The Marketing Economy

The long term outlook for influencer marketing

April 22, 2018 by Susan Getgood Leave a Comment

In a bid to demonstrate a shift in its behavior, Facebook implemented restrictions to the APIs for both Facebook and Instagram on March 30 — APIs that many third-party developers, including players in the influencer marketing industry, were relying on in order to support their products.” – MediaPost

Some are concerned that this restriction on data will negatively impact the third party partners. In my opinion, whatever short term impact this restriction on data may have on measurement and influencer marketing platforms, the long term outlook for influencer marketing has never been better. Increased privacy regulations like GDPR are creating a positive situation that will far outweigh the short term issues that the current Facebook changes present.

Here’s why:

Audience targeting is about to undergo changes that will likely result in higher CPMs. The requirements for managing consent will add to the cost basis, thereby increasing ad rates. Some forms of ad targeting may even become too cost prohibitive.

This opens the door just a bit wider for influencer marketing and branded content. They rely on context and aggregate audiences, which are not impacted by privacy regulations. They also have nearly always been more costly than programmatic media and Facebook boosts. As the cost gap narrows, more budget should shake free for human-centered forms of marketing.

AdWeek certainly thinks so:

Working with social media influencers is another important model for marketers to consider in this shifting landscape. The assumption by many marketers about working with influencers is that they are meant for one-off projects rather than as parts of a wider campaign strategy. Yet, the brands who see the greatest success with influencer marketing take a longer-view approach, creating a steady connection with their intended audiences.”

So do I.

Is Facebook vulnerable?

April 21, 2018 by Susan Getgood Leave a Comment

For the first time since its very early years, Facebook is vulnerable. The Cambridge Analytica mess highlighted an important but oft-overlooked fact about Facebook’s business model. Facebook’s business is data, monetized through advertising, not community or social networking. Social networking and community are merely the means by which it gathers and aggregates data and delivers advertising.

This was easy enough to forget in the feature wars and fight for online social dominance, but the public now is generally far more aware than ever that if you aren’t paying, you are the product. It’s also now clear that Facebook’s business models skirt very close to violating consumer privacy, if not outright violations. When working as designed, by the way, not through some breach or hack into the system.

While Facebook has announced changes in the face of governmental scrutiny in the US and Europe following the Cambridge Analytica revelations, the response still seems pretty superficial. Lipservice, not customer service.

As a result, while I wouldn’t sign a death certificate for the platform any time soon, consumer trust in Facebook has seriously eroded, and it isn’t doing such a terrific job at getting it back. At least so far. I’m not sure they can. So many of the problems are built into the very infrastructure. This leaves an opening for competitors.

Others agree.

When asked by NY Mag whether a new platform could get a seat at the table, Dan McComas, former SVP of product at Reddit, said:

I think it’s absolutely possible, but it takes a couple of major factors. I think a start-up needs to think about the monetization and how it can work with the users instead of against the users. I think they need to figure out the right funding mechanisms and incentive structures that also work toward the users. I think they need to have the right product team in place to focus on users.”

Angel investor and entrepreneur Jason Calcanis has put some skin in the game, announcing via his newsletter this weekend a competition called the LAUNCH Open Book Challenge to find Facebook’s replacement. Seven winners will receive $100K investments from the LAUNCH Incubator. In his newsletter, he stated he is looking to fund a social network that is good for society, that will:

– Respect and protect consumer’s privacy
– Respect and protect our democracy from bad actors
– Respect and protect the truth, by stopping the spread of misinformation
– Not try and manipulate people by making them addicted to the service
– Protect freedom of speech, while curbing abuse (not easy!)”

If you’d like to follow along, or think you might like to enter, details are at openbookchallenge.com. The competition is open to existing projects as well as new ideas/paradigms, but ideas alone are not enough. The main criteria for selecting the semifinalists and the eventual winners will be ability to execute.

Reddit, Snapchat and perennial second place finisher Twitter are also in the hunt, but they may have too much baggage (and their own privacy violations) to prevail.

Something will succeed Facebook. It’s not a matter of IF, only of WHEN. Right now, WHEN feels a whole lot closer than it has before.

Facebook has no friends

April 12, 2018 by Susan Getgood Leave a Comment

Mark Zuckerberg just spent two days in front of Congress, explaining, justifying, defending his company and its business practices.

I continue to find it fascinating that the company that develops the tool that so many brands, individuals and even public entities rely on to build and nurture their communities, neglected to foster its own. Facebook has no friends. We use it, we run our ads on it, we publish our news on it. But we don’t like it.

Which is why, now in its moment of need, Facebook is more or less twisting in the wind. Other publishers, other platforms have committed similar offenses. But in the court of public opinion, Facebook will pay for the crime.

Contrast this to Apple which as a company is equally as arrogant. I say this typing on one of my 5 Apple devices so know that I have drink the Macintosh-flavored Koolaid deep. Apple however always — well before social media — understood the value of community and built its marketing strategy from the get-go around cultivating evangelists. We love the brand. So much so that we forgive an awful lot. Lousy overpriced computers in the late 90s. Batteries that drain far too fast. And we pay a premium to use the thing we love.

It has always been true that if you are not paying, you’re the product.

We now are starting to understand the true cost of using Facebook.

This is the opportunity for a viable replacement to make its move, something that a year ago, I would have said was foolhardy. And no, I am not predicting the fall of Facebook. That is ridiculous. But it is vulnerable.

Reddit, long mostly off limits to commercialization, has recently relaxed its stance about corporate conversation on the platform. Ditto Pinterest, which has extended the hand of friendship to publishers of late. Snapchat, still not dead even though Ms. Jenner claims to no longer use the service. There is a little more room at the inn right now for smart players that figure out how to reconcile the competing demands of commercial results and consumer privacy.

We are finally, after 20 years, at a point where consumer data privacy in the US matters. To everyone, not just a handful of folks. We’ve also realized, I think, that even though regulation may stifle innovation, the cost of not protecting privacy through regulation is too steep. I personally wish we could rely on tech companies to police themselves and protect their consumers. Cambridge Analytica, and all the other extant examples for which the Facebook/Cambridge Analytica mess also serves as proxy, proves that we cannot.

In Europe, privacy is considered a fundamental human right. Its data privacy law, the General Data Protection Regulations, codify consumers’ ownership of their personal data as well as the obligations companies that use or control consumer data have to that consumer.

Our attitude toward privacy in the US is a little different. It is largely viewed in terms of individual rights vis a vis governmental authority. It is not a fundamental right, and our privacy laws such as they are, reflect that.

Nevertheless online data regulation in the US now seems inevitable. Senators Markey and Blumenthal have already drafted a bill, and these are smart guys who have been around the online privacy debate for years. Markey in particular. They know the dangers of over-regulating technology.

Interesting times.

Yes, my friends, influencers do have influence. Here’s why we’ve gotten confused.

March 3, 2018 by Susan Getgood Leave a Comment

Earlier this week, my friend Toby Bloomberg tagged me into a conversation on LinkedIn about evaluating influencers for branded content programs, spurred by a Medium post that argued influencers don’t really have influence.

My comment got too long. What a surprise! Not. So I am posting it on the blog in its entirety. For context:

Influencers have influence. Ultimately, influencers are your customers. They buy (or don’t) your products and services, and they talk to each other. Some influence a few, some influence many. But there is always value in customer -centric marketing.

The issue here is that we collectively have done a few things that contribute to the perception that influencers don’t have influence. I could write a book on this, and perhaps I should, in between trying to re-establish my consulting practice once again after 7 years inside.

First, we talk about one group, influencers, which is misleading. There are really multiple subgroups, each of which has different characteristics, and should be folded into the marketing plan with different strategies and tactics. Microinfluencers are your customers who individually do not have tons of followers, but in aggregate can create a volume of earned media. Mid-tier content creators/bloggers are also your customers, but they have built a larger following on a blog or social platform, and can be tapped into as content producers for both the endorsement value and their distribution channels. Celebrity influencers are much more about their scale, and somewhat less about their role as your actual customer.

Second, we need to activate these different types of influencers in ways that match their reach, influence and status as your customer. The same strategies don’t work across the board. We should start with our business objective, tap into the influencer population that will best help achieve that objective and the define a measurement strategy matched to the program. We also need to communicate those objectives and expectations clearly to the influencers we work with. It is OKAY to ask someone you are compensating to deliver a certain result. Our clients ask it of us. We should ask it of the people we work with. Not necessarily with crowdsourced strategies tapping into hundreds of microinfluencers, but certainly for content programs with mid-tier folks and celebrities. You cannot get mad at non-delivery if you don’t set an expectation.

Third, we need to ground our content programs in relationships with our influencers. After all, they are our customers. There are no shortcuts to relationships. There is no tool, no database, no algorithm that can substitute for the relationship. Use automated tools to get started, to manage content production, to monitor and measure results, to understand the performance of your influencers. But don’t expect that you can define a target audience, search a database for influencers that match the target, or whose audience does, or both, hire them to do something without the due diligence of getting to know them, and then hope for the best. If you know the influencers, you’ll know whether and where they have influence.

Finally, the original article was interesting in that it conflated two related but different marketing strategies, influencer marketing and thought leadership, in an attempt to make the case for thought leadership over influencer marketing. You can certainly tap into a customer (influencer) population as part of a thought leadership strategy, but by and large, thought leadership is about conveying ideas and building an expert reputation for the individuals and their organization, as a conduit to sales. Expertise does matter, and we may reach out to other experts in our field, with greater or lesser degrees of influence, to support and distribute our idea, but it is not the expertise of the customers. It is that of the brand and its representatives that is the focus.

Each strategy, influencer marketing and thought leadership, has its place in the marketing mix, and we don’t have to pick between them.

–

Agree with my ideas, but not sure how to get started? I can help with everything from strategy development and content creation to influencer, digital and social marketing, performance audits and presentation decks. Even better, the first hour is free. Email sgetgood@getgood.com to book your free consultation. I’ll give you some thought starters during our conversation, and we can go from there.

The silver lining in the GDPR: An opportunity for permission-based marketing

February 26, 2018 by Susan Getgood Leave a Comment

The GDPR (Global Data Privacy Regulation) is a European law intended to restore control of personal data (what we usually refer to as PII, personally identifiable information) to the consumer. Under GDPR, businesses must comply with a set of strict stipulations regarding data collection and usage that require consumer authorization, both for collection and the intended uses. For more background on the law, AdWeek has a nice piece summarizing the regulation from the perspective of advertisers, agencies and tech companies. and the EU has an excellent interactive infographic.

GDPR changes the worldwide advertising playing field. Even though it is a European law, compliance will be expected from any company, anywhere, that might have access to an EU citizen’s private data. On the technical side, which I am not going to cover here, the data management platforms and ad tech companies that support advertisers, publishers and the programmatic media infrastructure will have to manage permissions to ensure that no one is using data in an unauthorized manner. All data – first, second and third party. It’s a huge effort. Complying with the provisions of GDPR is table stakes. You have to do it or risk pretty hefty fines.

Brands and publishers will need to be transparent about data collection and use. In order to obtain, and retain, permission to use customer data to target, retarget, market, they will need to demonstrate value for their use of this information. As perceived by the customer. This is the opportunity and the silver lining to GDPR. It is now far more likely that brands and publishers will invest in innovative permission-based marketing to differentiate themselves from the pack.

Beyond table stakes

We have permission, as marketers, to go beyond a transaction based commodity marketplace driven by programmatic advertising and ever more creepy targeting and retargeting. A marketplace, by the way, in which media companies risked marginalization if not extinction as brands began to realize they could create content and target it to their audiences with direct buys through Google and Facebook, without the intermediary and mark-up of a publisher. As I commented last fall:

… for publishers, re-selling each viewer at a slight mark-up for what it cost to acquire that page or video view is not sustainable. Unless you add measurable value to that view, such as increased conversions, the pyramid will eventually collapse. Brands will figure out that they can buy those views, that awareness, cheaper if they go direct.

We now can go beyond the table stakes of privacy regulation, and build the permission-based proprietary audiences that will deliver true advertiser and consumer value.

What are we delivering to the reader/viewer/listener in exchange for the permission to use the data that we seek? Is it truly differentiated from the competition? If not, think some more. You must offer unique value to make it worth giving YOU the permission to store and use personal data. This is just as true with a subscription offering. Subscriber data is still used to market the audience to advertisers, and just as subject to GDPR. The paywall only increases the demand on content value.

This is why I advise:

Make your voice matter. If your publication/channel is the go-to source for the audience, your editorial voice becomes relevant again. Even though the brand can buy your audience elsewhere, it cannot buy your editorial endorsement anywhere but from you.

Other things to think about:

Community – Building a community around your content through exclusives, discounts on services, events (on and off line). Digiday is an example of a publisher creating a community of senior marketing execs around a paywall offering.
Infuse your content with your customer — whether sponsored content created by influencers, or crowdsourced reviews or live stream events in which they can participate.
New content streams. Go beyond digital and video, and look at podcasts and events as ways to lock in your unique value, your unique audience. Vox Media and Crooked Media are two examples of firms successfully exploring new content streams.
Newsletters are the ultimate permission-based marketing tool, so don’t use yours just as a billboard for content that is consumable on your site. Add additional value, shoppable links and images, even original content that is only available in your newsletter.

Your objective is to create an ecosystem of value in which your user (or prospect if you are a brand) regularly extends and renews permission to use her/his private data. You still have to abide by the GDPR rules, and be transparent about how you use data, whether you share it with others, and so on, but provided you don’t betray the trust of your reader/viewer/listener by breaking those promises, at the end you will have something far more valuable than retargeting data.

You’ll have a loyal audience. And that can’t bought. It can only be earned.

—