It’s love at first sight: with your friend’s new sofa, or maybe your boss’s handbag. You want to know where you can get one, but you never get a chance to ask. Or maybe it’s a dress worn by a celebrity on the red carpet catches your eye. You sift through one Google search result after another to find it. You even posted a picture on your social media, hoping friends can help.
Every time something like this happens, it represents not just a dissatisfied shopper, but also a lost sale. Monetizing the influence of these contexts, something I’ve been working toward within my own business can be an enormous marketing opportunity. I call it “influence marketing.”
Influence marketing should not be confused with “influencer marketing,” which focuses on individuals pushing products to consumers. Instead, it’s about the power of content or context and empowering consumers with relevant data throughout the entire path to purchase, from brand awareness and consideration to purchase decision, which includes comparing products’ quality, price, popularity, proximity, and even relatability.
In a world hyper-saturated with advertisements, an influencer waving a new “must have” lip gloss on Instagram can become just another part of the whirl. In contrast, influence marketing doesn’t push products but rather presents them in the context of a narrative. The success of eco-friendly marketing, like Patagonia’s “Don’t buy this jacket” campaign, shows the power of an authentic, positive narrative.
To create a shoppable world, we first need to categorize sources of influence.
I divide influencers into three categories to better define my influence marketing concept: micro, macro, and mega influencers.
Micro influencers are everyday people, including those we know, who typically have fewer than 10,000 followers. They create content, or what I call “shoppable context.” They are a powerful force with a high engagement rate: 80% of Americans seek recommendations before making a purchase. Spotting a sofa in the comfort and sincerity of your cousin’s house, for instance, creates a context that sells.
Despite their high engagement rate, micro influencers are not an official part of the value chain because they’re small fries, even if they could be considered the most powerful force in the aggregate.
Macro influencers range from social media notables with tens of thousands of followers to celebrities with tens of millions. This large and influential group has been one of the main drivers of influencer marketing so far. Because they advertise to a wider audience than micro influencers, brands often work with them through affiliate networks or agencies.
While there are many examples of macro influencers making tons of money from brand and product endorsements, it is often less clear how much sales they actually generate.
Take David Beckham, for instance. The former soccer player earned 30 million pounds annually from brand and product endorsements. From the affiliate sales point of view, based on our own experience with 30 top retailers and the traditional affiliate network’s average 5% commission rate, his endorsements should have created 600 million pounds gross merchandise value (GMV). But the reality is no one knows whether he’s overpaid or underpaid.
How does much influence on brand sales Beckham possess? Does his influence still sell after his contract ends? Maybe if he could accurately monetize his influence, he could afford to be more authentic, relevant and selective about his endorsements.
As we move from micro influencers toward macro influencers, we see higher potential payout opportunities, but experience less authenticity. Consumers could be more likely to trust their friends than David Beckham, as world-renowned as he may be.
In my opinion, as a former journalist and publisher, mega influence is created by a collective consciousness that influences consumers even more than superstars like Beckham do. Sources of mega influence include mainstream media, movies, TV, red carpet shows, festivals, and experts. These influencers set trends, swaying millions of consumers with their content or context.
Studies show that video — be it a YouTube video or Hollywood blockbuster — profoundly influences product awareness, as people watch video not only for entertainment but also to learn about new trends. This influence drives people to buy, leveraging the power of storylines that create immediate and powerful emotional connections between consumers and products. Accurately monetizing this diffused mega influence has proven difficult because it’s impossible to accurately measure its extent.
Using Micro And Mega Influence
I previously mentioned that I believe blockchain has the power, DNA and bandwidth to make influence marketing a reality, scale digital marketing and enable micropayments. For micro influencers who are too small to get paid using traditional accounting and brand management, we use blockchain technology to automatically reward them with micropayments to realize peer-to-peer advertising, as GDPR and FCC limitations imposed on influencer marketing become a bottleneck.
We’ve found that mega influencers, who create shoppable content and engage with millions of consumers, can also see rewards via micropayments on the blockchain. For instance, a movie studio could be instantaneously paid via blockchain for any sales generated by content connected to a film.
The benefits of blockchain-backed influence marketing for micro and mega influencers don’t necessarily exclude macro influencers. David Beckham could also leverage blockchain to support and endorse products he loves for his fans to shop. He would get a fair commission for the sales he generates, making his value more accurate, affordable and authentic.
There have been a number of blockchain-based technologies introduced to the industry, such as the new tech from Comcast’s Advanced Advertising Group that uses blockchain within a network of participants to allow brands to make media buys on both broadcast and over-the-top (OTT) TV. Computer giant IBM is another big player in the space, as reported in Forbes. But perhaps more exciting is the effect of this technology in pull model advertising.
I believe blockchain could become an industry standard to realize cross-pollination efforts between media, consumers, and retailers to make the world around us shoppable and track influence to sales dollars.