Influencers report-en-final

© The Online Project 2018
The Online Project

MARKETERS
ARE FROM VENUSARE FROM MARS
INFLUENCERS

ABOUT THIS STUDY
With influencer marketing on the rise, it is often accompanied by an
increase in misconceptions on how influencer marketing is conducted.
Is it effective? What are the challenges both marketers and influencers
face while working together?
This study aims to bridge the gap between both parties once and for
all.

MARKETER
We conducted interviews with key decision makers in the
UAE and KSA for some of the largest brands and Fortune
500 companies as well as surveyed many others.
Conducted
53 1017
By Industry
Real Estate
2%
Technology
31%
Furniture
3%
Beauty
4%
Auto
6%
Fashion
6%
Telecom
9%
Food & Beverage
10%FMCG
13%
By Role
Other
22%
Business
Development
Managers
4%
Marketing
Executives
5%
CEO’S
19%
Marketing
Managers
35%
Brand
Managers
6%
CMO
9%
Marketers
Face-to-face
Interviews
Online Sample Size
Online
Surveys

Influencers
INFLUENCERS
In this study, we conducted face-to-face interviews with influencers in
the UAE and KSA from diverse industries. These influencers varied
from macro to micro influencers.
Conducted
24 47
Face-to-face
Interviews
Online Sample Size
Online
Surveys

KEY FINDINGS
OF MARKETERS
10

1
Marketers who run well-established social media programs see
influencer marketing as a natural extension of these.
They acknowledge that an important factor for them to adopt
influencer marketing is pressure from internal teams and competitors.
Skepticism and past failures are common reasons among marketers who
avoid including influencer marketing in their upcoming plans.
Short-term plans signal how
marketers are increasingly bullish
about influencer marketing
No May be
15%19%
Yes
66%
Marketers
© The Online Project 2018© The Online Project 2018

Engagement rate and sales increase are the preferred metrics
to measure the effectiveness of influencer marketing initiatives.
Marketers are still figuring out
how to measure the performance of
their influencer marketing initiatives
2
Website
traffic
10%
Conversion
rate
18%
Performance
is not measured
19%
Increase in
sales (Offline)
25%
Engagement
rate
28%
Marketers

An important factor that influences how marketers define the objectives for their
influencer marketing initiatives and the subsequent metric is to track their
effectiveness level of control that they have on the point of sale. Marketers who
rely on 3rd party distribution (e.g. FMCG brands) tend to focus on engagement
rate as a proxy for awareness and interest. Marketers who operate their own
retail outlets opt to track sales increase as they can effectively implement
mechanisms to establish the indirect impact of the influencer marketing initia-
tive.
Interestingly 19% of marketers readily accept that they don't measure the per-
formance of their influencer marketing initiatives.
Marketers

Marketers are increasingly feeling
the need to compensate influencers
with cash as non-monetary compensation
is no longer enough
3
Cash is now on the rise and represents 43% of how
marketers compensate influencers.
Marketers
$
43%
Monetary
compensation
57%
Non-monetary
compensation

Marketers
Not long ago marketers would almost exclusively resort to freebies, invi-
tations and compliments to compensate influencers. However, that's no
longer the case, especially for influencers with big and engaged follow-
ings. Marketers increasingly find themselves competing with other
brands for influencers' attention and commitment, which naturally gives
these the power to negotiate cash deals.
Nevertheless, marketers managing aspirational brands (e.g. premium
car brands) are still able to collaborate with influencers with arrange-
ments based on non-monetary compensation like unrestricted access to
product and exclusive events, travel, media exposure, etc.

Budgets are on the rise as influencer
marketing increasingly becomes
a pay-to-play game.4During the last 12 months, almost one-fourth of marketers
spent more than USD 25,000 in influencer marketing initiatives.
Marketers
$1K
or lower
19%
$10K - $25K
19%
$25K
or higher
23%
$1K -$10K
39%
$
$
$
$

Though budgets allocated to influencer marketing are still small when com-
pared to offline channels (e.g. TV, OOH), these budgets are gaining signifi-
cance in the context of marketers' digital marketing programs.
Not surprisingly, marketers who spend USD 25,000 or more are more likely
to have access to bigger marketing budgets (e.g. FMCG).
Nevertheless, this group is also represented by marketers who have had
success in earlier influencer marketing initiatives and decided to reallocate
budgets (from offline and other online channels) to scale up the positive re-
sults.

Influencers' content quality is
the key factor marketers use
to define the level of compensation5
Marketers
6%
11%
13%
15%27%
Based on the quality of comments that
are on the influencer's profile
Based on the amount
of followers
Based on the relationship
with the influencer
Based on the profile
of followersBased on the quality of content
produced by the influencer
28%
Based on the results
of the campaign

Marketers
Most marketers consider influencer compensation a complex topic. This
is due to the intrinsic subjectivity of evaluating content quality and the
fact that compensation is determined, in most cases, before campaign
results become available. Interestingly, the number of followers has
secondary importance for marketers. This is explained by the decline of
organic reach among the influencers' own audiences.
Nevertheless, the number of followers is still important as it influences
how marketers select influencers and also determines the starting point
of compensation negotiations.
Content quality and campaign results are the main factors
used by marketers to determine influencer compensation.

Half of marketers opt to plan and run
in-house, but not without some pains6
Marketers
Other
3%
Influencer
Marketing
Agency
5%
PR Agency
11%
Media Buying
Agency
11%
Social Media
Agency
18%
In-house
team
52%

Over half of the marketers run their
influencer marketing initiatives
in-house. Those who outsource it
prefer to work with social media
agencies.
Marketers who opt for an in-house
approach do so motivated by the idea
of building direct relationships with
influencers and to minimize costs.
Marketers who choose to outsource
are motivated mainly by the belief that
working with specialists yields better
results.
Marketers

Finding the right influencers is
the biggest pain-point for marketers
who run influencer marketing in-house7
Marketers
Two-thirds of marketers
who run influencer
marketing in-house
say their biggest
pain-point is finding
the "right" influencers.

Marketers acknowledge that researching and identifying influencers that
represent a good fit for their brands is a complex and time consuming
process. Furthermore, they say that successfully approaching influencers
is highly dependent on personal chemistry and rapport.
Some marketers have made attempts to streamline this
process by using online tools, with mixed results.
Payment terms
15%
Unresponsivness
during the campaign
18%
Finding the
right influencers
67%

Marketers identify a lack of budgets
as the main obstacle to run
influencer marketing initiatives.8
Marketers
Budget restrictions was the
main obstacle for marketers
who didn't run any influencer
marketing activities during
the last 12 months.
Though skepticism of the
value of influencer marketing
accounts for 20%, this
opinion is particularly salient
in certain categories like car
dealerships.
3%
8%
8%
10%
12%
42%
Choosing
Influencers
Added Value
Lack of
specialized
agencies
Technical
know-how
If influencer
marketing works
Budget restrictions

Hesitant marketers prioritize social
media and other digital channels.
9
Marketers
Marketers inactive on the
influencer marketing front
during the last 12 months
prioritized social media
content and advertizing.
Influencer marketing
competes with budgets
mostly with other digital
channels like social media
(content and advertizing)
and email marketing.
1%Celebrity
collaborations 8%Paid
search
11%Display
Advertizing
12%Events
12%Print
Ads
16%Online Ads
18%Email
marketing
22%Content
Creation

Proven ROI is not the only factor that
would persuade hesitant marketers to
adopt influencer marketing.10
Marketers
Besides ROI and pricing, access to
influencer marketing professionals is
a factor that would persuade hesitant
marketers to adopt influencer
marketing.
Since influencer marketing is a relatively
recent offering from communications
agencies (and individual professionals)
marketers find it challenging to discern
who can help them plan and run
influencer campaigns effectively
and profitably.
30%
Specialized
agencies
40%Proven ROI
30%
Competitive
pricing

7KEY FINDINGS OF
INFLUENCERS

1While compensation is a key
factor in brand collaborations,
influencers primarily value the fit
of the approaching brand with
their own personal brand.
Influencers
The reason why brands
collaborate with me is
because I know how to
entertain and engage my
audience through my
personal brand so brands
need to give me the
creative space to do that
and not bury me with
guidelines
– Lifestyle Influencer
1.1M Subscribers
Personal brand is
what influencers
value the most.

Influencers
Influencers are most appreciative
of brands that make the effort to
understand their values,audience,
content topics and tone of voice.
Most are ready to decline brand
collaborations that, in their
opinion, clash with what they
stand for and the message they
want to convey, no matter the
level of compensation.

2
Influencers believe that clarity
and realistic expectations are
key ingredients for successful
brand collaborations.
Nevertheless, they frequently
come across brands with
unclear objectives and scope
of work.
Lack of clarity in
objectives and
scope work is the
biggest challenge.
Influencers
The worst thing that can
happen in a campaign is the
client asking for things we
never agreed on initially.
That’s one of the reasons why
it’s sometimes better to work
with a social media agency or
3rd party so agreements are
drafted early on.
– Fashion Influencer
120K Followers

Many influencers have learned the
hard way that engaging with brands
under these circumstances typically
lead to ever changing requirements,
broken communication, and ultimate-
ly, dissatisfaction on both ends.
Influencers

3
Influencers who worked
previously with specialized
communications agencies
(e.g. social media, PR,
media) acknowledge that
this plays a positive role in
brand collaborations in most
situations.
Influencers
Agencies understand us
more than brands do and
that’s probably because they
are specialized in working
with social media and
influencers. They also help us
take care of the majority of
the leg-work so it’s smooth
sailing for us to focus on what
we do best; create content.
– Beauty Influencer
900K Followers
Specialized
agencies are
seen in most
situations as
facilitators.

In their eyes agencies take care of the
"legwork and formalities", including
contracts, logistics and payment
collection.
Influencers

4
Influencers who prefer working
directly with brands value the
opportunity of meeting the
brand's representative in
person.
Those who work
directly with brands
value direct
communication
Influencers
Working directly with the
brand team decreases the
chances of miscommunica-
tion so it’s much more clear.
Think of it; when you tell
someone something and
then it goes through 5
people, you end up getting a
completely different mes-
sage.
– Tech Influencer
98K Followers

This is with the purpose of having a
better understanding of what the collab-
oration is meant to accomplish and to
get quick feedback on ideas.
Nevertheless, they also acknowledge
that brands often don't have the
sensitivity to understand their needs
and the willingness to accommodate
to their requirements.
Influencers

5
Many influencers with large
audience platforms and estab-
lished reputations embrace brand
collaborations as a full-time
commitment. As the frequency,
complexity, and compensation
of their brand engagements
increase, it’s common for them
to partner with managers and
talent management agencies.
Influencers
Managers remove emotions
from the game. As influencers
we often find ourselves in
awkward situations about
payments, additional FOC
posts and what-not. When a
manager is involved, they can
negotiate better and take care
of all the work that comes
with it such as contracts,
agreements, invoicing, etc
– Comedy Influencer
1.2M Followers
It's common for
well-established
influencers to work
with managers.

These normally take responsibility
for the "business aspects" of
brand collaborations, enabling
influencers to focus their energy
on developing content.
Influencers
Full Time

6
Influencers say that time and
effort are the key factors in de-
termining compensation. This is
especially true for smaller and
emerging influencers.
Influencers
Time, effort, and
audience size are
key factors used
by influencers
to determine
compensation.
There is no one size fits all for
pricing but the main thing I
look at is how much time I
am going to spend working
on the campaign as well as
where the brand is using
the content that I create.
Follower-base isn’t as
important as it used to be
with organic reach
decreasing daily.
74K Followers

Nevertheless, in the case of well-established
influencers, the size of their audience dictates
the starting point of compensation
negotiations.
Some influencers acknowledge that audience
size is diminishing in importance as the
organic reach in the most prominent social
media platforms decrease.
Influencers

7
Smaller and emerging influencers
determine the success of their
brand collaborations mostly by the
qualitative aspect of the feedback
they receive from their audience.
Influencers
There are a lot of numbers to
look at but what do they all
really mean? Just because
I got a high engagement
rate might not mean I sold
products for the brand; it
could mean they like my
content. I like to look at the
quality of responses I get from
my community such as what
people comment and what
they message me saying
There's no
standard way
in which influencers
evaluate their
own performance
1.1M Subscribers

On the other hand, well-established
influencers tend to adopt a more
formal approach to evaluate their
performance. They're increasingly
more comfortable reporting key
metrics like reach, engagement rate,
and click-through-rates.
Influencers

The Online Project
+971 4 420 9064
PO Box 502029
Unit 109 - Building 4C
Dubai Media City
Dubai, United Arab Emirates
Thank
you

Influencers report-en-final

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