scorecardresearch

Is it true? Companies prefer performance based marketing over traditional influencer marketing

The impact of influencer marketing on e-commerce, fintech, food tech and edtech

Is it true? Companies prefer performance based marketing over traditional influencer marketing
Social influencers today play a pivotal role in consumer decision-making.

By Kirill Pyzhov 

Today, the world of consumerism runs on influencer marketing. It is estimated to be one of the fastest-growing and most-preferred online customer acquisition channels, which can eventually outpace organic search and email marketing. In India, it grew by 40 per cent in 2021, and it is estimated to keep growing at a similar pace in 2022, increasing the revenue from Rs 900 crore to Rs 1,200-1,300 crore. Further, this growth is bound to amplify in the coming years. (Source: Recent report by Group M) 

A significant shift: Traditional influencer marketing versus performance-based marketing

With the social media landscape changing rapidly, there has been a significant shift in the influencer marketing strategy of brands. Influencers have had an exciting journey from being contemporary social figures to creating a massive impact on the brand marketing space and now being an essential part of corporate budgets. They cover the entire spectrum of niche, micro, macro to mega or celebrity influencers and boast about followers in thousands and lakhs. Brands have begun to invest in this domain for maximum market penetration. Nevertheless, compared to other influencers, the market share of micro-influencers continues to grow. From 89% share in 2020, it grew to 91% in 2021. Micro-influencers witness this success because their followers are often more engaged and value their opinion over other large influencers.

“Brands want to leverage and partner with influencers to not only increase their reach but create effective measurable marketing campaigns for conversions. Hence, there is a need for performance metrics to measure and assess influencer brand alliances for guaranteed success..”

Cost-per-action model: Investing in a performance partnership alliance

The essence of performance-based influencer marketing is based on the influencer’s results and not merely on their popularity. It is a pay-for-performance model as opposed to traditional influencer marketing, where brands evaluate influencers based on the number of subscribers, likes, and comments. This model further leverages micro-influencers, or nano influencers, which is beneficial to both, the influencer and the brand, or the advertiser. Applying performance-based influencers lowers the risk of an unsuccessful brand campaign by assuring the quality of work done by the influencer. It ensures the authenticity of the influencer and also involves a lesser risk by the advertiser.

Performance-based influencer marketing in e-commerce

Social influencers today play a pivotal role in consumer decision-making. In a rather saturated online landscape, micro-influencers are becoming the more reliable source of information to the target audience. They are our modern-day salespeople and more relatable brand endorsers. It is a primary reason for e-commerce to invest further in performance-based influencer marketing.

DRIM helps achieve the right performance-based influencer program by identifying the right influencer with the e-commerce goals set by the brands. By leveraging micro-influencers, e- commerce businesses can build trust and credibility for themselves. The strength is in equipping the influencer with the tools required to prove their performance and the brand with the technology required to optimise the business goals.

Conclusion: Collaboration, creation, and performance are key

Performance-based influencer marketing is a more effective marketing channel than merely hoping that your choice of influencers will bring positive results. In its essence, the practice of using data to create reliable collaborations that are measurable between brands and influencers is the key to successful influencer marketing campaigns.

The author is co-founder and chief operating officer at DRIM

Also Read: The Laughing Cow together with Havas Worldwide India brings cheese-making experience at KidZania

Follow us on TwitterInstagramLinkedIn, Facebook

Get live Share Market updates and latest India News and business news on Financial Express. Download Financial Express App for latest business news.