Influencer marketing, (also Influence Marketing) is a form of marketing that has emerged from a variety of recent practices and studies, in which focus is placed on specific key individuals (or types of individual) rather than the target market as a whole. It identifies the individuals that have influence over potential buyers, and orients marketing activities around these influencers.

Influencers may be potential buyers themselves, or they may be third parties. These third parties exist either in the supply chain (retailers, manufacturers, etc.) or may be so-called value-added influencers (such as journalists, academics, industry analysts, professional advisers, and so on)^[1].

[edit] What is 'Influence'?

Most discussion on the generic topic of social influence centres on compliance and persuasion in a social environment, as exemplified in Robert Cialdini's book Influence: Science and Practice^[2]. In the context of Influencer Marketing, influence is less about argument and coercion to a particular point of view, and more about loose interactions between various parties in a community. Influence is often equated to advocacy, but may also be negative, and is thus related to concepts of promoters and detractors^[3].

[edit] Influencer Marketing as a Marketing Discipline

Influencer Marketing, as increasingly practiced in a commercial context, comprises four main activities:

• Identifying influencers, and ranking them in order of importance.
• Marketing to influencers, to increase awareness of the firm within the influencer community
• Marketing through influencers, using influencers to increase market awareness of the firm amongst target markets
• Marketing with influencers, turning influencers into advocates of the firm.

Influencer Marketing is enhanced by a continual evaluation activity that sits alongside the four main activities.

Influencer Marketing is not synonymous with word of mouth marketing (WOM), but influence may be transmitted in this manner. Thus WOM is a core part of the mechanics of Influencer Marketing^[4].

There are substantial differences in the definition of what an influencer is. Peck defines influencers as "a range of third parties who exercise influence over the organization and its potential customers"^[5]. Similarly, Brown and Hayes define an influencer as "a third party who significantly shapes the customer's purchasing decision, but may never be accountable for it."^[6]. The Word of Mouth Marketing Association defines an influencer as "A person who has a greater than average reach or impact through word of mouth in a relevant marketplace^[7]. Keller and Berry note that influencers are activists, are well-connected, have impact, have active minds, and are trendsetters^[8], though this set of attributes is aligned specifically to consumer markets.

Exactly what is included in Influencer Marketing depends on the context (B2C or B2B) and the medium of influence transmission (online or offline, or both). But it is increasingly accepted that companies are keen to identify and engage with influencers. As Keller and Berry note, " Business is working harder and paying more to pursue people who are trying to watch and listen less to its messages." Targeting influencers is seen as a means of amplifying marketing messages, in order to counteract the growing tendency of prospective customers to ignore marketing.

[edit] Identifying influencers

The first step in Influencer Marketing is to identify influencers. Influencers are specific to discrete market segments, and are used as conduits to the entire target segment. While there are lists of generic influencers (such as the Time 100) they have limited use in marketing programmes targeted at specific segments.

Market research techniques can be used to identify influencers, using pre-defined criteria to determine the extent and type of influence. For example, Keller and Berry propose five attributes of influencers^[9]:

• Activists: influencers get involved, with their communities, political movements, charities and so on.
• Connected: influencers have large social networks
• Impact: influencers are looked up to and are trusted by others
• Active minds: influencers have multiple and diverse interests
• Trendsetters: influencers tend to be early adopters (or leavers) in markets

Most of the literature on influencers focuses on consumer markets. There is less insight into business-to-business influencers. A key distinction between consumer and business markets is that most of the focus in consumer markets is on consumer influencers themselves. This is because word of mouth communication is prevalent in consumer environments^[10]. In business marketing, influencers are people that affect a sale, but are typically removed from the actual purchase decision. Consultants, analysts, journalists, academics, regulators, standards bodies are examples of business influencers.

Not all business influencers are equal. Some have more influence than others, and some mechanism of ranking is required, to distinguish between key influencers and less impactful people. A model for ranking business influencers has been developed by Influencer50, thus:

• Market Reach ' the number of people an individual has the ability to connect with.
• Independence ' whether an influencer has a vested interest in promoting a particular point of view.
• Frequency of Impact ' the number of opportunities an individual has to influence buying decisions.
• Expertise ' how much of a subject matter expert is the influencer.
• Persuasiveness - the degree of consequence in ignoring an influencer's advice.
• Thoroughness of role - the extent to which influence is exerted across the decision lifecycle.

Several other companies including Ammo Marketing and Liquid Intelligence in the US, Agent Wildfire in Canada, SCB Partners in Europe and Vocanic in Asia have developed their own proprietary methodologies for identifying and targeting influencers for a market (or market sector).

Fred Reichheld, a consultant at Bain & Company, has developed a methodology to determine the extent to which firms' growth is influenced by customers' propensity to make referrals to colleagues.^[11] Reichheld distills his research down to a single question: how likely is it that you would recommend company X to a friend or colleague? From answers to this question, a Net Promoter Score is determined, which correlates strongly with a firm's growth rate.

The Avant-Guide Institute, a New York-based trends consultancy, has a large proprietary network of influential early-adaptors (called "Trendsformers") numbering in the thousands, including journalists, bloggers, academics, industry analysts and professional advisors.

Using online social media tools to identify influencers

Web services can be used to crawl social media sites for users that exert influence in their respective communities. Exactly how much is the user engaging the online community? The social influencer marketing firm then asks those influencers to try client products/services and discuss them on their respective social networks. Clients can then observe, through an enhanced digital dashboard, with metrics that measure the dissemination of brand mentions across numerous web platforms.

Onalytica^[12] and other firms use this approach - indeed according to Philip Sheldrake there are at least 70 companies offering online influence measurement^[13]. Advocates of this online-only approach claim that online activity reflects (or pre-empts) the trends in offline transactions. For example, Razorfish released one of the first social influencer marketing reports, entitled Fluent.^[14] The report discusses many theories surrounding social marketing, including the importance of the push/pull dynamic and online consumer empowerment, authenticity and importance of buzz marketing.^[15]

In addition, online activity can be a core part of offline decision making, as consumers research products and review sites.^[16]

Critics of this online-only approach argue that only researching online sources misses critical influential individuals and inputs^[17]. They note that much influential exchange of information occurs in the offline world, and is not captured in online media. Indeed, the majority of consumer exchanges occurs face-to-face, not in an online environment, as evidenced by Carl^[18]. He notes that "an overwhelming majority of WOM episodes (nearly 80%) ... occur in face-to-face interpersonal settings, while online WOM accounted for only seven to ten percent of the reported (WOM) episodes."

Carl concludes that "The majority of the WOM action still seems to be happening in the offline world. These findings are especially provocative since they emerge at a time when more and more organizations are paying attention to how their brands are discussed online and recent academic research has focused on online WOM. Thus it is important for organizations to keep both online and offline conversations on their radar screen."

Keller Fay announced in 2007 that "While experts have previously estimated that 80% of marketing-relevant word of mouth takes place 'offline' (i.e., face-to-face or via telephone), the new results indicate that this figure is even higher - 92%."^[19]

More recently, Nate Elliott at Forrester observed that "the huge majority of users influence each other face to face rather than through social online channels like blogs and social networks."^[20]

And the Fluent report^[21], though generally orientated towards online measures admits that "it is necessary to remember the effect that offline social activity has on purchasing decisions." It also notes that survey "respondents trust offline friends most, with 73 percent indicating near or complete trust versus just 33 percent for online friends."

[edit] Influencer ecosystems and roles

Sources of influencers can be varied. Marketers traditionally target influencers that are easy to identify, such as press, industry analysts and high profile executives. For most B2C purchases, however, influencers might include people known to the purchaser and the retailer staff. In higher value B2B transactions the community of influencers may be wide and varied, and include consultants, government-backed regulators, financiers and user communities.

Forrester analyst Michael Speyer notes that, for small and medium-size business, "IT sales are influenced by many parties, including peers, consultants, bloggers, and technology resellers"^[22]. He advises that "Vendors need to identify and characterize the influencers in their market. This requires a comprehensive influencer identification program and the establishment of criteria for ranking influencer impact on the decision process."

An emerging exemplar of this approach is SAP AG, whose Influencer Relations approach is being documented by Don Bulmer in his blog^[23].

As well as a variety of influencer sources, influencers can play a variety of roles at different times in a decision process. This idea has been developed in Influencer Marketing by Brown & Hayes^[24]. They map out how and when particular types of influencer affect the decision process. This then enables marketers to selectively target influencers depending on their individual profile of influence.

The influence of bloggers and other social media users is a topic of much discussion. This is covered in depth in Paul Gillin's The New Influencers^[25]. Brown & Hayes also cover the subject but are less convinced of the importance of the impact of social media, particularly in B2B settings.

[edit] See also

• Relationship marketing
• Word of mouth marketing
• Customer engagement
• Business Marketing
• Reputation management
• Business-to-business
• Alpha User

[edit] References

1. ^ Brown, Duncan and Hayes, Nick. Influencer Marketing: Who really influences your customers?, Butterworth-Heinemann, 2008
2. ^ Cialdini, Robert. Influence: Science and Practice, Allyn and Bacon, 2001
3. ^ Reichheld, Fred. The Ultimate Question: Driving Good Profits and True Growth, Harvard Business School Press, 2006
4. ^ Brown, Duncan and Hayes, Nick. Influencer Marketing: Who really influences your customers?, Butterworth-Heinemann, 2008
5. ^ Peck, Helen, Payne, Adrian, Christopher, Martin and Clark, Moira. Relationship Marketing: Srategy and Implmentation, Butterworth-Heinemann, 1999
6. ^ Brown, Duncan and Hayes, Nick. Influencer Marketing: Who really influences your customers?, Butterworth-Heinemann, 2008
7. ^ WOMMA's Influencer Handbook
8. ^ Keller, Ed and Berry, Jon. The Influentials, Free Press, 2003
9. ^ Keller, Ed and Berry, Jon. The Influentials, Free Press, 2003
10. ^ Brown, Duncan and Hayes, Nick. Influencer Marketing: Who really influences your customers?, Butterworth-Heinemann, 2008
11. ^ Reichheld, Fred. The Ultimate Question: Driving Good Profits and True Growth, Harvard Business School Press, 2006
12. ^ Onalytica home page
13. ^ The increasingly crowded market of Social Web Analytics
14. ^ Razorfish Report
15. ^ Highlights of the Fluent Report
16. ^ McKinsey: The Consumer Decision Journey
17. ^ Brown, Duncan and Hayes, Nick. Influencer Marketing: Who really influences your customers?, Butterworth-Heinemann, 2008
18. ^ [Carl, W. J. (2006). What's all the buzz about? Everyday communication and the relational basis of word-of-mouth and buzz marketing practices. Management Communication Quarterly, 19(4), 601-634.]
19. ^ Keller Fay's TalkTrack� Press Release May 15, 2007
20. ^ Elliot, Nate. Using Social Media To Create And Amplify Offline Influence
21. ^ Highlights of the Fluent Report
22. ^ Speyer, Michael. Identifying IT Buyers' Hidden Influencers: Finding And Nurturing Your Brand Presence Beyond Your Formal Channels, Forrester Research, 2007
23. ^ Don Bulmer's Everyday Influence blog
24. ^ Brown, Duncan and Hayes, Nick. Influencer Marketing: Who really influences your customers?, Butterworth-Heinemann, 2008
25. ^ Gillin, Paul. The New Influencers, Quill Driver, 2007

[edit] External links

• Word of Mouth Marketing Association
• Deep Dive Marketing/Influencer Marketing is a blog about Influencer Marketing
• Influencer Marketing book web site
• ATA research focusses on IT analyst influencer's
• How They Change Your Mind The social impact of undisclosed marketing
• The Ultimate Question site