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The Marketing Value of Influencers
 

The Marketing Value of Influencers

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    The Marketing Value of Influencers The Marketing Value of Influencers Presentation Transcript

    • The Marketing Value of Influencers Ed Keller Gregg Liebman CEO Senior Vice President Keller Fay Group CNN
    • CNN & Influencer Marketing My role at CNN is to find research that advertisers find credible that enables us to both attract new ad dollars as well as charge a premium for the network's valuable audience Why Influencer Marketing: • Word of mouth is the most effective $1.35 Billion! communication in driving a purchase • Heightened interest in WOM marketing $981M • Advertisers are looking to do more with less • Influencers are market multipliers $722M • Influencers are information seekers and thus heavy news viewers* $407M • Influencers are early adopters of new $313M technologies* $179M $76M • CNN.com/video; CNN podcasts; CNN Mobile 2001 2002 2003 2004 2005 2006 2007 Positioning that works across all CNN platforms Growth in spending on word of mouth marketing *Source: Roper Influentials
    • INFLUENTIALS ARE MORE LIKELY TO FIND NEWS IMPORTANT TO FOLLOW How important is it to you personally to follow the news? 76% 51% General Population Influentials 36% 24% 7% 5% 0% 0% Very Somewhat Important Not too Not at all Important Important Important S U C : C N&IN L E T L A T U ES U Y R P RA W D C M E 2 0 –B S D O A U T 2 -5 ORE N F U N IA S T IT D T D , O E S , E E B R 0 8 A E N D L S 5 4
    • INFLUENTIALS ARE MORE LIKELY TO CURRENTLY WATCH CNN FOR NEWS AND INFORMATION Which of the following television news sources do you currently watch for news and information? General Population Influentials 63% 61% 60% 59%58% 56%54% 50% 50% 50% 47% 47%45% 42% 39% 39% 37% 36% 20% 18% 15% 14% S U C : C N&IN L E T L A T U ES U Y R P RA W D C M E 2 0 –B S D O A U T 2 -5 ORE N F U N IA S T IT D T D , O E S , E E B R 0 8 A E N D L S 5 4
    • INFLUENTIALS MAKE 360 CONNECTION TO THE CNN BRAND INFLUENTIALS REACH ACROSS CNN PLATFORMS During the past month, have you gotten CNN/HLN news from any of the following places? 70% 51% General Population Influentials 30% 19% 11% 8% 9% 9% 7% 5% 5% 5% On TV in On websites On a On TV in an E-mail alert Someplace your home portable Else airport device S U C : C N&IN L E T L A T U ES U Y R P RA W D C M E 2 0 –B S D O A U T 2 -5 ORE N F U N IA S T IT D T D , O E S , E E B R 0 8 A E N D L S 5 4
    • Purpose • CNN and Keller Fay have teamed up to take influencer research to a more granular level • We are linking audiences to word of mouth, and influencers to brands • Our focus is to demonstrate the marketing value of influencers, and the important role that advertising plays in stimulating their word of mouth advocacy • In particular, we focus on these three areas: •Reach effect of influencers •Acceleration effect of influencers •Stimulative effect of advertising re word of mouth advocacy
    • “In the Beginning” • Published in 1955 by prominent academics from Columbia Univ. • Documented the pivotal role played by “other people” (i.e., personal influence, a.k.a. word of mouth) in consumer and political decision making • First to observe “there were people who exerted a disproportionately greater influence” over others – “opinion leaders” (a.k.a. influentials)
    • Fast Forward: February 2000 “I think that word of mouth is something created by three very rare and special psychological types, whom I call Connectors, Mavens, and Salesmen.”
    • January 2003 “When Americans make decisions today, it’s a conversation. Marketers need to reach the people starting those conversations.”
    • For Every Action, There is an Equal and Opposite Reaction “The Myth of the Influentials” • Published in 2005 • “When we started BzzAgent, we believed in the myth of the influentials.” • “It took nearly a year of campaigns . . . for us to understand that mavens and high profile influentials are effective in specific ways and in particular categories, but most of the time, everyday people are better.” Ch 5: “The Myth of the Influentials”
    • For Every Action, There is an Equal and Opposite Reaction “The Accidential Influentials” The HBR List: Breakthrough Ideas for 2007 #1: The Accidental Influentials Duncan J. Watts In his best seller, “The Tipping Point,” Malcolm Gladwell argues that “social epidemics” are driven in large part by the actions of a tiny minority of special individuals. The idea seems intuitively right—we think we see it happening all the time. Nevertheless, this isn’t actually how ideas spread. It’s better to focus on getting enough plain, ordinary people to sign on. February 2007
    • What’s a Marketer to Think (and Do?) Can These Competing Views be Reconciled? What is the Value of Influencers to Marketers?
    • In Part, It’s a Matter of Definition What they are called Category Who they are (Partial list) Political/government Opinion leaders Formal position of authority leaders/staff Decision makers Business leaders C-suite Academics/scientists Experts Institutional/recognized Industry analysts Mavens subject matter experts & NGO leaders Analysts advocates Consumer activists Critics Journalists Talking heads Media elite Commentators Columnists Talk show hosts Politicos Trendsetters Celebrities Fashionistas Designers Cultural elite Taste makers Artists Creators Musicians Starters Mavens Neighborhood leaders Starters Members of community Connectors Socially connected groups Soccer moms Online networkers Spreaders Business networkers Hubs Alphas Source: WOMMA Influencer Handbook, 2008
    • But it’s More than Definition; New Evidence (Re)confirms the Value of Influencers • Reach Effect • Marketing via influencers creates efficiency and effectiveness • Acceleration Effect • Profit impact of influencer marketing is substantial when looked at from a Customer Lifetime Value (CLV) perspective
    • The “Reach Effect” of Influencers • ~10% of population, influencers account for 1/4 of all WOM • ~1b WOM-based brand impressions daily! • 80% more conversations each day than average • 130% more brand conversation • Category-specific influencers talk about brands at up to 5x the norm
    • Influencers: Engaged in Far More Conversation (Average # weekly conversations and brand mentions*) +81% +130% *Source: Keller Fay’s TalkTrack®, 2008 16
    • Influencers Give 2x as Much Advice (Percent giving advice about category on a regular basis*) 80 % Food & dining 43 % 61 Media & entertainment 31 Beverages 61 30 60 Shopping/Apparel 29 53 Technology 29 50 Health & healthcare 27 Conversation Catalysts™ 47 Automotive 24 Total Public Personal care & beauty 49 24 53 Sports/Recreation & hobbies 24 44 Household products 22 47 Travel services 22 39 Financial products & services 20 Telecom 42 19 40 The Home 18 33 Children's products 18 * Source: Keller Fay’s TalkTrack®, 2008 17
    • In Autos, Category Influencers Give Up to 5x as Much Advice (Conversation about auto brands in 2008: Catalysts v. Total Public) 523 BMW 100 260 461 Hummer 100 361 Mini Cooper 100 392 456 360 Mercedes Benz 100 260 Honda 228 347 100 Toyota 234 345 Automotive Catalysts™ 100 337 Conversation Catalysts™ Chrysler 100 238 Total 336 Lexus 100 229 321 The scores for total public were set to 100, and Chevrolet 100 199 scores for Conversation Catalysts™ and Automotive Catalysts™ were indexed against the 320 Ford 100 207 total. Dodge 198 285 100 Average Index 255 372 100 * Source: Keller Fay’s TalkTrack®, 2008
    • In Financial Services, Category Influencers Give Up to 8x as Much Advice (Conversation about investment brands in 2008: Catalysts v. Total Public) Charles 838 365 Schwab 100 759 Etrade 296 100 721 TD Ameritrade 266 100 Financial Catalysts™ Fidelity 657 268 Conversation Catalysts™ Investments 100 Total 602 Vanguard 213 The scores for total public were set to 100, 100 and scores for Conversation Catalysts™ and Financial Catalysts™ were indexed against 506 the total. Merrill Lynch 227 100 599 Average Index 252 100 * Source: Keller Fay’s TalkTrack®, 2008
    • In Beverages, Category Influencers Give Up to 4x as Much Advice for New Products (Conversation about beverage brands: Catalysts v. Total Public) 148 Coca-Cola 140 180 Beverage Catalysts™ Diet Coke 162 Conversation Catalysts™ 377 Coke Zero The scores for total public were set to 272 100, and scores for Conversation Catalysts™ and Beverage Catalysts™ were indexed against the total. * Source: Keller Fay’s TalkTrack®, 2008
    • The “Acceleration Effect” of Influencers New academic research* illustrates • “Social hubs adopt sooner than other people not because they are innovative but rather because they are exposed earlier to an innovation due to their multiple social links.” • “Adoption by hubs speeds up the growth process and directly influences eventual market size.” • “If social hubs can be identified . . ., they could be an efficient target for word of mouth campaigns, leading to both faster growth and increased market size.” • “The value of a customer to the firm is more than the sum of their purchases, it also includes the effect that some individuals, i.e. hubs, have on others. Such “influentials” have substantially higher value than previously realized.” *The Role of Hubs in the Adoption Processes. Jacob Goldenberg, Sangman Han, Donald R. Lehmann and Jae Weon Hong. July 17, 2008
    • The “Acceleration Effect” of Influencers Additional academic research* further documents the profit impact of influencer word of mouth • WOM “seeding” for new products accelerates the purchase process • Especially true for influencer-based programs • Faster adoption = greater profits • Based on analysis of customer’s lifetime value (CLV) % improvment over no 50% 40% seeding 30% 20% 10% 0% 0% 2% 4% 6% 8% proportion of seeding Improvement random seeding Improvement influential seeding * The Social Value of Opinion Leaders. Barak Libai, Eitan Muller and Renana Peres. October 2008
    • Influencers Accelerated WOM for Wii Launch (% of consumers mentioning Nintendo, 4-week rolling average) Conversation Catalysts™ Total Public 9.00% 8.00% 7.00% 6.00% 5.00% Catalysts 2 months ahead of peak in total public 4.00% 3.00% 2.00% 1.00% 0.00% 6 06 06 06 PT 6 06 06 EC 06 PT 06 PT 06 06 PT 06 C 06 06 06 06 06 06 06 06 06 AU 06 EC 06 EC 06 EC 06 06 EC 06 AU 6 0 0 3 8 5 13 20 27 12 19 26 1 SE 10 24 SE 17 15 22 29 2 9 3 16 23 30 10 24 31 17 G V T T L L G G G V V V O T T T C JU JU L L L O O O C C C JU JU JU SE AU AU O O N D SE O O O N N N D D D D * Source: Keller Fay’s TalkTrack®, 2008
    • Reaching Influencers Media Mavens Technology Attuned to Comfortable Relevant Advertising
    • Influencers Draw on Advertising to Fuel Content in WOM Conversations 54% of influencer’s brand conversations include references to marketing or media led by. . . Advertising (26%) Programming/editorial (14%) Point of sale (10%) Promotions (8%) Websites (8%) Direct mail (5%) Marketing and media are important drivers of WOM Source: Keller Fay’s TalkTrack®, 2008
    • Conclusions • Word of mouth is a powerful and growing force in the consumer marketplace • Influencers sit “at the center of the conversation” • An important constituency in generating consumer conversation to drive brand growth • They are neither “mythical” nor “accidental” • Influencers generate reach, making WOM marketing more efficient, effective •Between 2x and 5x • Influencers accelerate product adoption, improving profitability • Influencers amplify advertising messages via word of mouth • And ad-influenced WOM increases brand advocacy
    • CNN & Keller Fay Group • Powerful new tool that enables us to demonstrate to advertisers the value of the CNN viewer and cross- platform user
    • Thank You! ekeller@kellerfay.com gregg.liebman@turner.com