The Rise and Importance of Micro-influencers
Influencer marketing is getting more and more important to businesses today. The Influencer Marketing Hub, which represents 3000 marketing agencies, brands, and other relevant professionals, states that this industry is set to grow to approximately $24 billion by the end of 2024. According to them, “Nearly 1/4 of respondents intend to spend more than 40% of their entire marketing budget on influencer campaigns.” Similarly, a 2022 Nielsen study showed that 92% of consumers trusted earned media (like influencers) over other forms of advertising. This correlates to the rise in 300 million creators worldwide—according to Forrester—that set trends and shape consumer’s purchase behavior. Influencers allow consumer goods businesses to harness that cultural capital to reach and engage their targeted audiences in a way that is authentic to their end-customers. Influencer marketing not only drives brand awareness, but also can be a key digital channel for sales and revenue, as well as loyalty and building out trusted recommendations.
The influencer industry is now maturing to a state where businesses must consider how to maximize the ROI of their influencer marketing campaigns. This is spurring the rise of micro-influences in the consumer goods space. Whereas macro-influencers may have millions of followers, micro-influencers (less than 100k followers) tend to have more engaged audiences that connect with them on a deeper level, resulting in a greater feeling of authenticity among consumers. They often specialize in specific niches, which allows a brand’s messaging to connect with highly relevant audiences. This genuine rapport makes their recommendations feel more personal and relatable, increasing the likelihood of purchase.
There are additional benefits of micro-influencers:
Topics matter: Micro-influencers are topic-forward, connecting with their audiences about (sometimes) very specific topics. Working with micro-influencers ensures that companies are reaching these niche audiences that talk about your brand’s topic, ensuring that all content is highly relevant. Ultimately, businesses should focus more on what an influencer is talking about versus who that influencer is.
Higher engagement rates: Studies consistently show that micro-influencers enjoy engagement rates that are significantly higher than those of macro-influencers. Users are more likely to trust those niche influencers, and therefore are more likely to comment, engage, and enter a business’s funnel. This translates to better brand visibility and a more receptive audience.
Lower costs: Working with micro-influencers is generally more budget-friendly. Brands can allocate their resources to a wider range of influencers, expanding their reach and diversifying their audience. Therefore, they can effectively saturate their target audience, as well as have the flexibility and low-risk to test new audiences.
Improved conversion rates: The authentic connections forged between micro-influencers and their followers often lead to higher conversion rates. When recommendations come from trusted sources, consumers are more likely to make a purchase.
There are some considerations when shifting from macro- to micro-influencers, namely the cost to companies to manage more influencers, posts, campaigns, and metrics to report on across each. Influencer marketing solutions will soon become a requirement for companies to grow, scale, and optimize their influencer programs. These software tools help streamline the process of onboarding, managing and reporting on influencer campaigns, thus helping brands optimize campaigns and achieve better results. A key value of these platforms are their ability to measure the performance, compare, and optimize campaigns.
When launching and scaling an influencer marketing program—whether macro- or micro-influencer—it's critical to easily understand the acquisition cost of each individual influencer. This data is what unlocks the ability to have a programmatic level of continuous optimization. The insights and detailed analytics help businesses understand the effectiveness of each influencer through comparison of their engagement and conversion rates to understand their true impact, and not just vanity metrics like their number of followers.
This continuous improvement becomes even more important when utilizing micro-influencers due to the number of creators a business would be working with. Thankfully, teams do not need to rely on Excel spreadsheets for this, and there are tech solutions to help manage the creatives themselves, but also the analytics, reporting, and optimizations.
For example, one of Silver Birch Growth’s Partners helps customers manage their influencer programs. Specifically, they help connect marketers with real-time feedback on the performance of their influencer campaigns, allowing them to adjust your strategies for efficiency while maximizing conversions. In the case of SBG’s partner, their clients can effectively stack rank influencers while discontinuing content and messaging that did not resonate with customers, and quickly testing new influencers. Clients can also use these insights to drive customers through their marketing funnel through retargeting customers that entered into the top of the funnel with repeat ads from those influencers. SBG’s partner has found that there is a 25% increase in conversion propensity through this strategy. This then cuts the costs of conversions, CPAs, and leads to better acquisition costs.
Connect with Silver Birch Growth if you’re interested in learning about how you can optimize your influencer CPAs.