Influencer marketing as we know it is over.
Over the years, it has gone through several evolutions. First, was the age of celebrities and individuals garnering large social media followings. Here, marketers coveted a person’s ability to reach the most significant volume of people. Next, came the era of micro-influencers and nano-influencers, along with KOLs and Key Opinion Consumers (KOCs) - bringing greater authenticity and trackability to influencer marketing.
However, the craft still faces various challenges.
One of the biggest gripes of marketers was the ability to attribute influencer marketing spend and activity to business results directly. At the same time, fraud remained a challenge for marketers, too: It was possible to manipulate engagement and followers with the right resources. In addition, the expansion of platforms and channels where influencers and creators could grow and engage their followers meant that sooner or later, influencer marketing would have outgrown the structures developed for its second evolution.
Technology today has been successful in addressing some of these issues. Access to ample data when selecting influencers, streamlining campaign operations, and automatically tracking the performance of influencer-generated content are some of the challenges solved, ultimately leading to the state that we see today.
The third evolution of influencer marketing
Today, we have entered a third evolution of influencer marketing. One where it converges with digital commerce and is highly attributable to business results. One where we will see the rise of E-Selling Opinion Leaders (ESOLs).
This evolution has been years in the making and can be considered a convenient coincidence of various puzzle pieces coming together.
Social media platforms, where influencers spend the most time, have introduced shoppable elements onto their platforms. Covid and movement restrictions created a sticky behavioural change across APAC and the world: E-commerce blossomed, and consumers were introduced to digital discoverability and purchase convenience.
Live-stream shopping is gaining traction in APAC, co-driven by social media platforms and e-commerce marketplaces. Adding to the above, there is growing traction for direct-to-consumer, conversational commerce, and digital payment adoption and usage. Plus, we now live in a world where purchasing a product online - where influencers also are - has become a norm more than an exception.
Forward-looking tech vendors for influencer marketing have already developed tools to leverage them throughout every marketing funnel stage. Yes, even conversions and purchases.
The number of touchpoints in digital commerce are so numerous today, that they have created an environment where the next logical step for influencer marketing is to merge with digital commerce.
The rise of ESOLs
The key to this third evolution is the growth of ESOLs into the influencer marketing fray. ESOLs is an overarching term for individuals with a significant online following and can help brands they love to drive sales of goods and services.
Here, traditional categories of influencers (such as macro-influencer, micro-influencer, etc.) do not matter. Also, ESOLs can drive sales across various platforms - not just social media but also livestreams, messaging apps, and even email.
However, how do ESOLs differ from KOLs and KOCs? Brands work with ESOLs long-term, and these ESOLs know the brand’s products inside and out. They then use this knowledge to convince their followers to purchase a product: from discovery to purchase, even in a single session or point of engagement.
In addition, ESOLs also work with brands they care about on a partnership basis: They earn through commission or revenue sharing from their sales. The highest level of partnership is ESOLs as an always-on retailer for the brand, where the ESOL commits to driving a certain amount of Gross Merchandise Value (GMV) for the brand.
This means that an ESOL would have the ability to leverage their content and influence to help their followers discover an item, drive interest, build consideration and intent to purchase, convert followers into customers, and build loyalty around a brand. This can be done sequentially or at the same time.
What does this mean for marketers and influencers?
Let’s start with what’s in it for marketers. Gone are the days when influencer marketing activity and spending are unattributable to sales, and cue the emergence of the Return on Influencer Marketing Spend (ROIMS). Marketers will also have insight into which influencers drive sales and build lookalike models to aid future influencer selection.
In addition, marketers can hand over greater responsibility to ESOLs for product sales and reward them accordingly, effectively reducing risk regarding influencer marketing spend. What’s more, it will be difficult for fraud to occur, as results come in the form of actual sales generated.
We’re now looking at the rise of performance-based, conversion-driven influencer marketing.
For influencers, it is all about mustering everything they have learned over the years, learning about new technology designed for the unknown creator economy and the various forms of social selling. This also opens doors to a new collaboration model with even greater earnings for the influencer. It is a new challenge, but if they can grasp it quickly, it can give them a head start into the future of influencer marketing.
The third evolution of influencer marketing is now here. One that incorporates conversion tracking, profit-sharing with influencers, and measuring ROIMS as standard practices. Like any new era, there will be uncertainty and growing pains. However, the ecosystem is mature enough to adapt and do so quickly.
The rise of ESOLs is just the first wave of this third evolution, but it also opens up a new range of possibilities for marketers and influencers. As always, those who can dive in and grasp the new options will have a substantial competitive edge in such a fast-moving space.
The question is, are you ready?
Kosuke Sogo is the chief executive officer and co-founder of AnyMind Group