In 2016 Forbes magazine stated ‘Influencers are the new brands’ and in recent years we’ve seen a huge rise in influencer marketing opening up new opportunities to communicate and engage with consumers. While it’s nothing new to ask a friend, family member or neighbour for advice about your decisions, it has become increasingly common to look online to social media influencers instead, and this huge disruption in the marketing industry is transforming how consumers are making purchasing decisions.
An influencer is a social media personality with a wide enough reach to influence opinions and drive sales, and they are a major driving force in how brands now interact with consumers, in particular the younger demographic.
But these so called ‘influencers’ that Forbes refers to aren’t the traditional celebrity endorsement, and they’re not part of a manufactured advertisement campaign, they are consumers communicating with consumers on social media platforms. They command a huge influence over their followers, indeed recent research suggests audiences trust influencers as much as their own peers, and whilst their influence is more organic and subtle it’s also incredibly powerful.
According to a study by Google, 70% of teenage YouTube subscribers say they relate to YouTubers more than to traditional celebrities, an impact felt widely across other social media platforms too. This demographic represents an enormous segment of the purchasing population but is considerably different from other groups when it comes to how to market to them, and the authenticity of influencers is the key to attracting their attention.
“62% of millennials say that if a brand engages with them on social networks, they are more likely to become a loyal customer. They expect brands to not only be on social networks, but to engage them.”(Forbes.com)
Early adopters of these social platforms are now reaping the financial rewards. Their brand ‘me’ is highly nurtured and constructed offering their loyal followers an intimate insight into their lives, and for a fee they’ll share their audience with a brand or product in the form of a recommendation, product placement or review. However their relationship with their audience is vital to an influencer’s value as a trusted voice, and therefore unlike a traditional spokesperson their loyalty isn’t usually tied to a brand, making consumers even more likely to invest in an influencer’s opinion.
So how does this relate to the financial world? The key here is relatability, many consumers still feel disengaged with their financial providers. Whilst there are new market entries are looking to change this, social media has changed how consumers want to be engaged and they’re still not successfully utilising the huge potential that influencers offer.
When is a celebrity, not a celebrity? When he’s a ‘consultant’
Earlier in the year UK challenger Atom Bank surprised the FinTech community by hiring Black Eyed Peas frontman Will.i.am to ‘act as a consultant and board adviser as it seeks to differentiate itself in an increasingly crowded sector.’ The specifics of his role are yet to be confirmed by the digital bank, but crucially for Atom, the pop star commands a huge social media following with over 13 million on Twitter alone, and is known for his enthusiasm for new technology and commitment to promoting it. If successful, this attempt to connect with their Millennial demographic could pave the way for influencer marketing as a viable digital strategy. However, if it fails to have an impact beyond the headlines, it could be perceived as a week step away from traditional style of celebrity endorsement. The danger of choosing an already established celebrity is that they lose the relatability factor that can be crucial to an influencer’s appeal.
How are other industries making this work?
Last year global cosmetics giant L’Oréal Paris enlisted 5 female YouTube vbloggers as their ‘glam squad’ to reveal new product launches, review new products and promote sponsored events like London Fashion Week. This exposed the brand reach to new audiences (a combined follower reach of 5.5 million) as well as getting invaluable real-time consumer feedback whilst a campaign is still active. What’s even more interesting here, is that through their choice of influencers they were simultaneously able to promote their brand values around industry diversity. The women were of different ethnicities and weren’t supermodels, they were more relatable to the consumer. This is important, particularly for the millennial generation who want to feel like they are investing in more than just something material, they want to feel they can actively contribute to social issues by the products they consume.
A recent study revealed that 92% of consumers trust an influencer more than a traditional ad and with 47% of online users utilising ad blocking technology, marketers need a new way to connect with their consumers.
In the past few days, online giant Amazon has launched its latest offering; the Amazon Influencer Program. Currently still in beta testing, and similar to the Amazon Affiliate program, the new platform will offer influencers commission on products sold. Shoppers will be able to browse through a curated selection of products that the trusted influencer has tried, tested and recommended. Right now, this is an invitation only service, as only a chosen few have been selected to participate. To become a part of this powerful elite, Amazon look to assess an influencer’s social media impact; looking at followers, engagement and brand relevance among other things.
Market predations are currently stating that money spent on influencer programs will double in 2017. Whilst the effect of influencers has been experienced by a wide variety of markets; everything from fashion and beauty to fishing and gaming, the financial industry is yet to fully leverage the cult followings these influencers command.
Although this isn’t exclusive to this demographic, we know that Millennials in particular are more open to ‘alternative’ finance options, less reliant on the traditional bank branch and have been raised in a world where technology improves efficiency and access.
In a recent podcast with Millennial Money Matters, Matthew Ford, CEO of Pariti (a personal finance manager tool targeted at Millennials) stated that Instagram was its most effective marketing channel. Social media can offer abundant big data opportunities to further understand an audience and how they engage with their finances, but we are yet to see a bank or fintech company utilise the impact of influencers to the scale of other industries. What’s even more interesting is that many of the most successful influencers are tech savvy Millennials themselves, so it’s highly likely they are frequent users of digital finance products awaiting this type of disruption. There’s an opportunity to attract a generation that is disengaged with traditional banking, and reinvent how they relate to their financial providers.
