Driverless cars, bitcoin, Airbnb – technology, alongside innovative business models, have been changing the way we’ve done things for decades. Advertising is a market that feels destined for a major disruption. We’ve seen that millennials and Gen Z consumers won’t go for digital and, even with more creative content and new platforms, clickthrough rates have remained dismal. Think about it: what else would you buy that has a success rate of less than one out of a thousand? That’s a failure rate, not a success rate! Marketers know we need to evolve the model of getting a brand’s message to the consumer and there will be some steady progress for Influencer Marketing in 2016, but we’ll be running through deep sand for a while.
Millennials and Gen Z will continue to frustrate marketers
Past precedence has shown that the marketing methods that work today won’t resonate with those in the prime buying generation. For example, Baby Boomers moved from direct mail to telemarketing. Generation X moved from telemarketing to email marketing. Now millennials are moving from social media to influencer marketing. Gen Z, however, will demand complete transparency in marketing efforts, leading to a decrease in paid influencer marketing and a rise in open and honest influencer marketing, or brand advocacy.
Marketers will get budget for advocacy pilot projects
Consumers are longing for more personalized interactions with their favored brands beyond complaints. Millennials, in particular, will advocate for brands they love. To cultivate these loyalists, marketers want to rely heavily on technology to gain insight into their behaviors and desires and participate in content creation, crowdsourcing and even social activism. But think about what’s needed to convert a brand’s consumer list into social profiles, which are then sorted and segmented so that social marketers can listen and respond. The project touches at 2-3 department heads in Marketing along with 3 or more department heads in IT. Because the value is becoming clearer to enterprise executives and the CMO is getting more budget, we’ll see some budget allocated for pilot programs in 2016-17.
Influencer marketing will need transparency to scale
How did you find your last babysitter? How much did they charge? Did they even know what to charge you? Babysitting is a disorganized, inefficient market – similar to Influencer Marketing.
Influencer marketing is no recent invention and most agree that word-of-mouth is the most effective advertising. So, why is it still a sub $500 million market when the digital ad market will bill over $60 billion? The answer is scaling and transparency. We’re finally getting great, next generation software tools to identify influencers. But the business model remains archaic: brand contacts agency, agency contacts an influencer from their database or from a tool, brand pays agency, who then pays influencer. This model is pinning the market’s shoulders to the ground. How can we start taking chunks out of that big digital ad budget? A standardized and transparent pricing model, so that you can hire tens or hundreds of influencers to be authentic and loud voices for your brand. You find influencers you’d trust with your brand, then know how and what to pay them in bulk. You get millions of impressions. But brand managers are fiercely protective of their brands, so it has to be authentic – hence the difficulty that great discovery tools can help with.
Remember that B2B changes course like a sluggish cruise liner, while B2C can maneuver like a jetski. So be patient, but persistent, and start building the foundation for a new marketing model whose wake is as mighty and large as the ocean.
By Jack Holt, Mattr CEO