Month: September 2018

Will Influencer Marketing Translate Into Sales?

In the marketing arena, the influencer industry is all the rage. This is a marketing channel for companies to connect with consumers and be part of a conversation which will hopefully result in sales or brand lift. The problem is that the channel is complex and a variety of staff, processes and vendors are required to make an impact at scale. There is little doubt that the mar-tech industry will capitalize on the chaos. Sales will trend upward if the marketer can realize that it’s all about the followers with discretionary income AND the content they create that resonates.

There is little doubt that the mar-tech industry will capitalize on the chaos.

There is some good insight into mar-tech and digital media found here, from Luma Partners.

The report is delivered through the eyes of an investment banking lens, so keep that in mind as you read.

What excites me about the space

This was shocking to me: Gen X (ages 35 to 49) spends 7 hours per week on social media, according to Nielsen. This is more time than millennials spend! Check out the report:

The people spending time on social media are Gen X adults with credit cards. It’s no longer a bunch of kids with no discretionary income. However, there are still undesirable followers of influencer’s who marketers do not want to reach.

Main considerations

There are two main issues at play for marketers who wish to better understand an influencer’s impact:

  1. Audience size and quality
  2. Content quality

Audience size is the most obvious but the composition of that audience is even more important. You have to ensure an influencer can prove their worth (i.e. — did they drive sales and can I attribute the sales to them?). Tracking and attribution are still the Wild West in the influencer space. I’ve enjoyed trying tools like SocialEdge, TapInfluence and many others but they are still a “black box” as far as how they arrive at the scoring methods they utilize. When will the Neilson or Comscore of influencers take the stage and help sort out independent tracking and attribution?

Content quality is more subjective. Good storytelling through videos, photo and text is often arbitrary. Vine/ YouTube sensations Jake Paul and Logan Paul remind me of MTV’s Jackass and Punk’d from years ago. It also reminds me what my mentor, Don Ohlmeyer the former NBC President, used to say: “MTV is mostly hype and no ratings. Marketers buy them for hype and for the niche, youth demographic they reach.” My concern is that they do not have staying power, and their audience is so young without income that they can’t achieve high average order value’s (AOV’s) for ecommerce marketers. In the branding world, this audience is so ADD that they won’t sit through preroll ads, resulting in low ad completion rates.

Some of the most unsuspecting (sometimes boring) content subjects may have the fewest followers, but those followers drive results for marketers and make the influencers very rich. Take arts/ crafts for example. A seemingly dull space is full of multi-millionaires (Ipsy, Bando, Inked Brands, Brit + Co, Create and Cultivate, BeautyCon, etc.). These content verticals have staying power by virtue of the type of content they focus on now.

Both types of marketers, brand and direct marketers, are going to have many challenges and successes as they utilize this influencer channel.

Customer Acquisition Costs Getting Steeper

Do you have what it takes to survive in the self-serve platform media landscape?

For all brands, staying on top of the digital ad spend game is an uphill battle requiring you to master the terrain, even as it twists and turns faster than you can flex your marketing budget. Marketers have access to the same data on the two big platforms: Facebook and Google. The space is becoming commoditized and costs are going up.

Getting a grip on the current customer acquisition marketplace

The learning curve to buy ads effectively and efficiently is steep. For example, buying an ad on Facebook is now incredibly easy, but ensuring the effectiveness of the buy — to optimize Return on Ad Spend (ROAS) — requires expertise, time, and amazing creative.

The major social platforms have been promoting their ad products and encouraging marketers to pay-to-play vs allowing for organic reach. This levels the playing field for comparable budgets in terms of reach and targeting but makes the choice of how and where to spend critical. Further, consumers are more distracted than ever, so brands need to capture attention by using great creative without breaking the bank. It’s the strategy piece of the puzzle that’s challenging as spend continues to grow. Ninety percent of marketers’ incremental digital spend goes to Facebook and Google, as you can see below.

Viewing ad spend over time shows which platforms dominate — Google and Facebook continue to form a growing “digital duopoly”.


Planning your next move by anticipating customer acquisition trends

What lies ahead for customer acquisition? As a digital revenue expert, I see these five customer acquisition trends gaining momentum:

1. Facebook’s efficiency will result in steeper costs.

  • Higher cost means only the strongest will survive, such as large multinational corporations (with varying degrees of KPI’s to run ads) and very high margin products (who lead their categories).
  • Other survivors are online education providers due to the sector’s global nature and the fact that the product is IP (video + worksheets) vs. a physical product.

2. Data co-ops will become more common.

  • Owners of data will begin to form more data cooperatives (second-party data) when they do not have competing products (for example, pet products sold to an airline’s list).
  • Email de-duplications will occur, and Facebook audiences will be shared or sold.

3. Discretionary income will become even more vital and transparent.

  • Marketers will need to fine-tune spending media dollars on market segments who have the income to buy their products.
  • Ability to extract meaning from demographics analytics and build campaigns accordingly will drive ad spend targeting and efficiencies.

4. Everyday household-name brands may matter less and less.

  • Ability to build brand awareness has never been more robust (for example, MVMT Watches built their brand online with no mass market approach), but that may not suffice to drive sales.
  • Frequent-use items, unless they have unique features, will be bought on price rather than on brand (for example, on Amazon, you say: “I need paper towels” vs. “I need Bounty”).

See how marquee, midsize, and infrequent-use brands compare.



5. Brands that sell emotion will continue to matter.

  • Consumers expect brands to have personalities and connect with them — just like people — and luxury brands excel at that.
  • In the luxury market, brands matter due to their emotional connection, that powerful ‘people magnet’ commanding a premium price that customers happily pay.

Notice how product categories with high emotional potential rank highest in ROAS.


Customer acquisition cost can be a startup killer, yet even for the most established brands, optimizing customer acquisition cost versus lifetime value (ability to monetize acquired customers) is a complex and dynamic process made easier with an agile roadmap expertly built for constant change.


Speaking on NBA All-Star Baron Davis’ panel today in LA at his Pre-ESPY’s event/ conference (topics on digital media, and more). Baron now develops and invests in tech, lifestyle and digital media companies. One of his notable investments was Vitamin Water. NFL player Marty Bennett, and the CEO of Siltanen & Partners, Rob Siltanen, also spoke. Moderator: Fox Sports’ anchor Chris Broussard.

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