“There will always be people to guide and help inform our decisions”: The state of influencer marketing in New Zealand

Are you an influencer?

According to Nielsen, 581,000, or 14 percent, of Kiwis have an influencing factor (Nielsen Consumer & Media Insights, Q3 18-Q219, Base:  All People 10+). This means others take their opinions seriously and friends will seek out their advice before any major purchase.

Are you influenced?

The same Nielsen research says 1.95 million, or 46 percent of Kiwis are influenced by their family, friends, or celebrities when it comes to their purchase decisions or taking more notice of a product.

And it’s not just Kiwis of today who are influenced as The Social Club co-founder and chief executive Georgia McGillivray says influencers have always been around.

In fact, she goes as far back as royals being painted wearing the latest fashion and accessories.

“Then there were billboards with Britney spears drinking Pepsi, and then David Beckham was in an ad on TV. And now, within the last five to 10 years, the internet has allowed for a new wave of influencer – the social influencer.”

She says the internet has allowed for the first wave of influencers and thought leaders who aren’t famous outside of the internet

“It can be the girl who lives next door with 5,000 followers who is a vegan baker or the guy who skateboards with 10,000 followers on YouTube.”

No wonder The Social Club has a community of over 9,000 influencers across New Zealand and Australia.

The Social Club was founded by McGillivray and Justin Clark four years ago when they returned to New Zealand after working in agencies abroad.

Overseas they’d seen influencer marketing grow from being just a buzz word to a significant part of brand campaigns while back home, it was still an under-developed marketing channel.

The Social Club was their solution, launching like Tinder but for influencers and brands to partner up according to an influencers’ following demographics.

McGillivray says while that made influencer marketing accessible, but it soon found there was a missing piece – people wanted strategy.

“They wanted hand-holding and account managers,” she says, so the agency responded by increasing its offer to become a full-service, results-lead influencer marketing agency.

As well as helping pave the way of influencer marketing in New Zealand, this year, The Social Club released ‘The Ultimate Guide to Influencer Marketing in New Zealand’, a whitepaper the growth of influencer marketing and where it’s going.

Its creation is the result of gathering data from more than 3,000 of The Social Club’s campaigns as well as surveys with agencies, brands and influencers in New Zealand gathering their expertise and predictions on the industry.

As well as showing how The Social Club’s influencer community has doubled between 2018 and 2019, the whitepaper breaks those influencers into four categories.

They are macro influencers (50,000 + followers), influencers (15-50,000 followers), micro influencers (5-15,000 followers) and nano influencers (1-5000 followers).

McGillivray says there’s actually a fifth category – celebrity – but with those influencers having over 1 million followers, they don’t really exist in New Zealand.

Those nano and micro influencers make up more than half of the industry and McGillivray says they have always been The Social Club’s strategy. This is because those influencers’ followers are local and much less removed – they could even be friends of friends, McGillivray says.

It’s this reason why macro influencers aren’t performing like they used to. While the whitepaper credits them for playing a major part in attracting larger, well-known brands to invest in influencer marketing in New Zealand, McGillivray says they have becoming saturated, with some working with up to 30 brands a month.

This oversaturation can risk the authenticity of campaigns because they’ll end up promoting with brands that don’t share their same values.

“If a vegan baker goes to promote McDonald’s they are going to get slammed,” McGillivray says.

Authenticity is key

But that’s not to say all influencers are getting slammed. McGillivray says authenticity is one of The Social Club’s biggest values and with this has come brands building long-term relationships with influencers as ambassadors.

According to the whitepaper, long-term partnerships increase trust and authenticity in the campaign so it’s no surprise 52 percent of surveyed brands are planning to adopt the trend in 2019.

Alongside this, the average campaign spend is also on the rise, with the average campaign spend grew from $6,600 to $11,700 in 2018 – equivalent to 77 percent growth. And in 2017, spend grew 80 percent.

With growth like this, the whitepaper predicts the average campaign spend in New Zealand will exceed $20,000 in 2020.

And widening the lens to the rest of the world, the global influencer marketing industry is predicted to be worth USD$6.5 billion by the end of this year. That’s up from less than USD$2 billion in 2015.

Seeing results

So what’s contributing to this growth? Have influencers become more expensive, or are brands seeing it as a worthwhile investment?

From The Social Club’s perspective, McGillivray says it’s a case of marketers seeing the results of influencer marketing and increasing their budgets.

“We’ve seen some of our brands work with 15 influencers a month and then move to 120 influencers. That’s not an increase in rate, it’s seeing the results.”

Backing this up is the findings that 49 percent of surveyed brands intend to increase their influencer marketing budgets this year.

Meanwhile, 24 percent of surveyed brands intend to keep their influencer spend consistent and just three percent plan on decreasing it.

That three percent who plan on decreasing their spend is reflected in the three percent of surveyed marketers who said influencer marketing is “not very effective”.

Showing more affiliation to influencer marketing, 14 percent said it was “slightly effective” and 28 percent called it “effective”.

And with 55 percent calling it “very effective”, the whitepaper found more than 80 percent of brands agree influencer marketing is “effective” or greater.

Looking further into this, the whitepaper also shows where influencer marketing’s effectiveness lies and reports ROI is 11 times higher than other forms of digital marketing.

The key stats show 90 percent of influencer marketing is effective for generating brand awareness, 69 percent is effective for boosting sales, and 50 percent of influencers received double the engagement of brands.

Piece of the pie

This spend on influencer marketing comes from varied portions of marketers’ budgets as the whitepaper also looked at the percentage of marketing budgets brands intend to put into influencer marketing in 2019.

Of the surveyed marketers, 60 percent said their spend on influencer marketing represents between one-10 percent of their marketing budget, while 14 percent reported spending 10-20 percent of their marketing budget on influencer marketing, and 20 percent spend 20-30 percent of their budget.

Only four percent said 30+ percent of their marketing budget went to influencer marketing.

Overseas, the growing spend on influencer marketing was also found in The State of Influencer Marketing 2019: Benchmark Report for Influencer Marketing Hub. It surveyed 800 marketing agencies, brands and other relevant professionals to find 63 percent of brands that do budget for influencer marketing intend to increase their spending over the next 12 months.

Another 17 percent said their budget would remain the same, while 15 percent weren’t sure and only five percent planned to decrease it.

Looking at how that influencer budget fits into the total marketing budget found nearly half of brands intend to spend at least 20 percent of their marketing budgets on influencer marketing.

Breaking that down, 11 percent of brands intent to allocate more than 40 percent of their marketing budget to influencer marketing this year, while 12 percent will allocate 30-40 percent of their marketing budget.

Meanwhile, 24 percent will allocate 20-30 percent of their budget and 19 percent will allocate less than 10 percent.

Awareness on the rise

Alongside marketers’ awareness of influencer marketing, growth of the industry locally is also evident in the number of monthly searches for the term ‘influencer marketing’ on Google in New Zealand.

Back in 2016, the search term was rarely used more than 25 times a month, while this year, some months have seen it reach 100.

But does this raised awareness of influencer marketing mean audiences are becoming aware of it? And how does that impact its effectiveness?

To these questions, McGillivray once again points out the importance of creating authentic connections between brands and influencers because audiences are savvy and they know a transaction has taken place.

Making that transaction more transparent are the Advertising Standard Authority’s (ASA) Code of Ethics stating that “all advertising content controlled directly or indirectly by the advertiser should be identified as such, regardless of the medium used to distribute it”.

To keep to these guidelines, different terms under influencers’ posts are used, with the whitepaper finding the most preferred form of disclosure is ‘#Collab’.

McGillivray says there’s been no change to campaign result since these guidelines were put in place, as long as the collaboration is authentic.

“Consumers are savvy. They know when they see an ad for Coca-Cola on TV, Coca-Cola paid for it to be there, the majority know that when the All Blacks run onto the field wearing Adidas shoes, Adidas has paid for those shoes to be there and they know there is a relationship with influencers.”

It’s to this point about influencers being on multiple channels that McGillivray says the “influencer bubble”, that sceptical commentators predict will burst, doesn’t actually exist.

“Influencers have been around for a long time and so yes potentially the Instagram influencer won’t be relevant forever – whether or not they can transfer their influencer onto another channel is another question – but influencer marketing isn’t a bubble, the channels will just change,” she says.

“There will always be people to guide and help inform our decisions.”

This story is part of a StopPress series examining influencer marketing. To read more on influencer marketing, click here.

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