Influence marketing experts’ top secrets

Summary: Revlon chooses a social media influencer – nail ‘artist’ Chelsea King.
How did Revlon rank influencers in order to make their choice?
What ROI (return on investment) can Revlon expect?

Recently I read the following news:

In a shift from using traditional celebrities as brand ambassadors, Revlon has teamed up with social media influencer and nail artist Chelsea King to reach new consumers in an authentic way, says Tracy Rohrbaugh, vice president of global marketing for Revlon. King will create unique content for Revlon and promote the brand through her own accounts.

The above illustrates that Revlon did not have any precise measurement method to rank and select the most suitable social media influencer. This got me thinking… How do we develop metrics and apply these in order to choose the most suitable influence marketer for our brand?

Advertising 101: Neither Snapchat nor Instagram?

On average, Snapchat users watch 80 videos a day. I recently asked people which videos they remembered and the answer was:

  1. the funniest one this week, from a friend, or
  2. the last really gross video I got about three days ago… the rest I do not remember.

Of course, this is not a scientific study. But what content stands out that you remember, dear Instagram or Snapchat user?

Wait, it gets better! Now we also have the Pay Your Selfie app in the US. This is an app that pays people between 20 cents to 1 Dollar for their selfies made with certain products. These are then posted to the Internet, such as on Instagram, and help sell product – at least in theory.

And the most important thing for brands seems to be finding these influencers – not celebrities. Well, maybe they are celebrities in their own right through sharing their silly moments, touting product and so forth.

But do these influencers get us to purchase another coffee maker, lipstick, stiletto heels or pair of pants?

Here are some things we may want to keep in mind.

1.1 Broadcasting is not sales

People increasingly began using social media around 2005. By 2010 many used several Social Networks, such as Facebook or Twitter. Just about a decade ago it was clear that social media empowered the average user to:

1. create and share content (i.e. many share with many or a few people) easily, AND
2. foster dialogue and engagement – this was and continues to be important.

All this has meant that attention has shifted from simply trying to sell toward focusing on understanding the needs of the buyer.

Influencer marketers supposedly listen to their fans’ needs. In turn, they review and test products that interest their target audience  (e.g., lipstick, TV or software).

The idea is, of course, that this information will help sway viewers of a video and readers of a blog post to purchase the product. At least, the manufacturer or seller hopes their product will be considered when we are in the store or buying online.

What are influencers? (read blog entry)

There are certain factors that affect how many people you reach, such as the number of:

– fans on Facebook or Instagram, AND
– social shares of your content on social networks (i.e. whether it creates a ripple).

Nevertheless, what is the ultimate objective? Do we want influencers to help us with word-of-mouth marketing, do we hope for more sales, or what?

Is Chelsea King really authentic, social and an influencer? View the stats – survey says…!

Revlon's Chelsea King - DrKPI blog benchmark shows her influence seems very low.
Revlon’s Chelsea King – DrKPI blog benchmark shows her influence seems very low.

2. How did Revlon identify Chelsea King as an influencer?

It seems Revlon and its ad agency had a hard time measuring influence directly. Could we maybe measure influence by following generally accepted procedures?

Cover PR, an agency that negotiates deals for bloggers with large brands might help here. It attempts to ‘measure’ the concept of influencer as follows:

Influencers can be identified by choosing faces not just because of their reach but also based on quality, authenticity and professionalism (“… ausgewählte Gesichter, die nicht nur nach Reichweite, sondern auch nach Qualität, Authentizität und Professionalität ausgesucht wurden.

Easy, right? The result is you get mostly young women and a few guys (not pictured here). That is superb. NOT.

Some agencies are vague about how they define influence: Is it really just having reach, producing quality, being authentic and professional? | Copyright: CoverPR |
Some agencies are vague about how they define influence: Is it really just having reach, producing quality, being authentic and professional? | Copyright: CoverPR |
Hold on, not so fast. How were these women selected?

Martha Lane Fox (founder of lastminute.com) is attributed as having said, instinct or gut feeling should be ditched in business. This applies for our task of finding influencers as well.

Just using a few buzzwords to describe these influencers such as aesthete (Schöngeist) or real free spirit will not do, will it?

Compliance for beginners

If a blogger is an influencer and works with brands, is the blogger compliant to local advertising and content regulations?

For instance, a sponsored post must be marked as such at the top of the entry. If it is not, but has a little footnote to that effect, this might not satisfy the regulator, as Buzzfeed learned and paid for in the UK.

Compliance mistakes, such as failing to label native advertising as required, occur frequently. Of course, as a brand marketer we would hope that the agency prevents its client from making such beginner faux pas.

2.1 Does the content make a difference to our bottom line?

Influence goes beyond getting eyeballs to view your blog content. Nonetheless, is being authentic or professional part of how we define and measure influence?

Yes, maybe – because it is likely to manifest itself as many reader comments. Thoughtful comments do give other readers added value. And of course, we mean better comments than a simple feel-good note, such as, “Great post, thanks for sharing.”

But this still leaves out engagement and dialogue. How do we know people care about what we do and are influenced?

To illustrate, it might be that with 427,000 Twitter followers, one of your tweets gets 18 likes, 5 retweets. Is this a satisfactory ROI? 

Put differently, will this tweet influence your followers to purchase the product in the near future?

Rachel Roy tweets for a donation drive - resonance poor.
Rachel Roy tweets for a donation drive – resonance poor.

Guy Avigdor, COO of Klear, a software company that sells services to calculate your influence, attempts to identify influencers. For instance, Guy identifies Tory Burch as a very influential fashion blogger on Twitter. Unfortunately, once again the person gets very low resonance for her tweets.

If the dialogue ratio is rarely more than 0.001 percent, who cares if you have a few thousand or even hundreds of thousands of Twitter followers or Facebook fans?

2.2 Do fans engage with your content?

Let us agree, if your stuff gets shared on various social networks such as Twitter, Facebook or Pinterest, you are probably influential.

But besides more traffic or views of your content, does it really influence people in what they intend to buy or will purchase tomorrow?

As illustrated above and repeated by many who are deemed to be influencers, the resonance from fans and followers is very small in the social media space.

3. Influence: How to move MORE product

So you are a blogger and have influence. Let us cover the basics first.

We want influence to help us strengthen our brand and, hopefully, result in more product being sold. This chest of drawers will help us clarify further.

Antique chest of drawers: 3 drawers explain concept of market strength | 1 Awareness OF | 2. Belief about AND |3. Attitudes toward brand.
Antique chest of drawers: 3 drawers explain concept of market strength | 1 Awareness OF | 2. Belief about AND |3. Attitudes toward brand.| Copyright: Fotasia |

Brand Strength could be described as a little chest of drawers (see above image).

According to David A. Aaker this chest then has three drawers with the following contents:

1. Awareness of the brand, meaning our target audience knows about our brand – or not.
2. Association and beliefs about the brand (e.g., associating the brand with sustainability).
3. Attitude towards the brand (i.e. positive, negative or no opinion).

An influential blogger can raise awareness of a label with the target audience. If it works, beliefs about a brand might be shifted or one’s attitude toward a brand changes for the better (e.g., they are trying hard to improve sustainability of their supply chain – see book from David A. Aaker).

Of course, we want to improve the reach of content that talks about the product with the help of the influencer. As well, we hope this will increase trust in our brand and product (see also guest blog post by Meike Leopold).

Top 6 secrets for measuring influence marketing: Questions you want answers for

Unless you get satisfactory answers to the questions below, you may not really know how your influencer was identified.

Check this carefully or pay through the nose for little, if anything.

1. What criteria were used to identify influencers for your purpose?

If the answer makes sense, go to question 2. If not, skip the rest.

2. How was influence defined?

There is no shared definition of influence. Nevertheless, if your agency wants to get you to work with influencers, let them explain what they mean by the term. The result will be discussion about your desired final outcome, achieved with the help of the influencer’s work.

3. How was influence measured?

Once we define something (point 2 above), we need to come up with criteria to measure it.

If not, the list of influencers shown to you is basically random. Don’t expect to be happy with the results of collaborating with people on this list.

4. Are we being snowed by savvy impression management?

Explicit impression management is externally oriented self-presentation (Gattiker, 2004). Sometimes “influencers” just do a great job presenting themselves as influential at conferences, special events and so forth.

Of course, getting others to believe you know what you’re talking about is the first step on the way to being labelled an expert.

Nonetheless, does that give someone the necessary credibility with our target audience, our customers?

5. Are we falling victim to reputation bias?

Reputation is what is generally said or believed about a person’s character or standing. Conference organisers may fall victim and book speakers whose expert status or reputation is primarily based on savvy impression management.

Hence, checking if reputation is based on facts or fluff matters if we want to get a satisfactory ROI out of blogger relations and working with influencers.

6. Are we reinforcing age, gender and / or race discrimination?

As parents we know, once the kids become teens our influence with them wanes. Similarly, a 50-year-old consumer working in the city is unlikely to follow a 20-something’s advice on which stilettos to buy.

Working with influencers in a certain age, gender or race group may be great. But if they fail to reflect our mix of customers, we may have fallen victim to discriminating against certain groups of individuals.

Bottom line

We need answers to these six questions. In this process, we can either understand the metrics used or develop a measurement method for our purposes. Our measurement method must meet the requirement for repeatability and reproducibility.

The influence marketing ranking is repeatable, if others can re-run the analysis using the same method and reproduce the same results.

Black boxes or algorithms that are kept secret do not permit this. Does it seem advisable to base business decisions on methods we fail to comprehend?

3.1 Useful resources and tools

– Why your social traffic looks low in analytics tools

– Easy-to-use Google tool for campaign tracking. Whenever we work with influencers, we should manage our URLs systematically. This helps improve our SEO (Search Engine Optimisation). To illustrate, a link I share on this blog to another post in our blog could be made up like this one: http://blog.drkpi.com/show-me-the-numbers-2?utm_source=Blog&utm_medium=socialmedia&utm_campaign=influencer-marketing – meaning the visitor came from the blog, from a post about Instagram and influencer marketing…

– As a SaaS (Software as a Service) provider that claims to “Generate Qualified Leads on Social Media space” you should be social in order to influence your target audience. Turning off commenting is not the right strategy.

– More on word-of-mouth marketing that influencers can help make happen – if we do it right, of course.

– Influence marketing und compliance (German)

4. Ranking influencers: Fact versus fiction

Many social influence metric tools are intransparent and work like a black box. Nonetheless, algorithms represent choices made by the engineers that designed them. Hence, algorithms are not neutral. Unless the method is made transparent, buyer beware.

Some influence measures multiply ranking with mentions on Twitter. This ignores the fact that people automatically retweet, often without having read content first.

Others calculate influence for bloggers using the Alexa ranking. The latter counts your traffic only if you have their plugin installed with your PC browser and ignores mobile traffic.

You can measure influence with the help of engagement, using proxy measures, such as number of tweets, number of retweets, number of replies, favourited tweets. But claiming to measure engagement with such metrics is an inexact science at best and voodoo at worst.

Tomoson surveyed 125 marketers during March 2015, and now claims that based on its survey replies, companies gain $6.50 for every $1 spent on influencer marketing. However, such studies are not representative, so these numbers are dubious at best.

Repeatability and reproducibility of such data and findings lie at the heart of sensible decision-making.

Using blog metrics from the DrKPI BlogRank we found that most ‘influential’ European style bloggers fail to make the top 10. A blogger was considered influential if their name was included in a list, such as those published by Vogue, Annabelle and so forth.

Just one influential blogger makes the top 10, as shown below.

Ranking blogs using DrKPI software reveals what Vogue, Annabelle, etc. identify as influentials fail to make the cut.
Ranking blogs using DrKPI software reveals what Vogue, Annabelle, etc. identify as influentials fail to make the cut.

Check out the best fashion and style bloggers in Europe and how the DrKPI BlogRank works.

Incidentally, as a style blogger real style also means you have the personality to match. Unless the blogger expresses something of their personality, it could be lost in a mess of peroxide and passionless fashionability.

Great style blogs are all about substance. And that ain’t easy to measure 🙂

4.1 Narcissism versus self-esteem

Self-esteem can be defined as a subjective sense of one’s self worth and being competent. It correlates with good things such as emotional well-being and being persistent when doing a task. Narcissism means the person feels superior (I know best – I should decide). Such individuals crave admiration and adulation.

When we talk about social media influencers, narcissism plays a role. Narcissists seek attention and admiration and lash out at anyone criticising them. Donald Trump is probably the best known example of a narcissist. But if your personality is mostly about yourself and how to put yourself in the spotlight, we might have no more.

Incidentally, research with children indicates that parental overvaluation nurtures narcissism, and parental warmth nurtures self-esteem.

Myers, David G. (March 2016). Is Narcissism Extreme Self-Esteem? (written for general audience, refers to some great research articles on the topic). Retrieved, May 25, 2016 from http://www.psychologicalscience.org/index.php/publications/observer/2016/march-16/teaching-current-directions-in-psychological-science-28.html
Also interesting is http://www.psychologicalscience.org/index.php/publications/observer/2013/december-13/narcissism-unleashed.html

For the brand marketer this means that finding the best social media influencer is a tricky thing. A certain degree of narcissism might be okay and come with the territory. However, for a productive long term collaboration, plenty of self-esteem is preferable to loads of narcissism.

Narcissists tend to focus on materialism, have inflated expectations and show less relationship commitment than others. Such individuals are not easy to work with as a brand ambassador. Again, the secret to real style is having the personality to go with it. Nevertheless, narcissists need not apply, unless we have the patience and energy to deal with temper tantrums, tears and anger in spades.

5. Have your say – join the conversation

Source: Influence marketing experts’ top secrets

What is your opinion?

  • How do you choose the best social media influencers for your brand?
  • When were you so glad you had a social media influencer on board?
  • How do you budget for social media influencers?

The author declares that he had no conflict of interest with respect to the content, authorship or publication of this blog entry (i.e. I neither own any of these brands’ products nor are they our clients).

Urs E. Gattiker

Professor Urs E. Gattiker - DrKPI is corporate Europe's leading social media metrics expert (see his books). He continues to work with start-ups. Urs is CEO of CyTRAP Labs GmbH and President of the Marketing Club Lago, a member of the German Marketing Association (DMV).

17 thoughts on “Influence marketing experts’ top secrets

  • 26. May 2016 at 13:01
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    Ui, ich bin beeindruckt lieber Urs. Sehr cool. Freue mich, dass ich in der Liste mit auftauche 🙂
    Nur das mit der Selbstdarstellung klappt noch nicht so gut wie bei Donald Trump 😀
    I’m very amused.
    Und natürlich liebe Grüße 🙂

    “Wow, I am impressed, dear Urs.
    Very cool. I am happy that I also made the list, of course 🙂
    But the self-promotion thing I still fail to manage as well as Donald Trump seems to 😉

    I’m very amused.
    And Greetings 🙂 “

    Reply
    • 26. May 2016 at 13:39
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      Thanks for your praise Sabine, I appreciate it.

      Yes measuring this stuff is generally a real headache. In other words, I have a hard time finding people measuring influence properly so that one could reproduce their data, for instance.

      Influencer marketing: Style and substance over fashionability

      For instance, in 2014 Burst Media tried to measure it and did it again in 2015 (published in 2016 see below, company is now called RhythmOne).

      What is not clear is their their methodology. Earned media coverage is clearly a bean counting exercise if RhythmOne is to be believed.
      Accordingly, Facebook likes or comments as well as Tweets or Re-Tweets are counted. All count the same… and surprise, so does a blog entry or blog comment. Say again? Yes you read right… 1/10 second of effort is worth the same as several hours.

      That is like saying some scribble on a Stick-on note is worth the same as writing an article or even a book. LOL.

      In the report below, nowhere is the quality of engagement on the blogs of these influencers measured. It should also be compared to others in the same genre.

      You can download the report and have some fun browsing through it: Voodoo metrics that make me laugh

      So Sabine, I prefer your authentic dialog in your blog any time over this kind of bean counting the likes of people who will neither be influenced by an entry nor having read the content before liking it 🙁

      Please keep up the good work Sabine !!!
      Grüessli
      Urs

      Tak is cheap, show me the numbers first !!

      Reply
  • 26. May 2016 at 17:52
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    Thank you very much dear Urs. I will do my best to entertain my readers. But the most important thing you should not forget. The fun of it. And do not worry so much about SEO or ranking.

    Regards Sabine

    Reply
    • 26. May 2016 at 17:59
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      Dear Sabine

      You are so right. If you blog about style, fashion or tech or anything, some fun or enjoyment must be part of the task you do. Without some pleasure we gain from it it become hard, bothersome.

      And of course, depending on the focus of your blog and target audience, what content you provide and how much you go into depth is different. Blogging as a hobby or for fun is probably the most pleasurable thing you can do. Doing it for your job as I do …. well I just don’t blog about things I do not want to know more about. Hence, for me it is a learning process. I want to learn with writing each blog entry …. for my own benefit. Of course, this should also provide my target audience (corporate bloggers, PR agencies, etc.) with some added value.

      Not easy but we both try our best and you certainly have succeeded … chapeau.

      Grüessli
      Urs

      Reply
      • 27. May 2016 at 12:31
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        Lieber Urs, liebe Sabine, what a great read.

        It is a learning curve especially when it comes to online facts such as ratings, rankings, exposure.

        What struck me the most is the point about media coverage. Once you have broken through the glass things are coming to you. Plenty of followers. But what kind? Brands do not know how to deal with bloggers like smaller companies and I am not sure if their expectations do not aim a bit too high.

        They are “buying” credibility I have been working for very hard. If I keep posting about my travel destinations repeatedly I get them to consider. If I keep talking about a city they had never thought of I get them to consider it.

        Very often an agency will contact me offering ” exposure” in return. They get excellent pictures and a professional text plus my social media “exposure”.

        It does not look like a win-win situation to me.

        Keep up the excellent work Urs!

        Your article is profound yet so very well explained and written that newcommers will be able to get the hang of it!

        Best, Sabina

        Reply
        • 27. May 2016 at 12:41
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          Oh and totally forgot: happy to have made number 3 here! 🙂

          But I feel there is still a bit of a learning process ahead for bloggers and sponsored posts as well as brands choosing bloggers to collaborate with.

          Based on my experience, it appears that Belgian and Dutch brands are much more experienced regarding blogger relations and influencer marketing.

          To illustrate, I got an offer for a sponsored post a while ago for a Dutch cashmere label.

          The perfect example:

          1. they were wiling to pay for my work,
          2. the topic fit into my blog like a glove because I had talked about it, AND
          3. they had done their research and knew exactly what they wanted and who they were approaching (e.g., knew I had written about such things before and when)!

          Reply
          • 27. May 2016 at 18:19
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            Congratulations, Sabina

            3rd place in this ranking is a great start to even better things to come your way… 🙂
            It means you are doing various things write such as answering comments, having your content shared in social networks and so forth.

            I like reading the comments left by readers of your blog. The are witty, thoughtful and teach me knew things or show me another perspective that I may not have considered yet.

            For that I am thankful. Keep up the good work.

        • 27. May 2016 at 16:55
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          Dear Sabina

          Thanks to you and Sabine. Really interesting your thoughts above. You write:

          Brands do not know how to deal with bloggers like smaller companies and I am not sure if their expectations do not aim a bit too high.

          I think you could be onto something. I learned that you need to ask yourself, as a brand the following questions:

          1. What kind of blogger would we love to work with?
          2. Where and how can we find these bloggers?
          3. Is this our person. Does her style reflect our target audience? Does he engage readers…. please show me the numbers!
          4. How to we systematically select those we want to work with? What criteria do we use and why? Can we vet them down to about 10 bloggers?
          5. How will we approach the bloggers we love to work with? Will a staff member do it, the agency or whom?

          The above is hard work. We do find that a systematic evaluation process often results in a different set of blogs than brand experts wanted to choose first. Digging into the subject reveals that what shines is not always the best suited blog or person for a particular brand.

          Hence, reading the content in your blog is under point 3 above if not earlier. Point 5 will take time and once a blogger is on board, blogger relations is needed to keep the relationship flourishing. Only if the blogger feels appreciated for the work … it might work.

          Considering what is being spent for other marketing efforts including event sponsoring, paying a blogger fairly is a must. And no, Euro 500.00 is not reasonable. Quality work takes time and even if paid fairly, its cheap in comparison to paying an agency for a campaign.

          Sabina, Thanks for sharing this interesting stuff.

          Reply
        • 27. May 2016 at 17:33
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          Sabina
          Merci for your praise. You write:

          Very often an agency will contact me offering ” exposure” in return. They get excellent pictures and a professional text plus my social media “exposure”.
          It does not look like a win-win situation to me.

          There are two things that go through my mind:

          1. You liked this blog entry and yes so do I but it took me more than 10 hours to put together and replying to these great comments…. So offering a blogger exposure, whom are we kidding here?

          2. If we consider what it takes to do a study and write a corporate white paper that is not just marketing rubbish, the same applies to a blogger.
          Exposure is nice but I doubt that a blogger benefits as far as exposure is concerned. Exposure is fine, but it fails to pay the monthly rent.

          Generally, I have to point out to marketing staff from the brand that it costs X (salary) + Y (social security, pension contribution, vacation and sick pay) + Z (overhead such as office space, equipment, continuous education, conferences, admin help) etc. to make a living as a blogger.

          Put differently, employed people often think, what I get in my pay check is what the blogger needs if not less since I am better and my work is more important.

          So it takes some convincing to make clear that a salary might be less than 50% of what the blogger needs to make ends meet. Getting bookkeeping and admin help is what a one-person blog shop needs as well. The employed folks at the brands marketing department do sometimes forget this.

          This lack of understanding does not give the blogger the impression that the marketing counterpart appreciates her situation and values her work. But it can be done 🙂

          Reply
          • 29. May 2016 at 9:01
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            Sabina

            One more thing about Instagram. Just came across an article about “instagirls” where they talk about things I thought are interesting. This is especially so because it actually is another confirmation that not all is going right and those in the fashion industry are beginning to wonder, such as:

            – Kendall Jenn and Gigi Hadid – 72mio followers on Instagram, Tumblr, etc…. but apparently, fashion / power US Vogue style icon Grace Coddington feels carisma and substance is lacking as far as Kendall and Gigi go…. and trust…?

            – The industry pays up to $300,000 for a picture of these girls ….on their instagram account… for the brand, in comparison, AND, in comparison
            – US-Vogue charging $200,000 for booking a page for advertising

            – Some insiders feel, fashion is being sold out… apparently some insiders are not happy about this kind of overselling.

            Here is the 1.4MB big PDF File you can download Kendall Jenner and Gigi Hadid… 72 Mio fans but neiter charisma nor substance

            Weber, Bettina (2016-05-29) Das mit den “Instagirls” steht auf wackligen Beinen. “Viele Follower gleich viel Aufmerksamkeit” lautete bis anhin das Credo in der Modebranche. Jetzt ist man sich da nicht mehr so sicher. Sonntags Zeitung, S. 58. Retrieved online: http://blog.drkpi.de/wp-content/files/Sonntags-Zeitung-Das-mit-den-Instagirls-steht-auf-wackligen-Beinen-Kendall-Jenner-Gigi-Hadid.pdf.

            Interessant, die Experten der Modebranche haben das Gefühl es funktioniert nicht, wir habe einfach die Zahlen was die Mode-, Fashion- und Style-Blogs betrifft 🙂

  • 27. May 2016 at 8:00
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    Just today I read a great blog entry about how Porsche works with social media, influence and engagement.

    I left a comment here: https://www.audiense.com/interview-case-study-discover-the-instagram-driving-force-behind-porsches-slick-social-media-marketing-twitter-strategy/#comment-2697836589 (the post is worth reading, really).

    “Dear Andy
    This is a great post and I appreciate it very much. You quote Thorsteinsson as saying:
    “Looking at engagements-per-post helps tell us if our audience is connecting with that story.”
    … “We use tools that can measure the sentiment and also find influencers. Of course, we also take the time to look through all the comments to identify common themes and get additional insights from there.”
    …“… we have tools that analyse how the content performed, and also to monitor what our competitors are doing, which help us see where we can improve and identify strategies that work within our industry.” ”

    Of course, this got me to ask the following two questions in the comment left on Audiense’s story, such as:
    1. when is engagement satisfactory and when not?
    For instance, is 69 Retweets and 261 Likes for a Tweet satisfactory (to what standard) when you have about 1.3mio followers https://twitter.com/Porsche/status/735530881885065216 ?

    2. how do you identify influencers in social media… Same way as Revlon did with Chelsea King – see above=> see here: http://blog.drkpi.com/influencer-marketing-1/ ?

    It is easy to talk about influence marketing and engagement, but the devil lies in the details and specifics. In other words:

    – what is satisfactory performance, AND
    – how do you measure it to, in turn,
    – identifying those influencers?

    Below, see image of Porsche Tweet mentioned above.
    Is this kind of engagement on Twitter good enough for Porsche with 1.3mio followers?

    Reply
  • 28. May 2016 at 18:46
    Permalink

    A few thoughts about Snapchat (the photo-messaging app) with more than 100 mio daily active users.
    It has just raised $1.8bn to a total of about $2.16bn.

    Interesting is that it made just $59mio revenue at the end of 2015 (it hopes to make $250 to 350 mio in 2016). Not much for its investors. Fidelty (a fund manager) a major Snapchat investor wrote down the value of its investment in Snapchat by 25% in the 3rd quarter of 2015.

    WHAT DOES THIS MEAN?

    Frankly I am worried that this unicorn (these are private companies worth more than $1 billion) as well as Twitter will have a difficult time to be still with us in 5 years. Burning too much money too fast…. while revenues (not even their growth) do not justify these valuations.

    I wonder if I invest as a brand in these (e.g., posting, engaging with fans, etc.), will they be around in a few years or close their virtual doors…. making me loose my content?

    READ MORE:
    Kuchler, Hanna (27 May, 2016). Technolkogy. Snapchat overcomes scepticism to raise $1.8bn in funding. FT, p. 15. Retrieved, May 28 from http://www.ft.com/intl/cms/s/0/68e551b6-234e-11e6-9d4d-c11776a5124d.html

    Snapchat generates revenue from ads, including photo & video ads that appear in „stories“, series of snaps that last 24 hours. Sometimes it splits revenues with publishers.

    Reply
  • Pingback: JK Rowling & Donald Trump: Definitive guide for influence marketing | DrKPI

    • 17. January 2017 at 11:29
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      Thanks dear Prateek
      That information is helpful..

      Things change over time and sometimes we fail to record it ourselves.
      In such cases it is very helpful to have people like you point out our errors and helping us fix these.

      Your site is very interesting and I hope you make soon available an e-mail newsletter so I can subscribe to it and get all new posts this way.

      What you think?
      Cordially
      Urs

      Reply
      • 17. January 2017 at 23:55
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        Thank you for the kind words. I am setting up a newsletter soon 🙂

        Reply

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