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Influencer Marketing: Definition

Updated on March 9, 2017
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Heidi Thorne is a business author with 25 years experience in marketing and sales including a decade in the hotel and trade show industries.

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Just as native advertising is another term for "advertorial" content, influencer marketing is a new term for celebrity advertising, which has been around for decades. But there are twists that make it a new, and challenging, tool in a company's marketing arsenal.

Today's version of celebrity advertising isn't just for movie stars. Now stars can be bloggers or social media sensations on the likes of YouTube, Instagram and Facebook. These Internet-era celebrities can sway the thoughts and buying power of sometimes thousands (even millions!) of followers with a single post or photo. The good news for marketers is that these new celebrities can often be engaged for a lower cost than traditional stars ... and, sometimes, with greater impact.

Influencer marketing is both marketing through and to influencers. Sponsors often have to sell influencers on trying and/or promoting something to their audiences. Money, free products, discounts, VIP treatment, complimentary event attendance or other special perks are often offered to these folks. Depending on the arrangements of these relationships, these incentives may be offered with or without influencer commitment to make mentions or do reviews on their various channels.

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How to Find Influencers

Being active in relevant online and offline communities and regular reading in one's industry should make finding influencers relatively easy. However, given the vastness of the Internet and the growing interest in targeting less visible micro niche markets, marketers may wish to consider hiring advertising or PR agencies dedicated to identifying and recruiting influencers.

Creating Buzz or Buyers?

Influencers may have large audiences, but may not have any real talent or provide any value other than creating buzz. (I can easily come up with examples of this sort. I'm sure you can, too.)

Sponsors would be well advised to look beyond the large number of followers an influencer has. As with most everything, quantity does not always equal quality or applicability. Determining why followers follow the influencer is the first step to determining if a certain person is a good fit to represent a brand.

Finding out if the influencer uses or supports the brand is also important to be authentic. Nothing can destroy a brand quicker than when the public learns that a hired spokesperson is not a genuine user, may even be an adversary of the product or service, or has some conflict of interest relationship with the sponsor.

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Unprofessional

When the Internet gave everyone a megaphone, it allowed ordinary people to become online and international superstars. Traditional celebrities, such as movie stars and pro athletes, often hire agents and other professionals to manage their image, activities, opportunities and contracts. Regular people usually don't hire these professionals and can innocently (or not so innocently) get themselves into a myriad of issues which can jeopardize their income and futures. Sometimes it might be through overstepping the boundaries of reason while (over)exercising their free speech rights. In other cases, they may not realize that their celebrity status now puts them in a very public "fish bowl" existence where their every move may be watched. What behaviors may have been acceptable in their former lives can now be the source of ridicule or loss.

As with celebrity advertising, if the influencer loses favor, so does the brand being promoted. This has happened over the years with a number of traditional celebrities. So sponsors should seek legal guidance on developing personal conduct and performance policies to help protect their interests in the event of an influencer's transgression or non-performance.

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Problems with the Acronym Agencies

In earlier days of celebrity advertising, the audience knew, often without any doubt, that it was advertising. Today, it can be very difficult to determine if influencers are actually promoting because they genuinely believe in what's being featured, or if they were compensated to do so. This is especially problematic when it comes to blogging and social media. Many influencers are given free products or other compensation in exchange for talking about a product or service.

The Federal Trade Commission (FTC) in the United States got wise (and will likely continue to get wiser) to these arrangements. FTC guidelines require that any compensation needs to be disclosed, including free products, received in exchange for mentions on blogs, videos, podcasts, websites or social media. See the FTC.gov website for current guidelines and requirements.

How does this affect influencer marketing? Influencers need to be very careful about disclosing their relationships with sponsors. Sponsors also need to be monitoring their influencer's activity for compliance. Sponsors would be well advised to seek legal advice on developing contracts and requirements for influencers they engage.

And the "acronym" government agency concerns don't stop there. Two others in the U.S. besides the FTC that both influencers and sponsors need to be aware of are the FCC (Federal Communications Commission) and the IRS (Internal Revenue Service). The FCC might be a concern if the influencer or sponsor violates regulations for such things as profanity, email use, etc. Plus, any compensation paid or received needs to be reported on tax returns and other documents (e.g., 1099 forms) to the IRS.

Countries outside the United States may have additional or differing regulations, disclosure and revenue reporting requirements. So both sponsors and influencers should seek guidance from appropriate legal and accounting professionals on all issues dealing with governmental agencies, both in the U.S. and abroad.

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Unofficial and Uncontrolled Influencers

Internet users that talk about a brand or company without any official connection or compensation are even more of an issue with this type of marketing. These people might be bloggers or active social media users with substantial followings and fan bases. Or they may be active participants on commerce and review sites such as Yelp, Amazon or Angie's List.

On the plus side, unofficial influencers who speak positively about a company or its offerings can be a virtually no cost marketing boost. However, because they have no contractual or official connection to a company, what these unofficial influencers put out into the world is difficult, if not impossible, to control. Their glowing or stinging commentary can triumph or torpedo a business' reputation in a hurry. Even worse is that some of the folks are trolls who spread negativity for the sport of it.

While controlling all Internet chatter about a company or its brand is not even possible, marketers should monitor how they are being perceived on relevant sites. Seeking the help of outside professionals and attorneys who are specialists in online reputation management could be worth considering.

Disclaimer: Both the publisher and author have used their best efforts in preparation of this information. No representations or warranties for its contents, either expressed or implied, are offered or allowed and both parties disclaim any implied warranties of merchantability or fitness for your particular purpose. The advice and strategies presented herein may not be suitable for you, your situation or business. Consult with a professional advisor where and when appropriate. Neither the publisher nor author shall be liable for any loss of profit or any other damages, including but not limited to special, incidental, consequential or punitive, arising from or relating to your reliance on this information.

© 2017 Heidi Thorne

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    • FlourishAnyway profile image

      FlourishAnyway 2 months ago from USA

      Between YouTube and Twitter it's an absolute zoo where anyone can express just about anything and get themselves and a product in big trouble. You highlight so many of the potential ways this can go awry. As I was reading I was thinking of examples of official and unofficial spokespeople who have made PR mistakes and blown it. Very interesting topic.

    • billybuc profile image

      Bill Holland 2 months ago from Olympia, WA

      Great information, Heidi, something I had not thought of, and shame on me, a Marketing major, for not. Thanks for the food for thought, and Happy Tuesday to you.

    • heidithorne profile image
      Author

      Heidi Thorne 2 months ago from Chicago Area

      Well, billybuc, when you and I were studying marketing, influencer marketing and the Internet did not exist. So we're all trying to catch up. Glad to provide a thought prompt. Thanks for stopping by and have a terrific Tuesday!

    • heidithorne profile image
      Author

      Heidi Thorne 2 months ago from Chicago Area

      Hi Flourish! I think "zoo" is, indeed, the proper way to describe this online marketing landscape. So many strange creatures. There are a couple of recent social media gaffes that prompted me to write this. One was just inexcusable and it cost everyone involved. Thanks for adding that very appropriate observation to the conversation! Have a beautiful day!

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