Look closely at photos posted to social media of people crossing a snowy bridge or getting ready to kayak in Nova Scotia, and you may find this: #ad. This hashtag informs users that what they are seeing is an advertisement, and a social media influencer will get compensated.

Marketers and brands often employ influencers, not only to reach a wider audience, but to do so with the appearance of authenticity, often incorporating real customers in the campaign. But with news of million-dollar fines and the fallout from influencer tantrums and insensitive statements, where do marketers stand today with their influencer game?

When Marketing Influencers Work

Sue Stanfield is the founder and CEO of Take It Outside, a lifestyle clothing brand selling everything from adventure gear to casual chic apparel. In 2014 she assembled a group of ambassadors (the #TakeItOutsiders) who are responsible for posting monthly content on Instagram featuring products from her stores.

The company sought out individuals who were “like-minded” and enjoyed the outdoors — essentially their target customers — to incorporate their products into their content in a way Stanfield said “feels authentic to them, so that it never feels salesy or unnatural."

“What I love about our #TakeItOutsiders is that some of them aren’t even what you would consider a traditional influencer or content creator, they’re just really cool people, who buy our products anyway and who are talking the talk and walking the walk,” Stanfield said. “We hook them up with our products and give them incentives to shop in-store, and we go on adventures together and ask them to talk about it on social media once a month. At the end of the day, we all benefit, and we have fun doing it. I think that’s why it works so well.”

Related Article: Why Your Brand Should Care About Influencer Marketing

Avoiding a Bad Influence on Brands

As an influencer for numerous products from Adidas to Balenciaga, Ye (formerly known as Kanye and Kayne West) made a series of insensitive comments that swiftly impacted the reputation and bottom line of multiple brands.

And in October, despite the fact that #ad was included in the post, the Securities and Exchange Commission (SEC) fined Kim Kardashian $1.26 million for failing to disclose the $250,000 payment she received to publish a post related to cryptocurrency on her Instagram account, a requirement of crypto-related advertisements.

In fact the SEC has sparred with several celebrity influencers including boxer Floyd Mayweather Jr., music producer DJ Khaled, and actor Steven Seagal — eventually reaching settlements with them for failing to adhere to the disclosure rules surrounding cryptocurrency.

While celebrity mega-influencers like Kardashian should be acutely aware of the required disclosures, when marketers engage the services of nano and micro-influencers — those with under 100,000 followers — it’s critical for the company who engages them to ensures they know the rules.

Knowing the Rules of Influencer Marketing

The Federal Trade Commission (FTC) created a set of influencer guidelines to assist both influencers and companies. In short, it's important to keep the following points in mind:

  • Disclose when you have any financial, employment, personal or family relationship with a brand.
  • Financial relationships aren’t limited to money. Disclose the relationship if you got anything of value to mention a product.
  • If a brand gives you free or discounted products or other perks and then you mention one of its products, make a disclosure even if you weren’t asked to mention that product.
  • Don’t assume your followers already know about your brand relationships.
  • Make disclosures even if you think your evaluations are unbiased.

“I don’t think it’s possible to be a business owner who works with influencers and not have these concerns cross your mind," Stanfield said. "We all have a story about a bad experience with an influencer, it’s very common. But that’s also why it’s very important to ensure that the ambassadors we choose to work with have similar values and that they are aligned with our brand.”

Related Article: Is Influencer Marketing a Fit for B2B Marketing Plans?

Authentic Celebrity Influencer Marketing

With a mission of body positivity, acceptance and achieving fitness though dance, the creators of the dance app, Everdance, needed a little help reaching more users. So, they engaged participants of the Amazon Prime Video Show, “Lizzo's Watch Out For The Big GRRRLS,” as brand influencers to create their own dance classes on the app. The post announcing the news received more than 28,000 views.

“We didn't even expect how fruitful this cooperation would be," said Arina Sand, head of communications at Everdance. "We have significantly increased our brand awareness, as well as increased the number of app users and our subscribers in social networks. Kiki and Jasmine not only joined our app as dance instructors, but also made dance classes for us and inspiring videos, which we then used in our advertising campaigns in social networks.”

But the path to a successful influencer campaign wasn’t easy.

“Like many brands, at the very beginning of our cooperation with influencers, we followed the standard path, we searched for influencers on Instagram and TikTok from the relevant dance and fitness sphere, then checked their accounts for audience engagement using various services, agreed on paid posts, etc.,” Sand said. “However, this often did not bring tangible results — neither in terms of the number of new followers on our social media accounts, nor in terms of sales. The audience was interested, many then downloaded our app, but there were not as many subscription purchases as we expected. The costs of collaboration with bloggers barely covered the income received from them.”

Without much money for marketing, Sand said they started to change their tactics and choose only those influencers who can teach dance classes in the app.

“People need people,” Sand said. “They really appreciate when a blogger and a brand share their values, and the influencer himself actually uses the brand's products and participates in its development.”

Learning Opportunities

The $15,000 Social Media Post

When the marketing agency Fifth & Cor was hired by an Italian hair care company that recently expanded into the US, they engaged the services of dedicated user who posted an organic TikTok video showcasing one of their products; within 24 hours, the video led to $15k in sales, a 504% increase in transactions and a 340% increase in new users to the site.

Emilie Appleyard, a community and PR specialist at Fifth & Cor, said for this campaign, her company did prior research in order to achieve the best results including capturing trending hairstyle photos and videos, leveraging user-generated content (UGC) assets across all media channels and establishing a dedicated community through community management and proactive outreach.

One of her tips for working with influencers is to work with someone who is already a consumer of the brand.

“This helps with the overall authenticity of the content the influencer is posting and translates better with their followers. Fifth & Cor was able to bring their hair care client $15,000 in revenue after just one TikTok with an influencer who was also a prior consumer of the hair care brand,” Appleyard said. “Choosing the right influencer for a campaign is extremely important and can really make or break the success of the partnership.”

Related Article: How Influencers Help Build a Better Customer Experience

Influencers as Experts

Engaging the influence of individuals who already know, use and enjoy a brand’s product appears to be an increasingly popular — and seemingly safer strategy.

“Influencers who both know their audiences and our product well are able to craft compelling and targeted stories that resonate really well with users. And it fits really naturally with our goal of building an authentic connection with our users,” said Jennifer Smith, CEO and co-founder of Scribe. “While working with influencers is a heavier lift than traditional paid advertising, we get way more out of it. And because it’s so authentic, influencer-generated content is a gold mine that we can also use for other purposes — even as an input to brand and messaging.”

While not necessarily an influencer program, this year HubSpot began incorporating creators into its brand campaign.

“We've doubled down on brand awareness by deploying a creator-driven strategy in three big ways,” said Jessica Hair, corporate communications manager for HubSpot. “They include our Creators Program for podcasts, launching a branded TikTok presence that leverages both internal and external creators and partnering with NTWRK to showcase emerging artists.”

Is Influencer Marketing Worth the Hassle?

According to Gartner about 27% of all US consumers follow influencer accounts on social media — but the numbers are significantly higher among younger consumers with nearly half (48%) of all Gen Z consumers and 42% of millennials following influencer accounts. Influencer marketing has become mainstream and the initial hype and resulting disillusionment phases around influencers has passed, according to Jay Wilson, VP analyst for Gartner.

But that doesn’t mean marketers should just jump in. He recommends first determining the role influencers should play in your customer journey as well as your desired marketing outcomes before going out to the influencer market. Also, keep in mind what he calls the three “R’s” of influencer marketing –—reach, relevance and resonance.“There are plenty of influencers out there that may have big audiences and may seem relevant to your brand, but if they don’t resonate with their audience — if their audience doesn’t take action, then their value is limited,” Wilson said. 

Kristen Matthews, senior marketing director for Overit, said she's been involved in hundreds of influencer campaigns over the years, and they've all always brought in sales. She estimates that an average influencer marketing campaign brings in an ROI of $5 for every $1 spent — and said that one campaign for prAna brought in $10 for every $1 they spent.

“There is a delicate balance when working with influencers," Matthews said. "You want them to stay ‘on brand’ but you also want to give them creative freedom as they know their audience better than you do, so I recommend giving the influencers some talking points and creative campaign themes but trust them to do the work that turned them into an influencer in the first place. Leverage influencer-generated content in other areas of your marketing and don't just rely on an influencer's organic following. Putting budget behind influencer-generated content for social ads works better than branded ads. Leveraging influencer-generated content in ads is more effective because it offers the ‘social proof’ consumers crave.”