Influencer marketing and programmatic: A marriage of convenience

In the media world, not a week goes by without an article or discussion on the waning appeal of traditional media and the consequent flow of ad dollars to digital. But let’s set that aside for a minute because the bigger battle right now is between digital channels. More specifically, it involves programmatic display advertising and influencer marketing. 

Marketers have finite budgets, and the question is whether to allocate precious digital ad dollars to programmatic advertising, or to influencer marketing? At first glance, the need to distinguish between online channels may seem trivial, yet the reality of the bang you get for your buck is stark. The answer lies, perhaps, in a marriage between the two.

In part, this is because the influencer marketing landscape has undergone huge change since it first came to prominence in 2014. But we think it has much more room to grow, not least because some estimates forecast the market will reach US$5 billion by 2020, from around US$1 billion today.

The benefits of KOL marketing

The influencer marketing business has come a long way. From just gifting products, to brands paying influencers to post, to always-on influencer programmes the industry has evolved significantly. Today, influencers create multiple images for a brand to sophisticated briefs that include editorial and video as well as photos.

Display advertising, on the other hand, aims to put relevant content in front of its target audience on the websites they visit. In theory, this should be effective. The problem is the content tends to be developed by marketing teams or ad agencies far removed from the intended audience. What is more, the sheer volume of display advertising means consumers are now much more savvy at cutting through the noise—and simply ignoring display ads. The outcome is that the clickthrough rate is extremely low. The average CTR across all display ad formats is just 0.05 percent. Making matters worse is the chronic and costly issue of ad fraud.

In contrast, influencer marketing engagement is 40-fold higher. Away from ad blockers, with content designed specifically for audiences by the people who actually use your product or service and promoted by people whose opinion they trust, engagement rates for influencer marketing sit at an average of 2 percent.

Bringing programmatic and influencer marketing together 

All this technically tips the balance in favour of influencer marketing. However, it is my view is that the battle between these digital channels be seen less as a winner-takes-all, and more merge and integrate. This is because display advertising is a ubiquitous part of the digital advertising ecosystem, particularly in Asia-Pacific where consumers are more receptive to ads and less protective of their data.

Incorporating influencer marketing assets into programmatic advertising benefits both channels—giving automated ads a creativity boost, while influencers’ posts reach beyond their own blog or social channel—resulting in much higher engagement and CTR. Indeed, recent data from Facebook shows that the fastest growing advertisers on the platform use more than 10 creative assets per campaign, leading to a five-fold boost in results.

The blending of the two emerged in the US last year as agencies teamed up with ad buying platforms such as Google’s DoubleClick to offer influencer marketing contracts. It won’t be long before such partnerships happen in Asia-Pacific, too. We are already witnessing influencers’ assets being re-purposed into paid Advertising, eDM and—even—display advertising efforts.

The brands that already use influencer marketing are reaping the rewards. Take the Swedish watch brand Daniel Wellington. The company went from a standing start in 2011 to US$220 million in revenue by 2015 in large part thanks to intelligently leveraging the power of Instagram and the judicious use of influencers. From a social-only presence, the brand now has retail stores across the US and even the UAE.

As we look forward, we see this sector maturing as a serious advertising force and one that will transform programmatic display in brands’ minds. The social-media guidelines issued by advertising standards authorities in America and Singapore (on disclosures of commercial relationships, for example) demonstrate what a potent force it is. Regulation can only help boost legitimate influencers, and bring increased credibility and transparency to the industry.

As such, influencer marketing will become even more sophisticated, with corporates using this new workforce to outsource creativity, develop assets and help define a company’s social presence and strategy. In this competitive digital environment, influencer marketing combined with programmatic will help brands come out on top.