That’s the sound of Ryan Detert’s invite-only mobile app, Influential, trying to get the attention of one of his select group of users. It emerges from a purse or pocket to signal that a brand such as Kellogg’s or Corona is offering money in return for posting a promotional message on social media. If a person taps to agree, Influential can send out the paid message on one of that person’s accounts.
In return, Detert’s company will send them a check for anywhere from $500 to tens of thousands of dollars per post.
Paying people to post ads to their own followers, known as influencer marketing, became big business thanks to stars such as Kim Kardashian and Cristiano Ronaldo being willing to blast fans with paid messages. With demand from brands soaring, companies like Influential are now using ad targeting technology to expand and democratize the art of being a paid mouthpiece.
Detert says that crunching data from social networks and other sources allows his company to identify people who may have a follower count that’s a thousandth of a Kardashian’s but whose paid messages are much more likely to be read, faved, or reposted. “We don’t allow in most celebrities,” he says. “Their engagement is very low because they’re followed voyeuristically.”
Influential’s rolls includes people like CarlieStylez, a video blogger and stylist who posts about family and fitness, and 18-year-old singer Maddi Jane, who has 1.4 million followers on YouTube but as yet lacks a Wikipedia page.
Wesley Stromberg, a musician whose band Emblem3 appeared on the X Factor, says Influential’s system does a good job of matching him to brands with messages that fit with his interests, such as surfing, and those of his fans. He uses analytics tools provided by Influential to track how his own posts and those from brands resonate with his followers. Paid messages generally perform similarly to his original updates. “It’s not like I’m promoting a different toothbrush brand every day,” he says.
The company has 10,000 influencers on its books, with a combined audience of about five billion across Twitter, Facebook, Snapchat, Vine, YouTube, and Instagram.
One way Influential matches brands to influencers is by scraping data on the accounts of their followers to build up a demographic profile of the people they reach. It uses a service from IBM’s Watson division to assign psychological profiles to them, too.
All that data is put to use when a brand such as Nestlé or Red Bull has a message to get out. A flurry of “ker-chings” can be sent out to the people best suited to spreading it, says Detert. Influential uses its data to guarantee the ad will reach a certain number of people in a chosen demographic. In line with advice from the U.S. Federal Trade Commission, all paid posts include a #ad tag or some other verbal or visible acknowledgement that they are promotional.
Advertising giant WPP formed a marketing group focused on influencers this year, and Condé Nast, publisher of magazines including Vogue and the New Yorker, recently started selling Influential campaigns alongside conventional packages of print and online advertising. The minimum for a Condé Nast influencer campaign is $100,000.
Lisa Valentino, the publisher’s chief revenue officer, says brands are willing to pay that—and much more—for a chance to generate online word of mouth. “It’s one of the faster growing areas of our business,” she says.
Valentino says proven influencers have come to look attractive as the people overseeing ad budgets become less trusting of more established, highly automated digital marketing techniques. Industry studies show that a significant fraction of clicks on conventional online ads are fraudulent, and Facebook recently admitted that for the past two years it had significantly overstated the time people spent watching videos.
Against that background, a way to piggyback on connections between real people, outside of ad slots, looks attractive. “It’s about flight to quality,” says Valentino.
Social platforms like Facebook and YouTube actively encourage influencer marketing, which might seem surprising given the fact that ad dollars spent putting words in the mouths of influencers might otherwise have gone to their own advertising products.
Pete Borum, CEO of Reelio, a startup that uses data crunching to match brands with YouTube influencers in a similar way to Influential, says that the networks don’t have much choice. People with loyal, highly engaged bands of followers are what keep people coming back to sites such as YouTube and Instagram. Indeed, Reelio entered a formal partnership with YouTube last year to help the company work with brands wanting to advertise on the platform. Borum says his data suggests that influencer marketing can actually increase YouTube’s ad take. That’s because companies pay to use the site’s promotional tools to amplify the messages.
Not all platforms have embraced the idea. Snapchat, who’s founder Ryan Spiegel has famously labeled some ad targeting practices used by older social networks as “creepy,” hasn’t yet put out a welcome mat for influencers, despite there being strong demand from brands hoping to reach its young audience, a group increasingly difficult to reach in conventional ways like television advertising. The network’s parent company, recently renamed Snap, doesn’t offer a way to create or track posts using software, making it difficult to operate for companies with a data-centric approach to herding influencers.
Influential has adapted to that by requiring its network to upload screenshots from the Snapchat app, then using computer vision software to check that a paid message was posted and to note the response. And Detert thinks they will have to welcome in influencer marketing eventually as the influencers themselves rally for it. “Content creators are the lifeblood of any network,” he says. “If they try and stop this, they die.”