influencer marketing initiatives2

Website traffic

10%Conversionrate

18%Performanceis not measured

19%Increase insales (Offline)

25%Engagementrate

28%

Marketers


An important factor that influences how marketers define the objectives for their influencer marketing initiatives and the subsequent metric is to track their effectiveness level of control that they have on the point of sale. Marketers who rely on 3rd party distribution (e.g. FMCG brands) tend to focus on engagement rate as a proxy for awareness and interest. Marketers who operate their own retail outlets opt to track sales increase as they can effectively implement mechanisms to establish the indirect impact of the influencer marketing initia-tive.

Interestingly 19% of marketers readily accept that they don't measure the per-formance of their influencer marketing initiatives.

Marketers


Marketers are increasingly feelingthe need to compensate influencerswith cash as non-monetary compensationis no longer enough

3Cash is now on the rise and represents 43% of howmarketers compensate influencers.

Marketers

$

43%Monetarycompensation

57%Non-monetarycompensation


Marketers

Not long ago marketers would almost exclusively resort to freebies, invi-tations and compliments to compensate influencers. However, that's no longer the case, especially for influencers with big and engaged follow-ings. Marketers increasingly find themselves competing with other brands for influencers' attention and commitment, which naturally gives these the power to negotiate cash deals.

Nevertheless, marketers managing aspirational brands (e.g. premium car brands) are still able to collaborate with influencers with arrange-ments based on non-monetary compensation like unrestricted access to product and exclusive events, travel, media exposure, etc.


Budgets are on the rise as influencermarketing increasingly becomesa pay-to-play game.4During the last 12 months, almost one-fourth of marketersspent more than USD 25,000 in influencer marketing initiatives.

Marketers

$1Kor lower

19%$10K - $25K19%

$25Kor higher

23%$1K -$10K39%

$ $$

$


Though budgets allocated to influencer marketing are still small when com-pared to offline channels (e.g. TV, OOH), these budgets are gaining signifi-cance in the context of marketers' digital marketing programs.

Not surprisingly, marketers who spend USD 25,000 or more are more likely to have access to bigger marketing budgets (e.g. FMCG). Nevertheless, this group is also represented by marketers who have had success in earlier influencer marketing initiatives and decided to reallocate budgets (from offline and other online channels) to scale up the positive re-sults.


Influencers' content quality isthe key factor marketers useto define the level of compensation5

Marketers

6%

11%

13%

15%27%

Based on the quality of comments thatare on the influencer's profile

Based on the amountof followers

Based on the relationshipwith the influencer

Based on the profileof followersBased on the quality of content

produced by the influencer

28%Based on the results

of the campaign


Marketers

Most marketers consider influencer compensation a complex topic. This is due to the intrinsic subjectivity of evaluating content quality and the fact that compensation is determined, in most cases, before campaign results become available. Interestingly, the number of followers has secondary importance for marketers. This is explained by the decline of organic reach among the influencers' own audiences.

Nevertheless, the number of followers is still important as it influences how marketers select influencers and also determines the starting point of compensation negotiations.

Content quality and campaign results are the main factorsused by marketers to determine influencer compensation.


Half of marketers opt to plan and runtheir influencer marketing initiativesin-house, but not without some pains6

Marketers

Other

3%InfluencerMarketingAgency

5%PR Agency

11%

Media BuyingAgency

11%Social MediaAgency

18%In-houseteam

52%


Over half of the marketers run their influencer marketing initiatives in-house. Those who outsource it prefer to work with social media agencies.

Marketers who opt for an in-house approach do so motivated by the idea of building direct relationships with influencers and to minimize costs.

Marketers who choose to outsource their influencer marketing initiatives are motivated mainly by the belief that working with specialists yields better results.

Marketers


Finding the right influencers isthe biggest pain-point for marketerswho run influencer marketing in-house7

Marketers

Two-thirds of marketers who run influencer marketing in-house say their biggest pain-point is finding the "right" influencers.


Marketers acknowledge that researching and identifying influencers that represent a good fit for their brands is a complex and time consuming process. Furthermore, they say that successfully approaching influencers is highly dependent on personal chemistry and rapport.

Some marketers have made attempts to streamline thisprocess by using online tools, with mixed results.

Payment terms

15%Unresponsivnessduring the campaign

18%Finding theright influencers

67%


Marketers identify a lack of budgetsas the main obstacle to runinfluencer marketing initiatives.8

Marketers

Budget restrictions was the main obstacle for marketers who didn't run any influencer marketing activities during the last 12 months.

Though skepticism of the value of influencer marketing accounts for 20%, this opinion is particularly salient in certain categories like car dealerships.

3%

8%

8%

10%

12%42%

ChoosingInfluencers

Added Value

Lack of specializedagencies

Technicalknow-how

If influencermarketing works

Budget restrictions


Hesitant marketers prioritize socialmedia and other digital channels.9

Marketers

Marketers inactive on the influencer marketing front during the last 12 months prioritized social media content and advertizing.

Influencer marketing competes with budgets mostly with other digital channels like social media (content and advertizing) and email marketing.

1%Celebritycollaborations 8%

Paidsearch

11%DisplayAdvertizing

12%Events

12%PrintAds

16%Online Ads

18%Emailmarketing

22%Content Creation


Proven ROI is not the only factor thatwould persuade hesitant marketers toadopt influencer marketing.10

Marketers

Besides ROI and pricing, access to influencer marketing professionals is a factor that would persuade hesitant marketers to adopt influencer marketing.

Since influencer marketing is a relatively recent offering from communications agencies (and individual professionals) marketers find it challenging to discern who can help them plan and run influencer campaigns effectively and profitably.

30%Specializedagencies

40%Proven ROI

30%Competitive

pricing


7KEY FINDINGS OF

INFLUENCERS


1While compensation is a keyfactor in brand collaborations,influencers primarily value the fitof the approaching brand withtheir own personal brand.

Influencers

The reason why brands collaborate with me is because I know how to entertain and engage my audience through my personal brand so brands need to give me the creative space to do that and not bury me with guidelines

– Lifestyle In�uencer 1.1M Subscribers

Personal brand is what influencers value the most.


Influencers

Influencers are most appreciativeof brands that make the effort tounderstand their values,audience, content topics and tone of voice. Most are ready to decline brand collaborations that, in theiropinion, clash with what theystand for and the message theywant to convey, no matter thelevel of compensation.


2Influencers believe that clarity and realistic expectations are key ingredients for successful brand collaborations. Nevertheless, they frequently come across brands with unclear objectives and scopeof work.

Lack of clarity in objectives and scope work is the biggest challenge.

Influencers

The worst thing that can happen in a campaign is the client asking for things we never agreed on initially. That’s one of the reasons why it’s sometimes better to work with a social media agency or 3rd party so agreements are drafted early on.

– Fashion In�uencer 120K Followers


Many influencers have learned the hard way that engaging with brands under these circumstances typically lead to ever changing requirements, broken communication, and ultimate-ly, dissatisfaction on both ends.

Influencers


3Influencers who worked previously with specialized communications agencies (e.g. social media, PR, media) acknowledge that this plays a positive role in brand collaborations in most situations.

Influencers

Agencies understand us more than brands do and that’s probably because they are specialized in working with social media and in�uencers. They also help us take care of the majority of the leg-work so it’s smooth sailing for us to focus on what we do best; create content.

– Beauty In�uencer 900K Followers

Specializedagencies areseen in mostsituations asfacilitators.


In their eyes agencies take care of the "legwork and formalities", including contracts, logistics and payment collection.

Influencers


4Influencers who prefer working directly with brands value the opportunity of meeting the brand's representative in person.

Those who work directly with brandsvalue direct communication

Influencers

Working directly with the brand team decreases the chances of miscommunica-tion so it’s much more clear. Think of it; when you tell someone something and then it goes through 5 people, you end up getting a completely di�erent mes-sage.

– Tech In�uencer 98K Followers


This is with the purpose of having a better understanding of what the collab-oration is meant to accomplish and to get quick feedback on ideas.

Nevertheless, they also acknowledge that brands often don't have the sensitivity to understand their needsand the willingness to accommodateto their requirements.

Influencers


5Many influencers with largeaudience platforms and estab-lished reputations embrace brand collaborations as a full-time commitment. As the frequency, complexity, and compensation of their brand engagements increase, it’s common for them to partner with managers and talent management agencies.

Influencers

Managers remove emotions from the game. As in�uencers we often �nd ourselves in awkward situations about payments, additional FOC posts and what-not. When a manager is involved, they can negotiate better and take care of all the work that comes with it such as contracts, agreements, invoicing, etc

– Comedy In�uencer 1.2M Followers

It's common for well-establishedinfluencers to work with managers.


These normally take responsibility for the "business aspects" of brand collaborations, enablinginfluencers to focus their energy on developing content.

Influencers

Full Time


6Influencers say that time and effort are the key factors in de-termining compensation. This is especially true for smaller and emerging influencers.

Influencers

Time, effort, and audience size are key factors used by influencers to determinecompensation.

There is no one size �ts all for pricing but the main thing I look at is how much time I am going to spend working on the campaign as well as where the brand is using the content that I create. Follower-base isn’t as important as it used to be with organic reach decreasing daily.

– Lifestyle In�uencer74K Followers


Nevertheless, in the case of well-established influencers, the size of their audience dictates the starting point of compensation negotiations.

Some influencers acknowledge that audience size is diminishing in importance as the organic reach in the most prominent social media platforms decrease.

Influencers


7Smaller and emerging influencersdetermine the success of their brand collaborations mostly by the qualitative aspect of the feedback they receive from their audience.

Influencers

There are a lot of numbers to look at but what do they all really mean? Just because I got a high engagement rate might not mean I sold products for the brand; it could mean they like my content. I like to look at the quality of responses I get from my community such as what people comment and what they message me saying

There's no standard wayin which influencers evaluate their own performance


– Lifestyle In�uencer1.1M Subscribers

On the other hand, well-establishedinfluencers tend to adopt a moreformal approach to evaluate theirperformance. They're increasinglymore comfortable reporting keymetrics like reach, engagement rate,and click-through-rates.

Influencers


The Online Project +971 4 420 9064PO Box 502029Unit 109 - Building 4CDubai Media CityDubai, United Arab Emirates

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The Online Project · Influencers who worked previously with specialized communications agencies (e.g. social media, PR, media) acknowledge that this plays a positive role in brand