The Marketing Value of Influencers
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Transcript of The Marketing Value of Influencers
Ed KellerEd KellerCEOKeller Fay Group
Gregg LiebmanGregg LiebmanSenior Vice PresidentCNN
The Marketing Value of InfluencersThe Marketing Value of Influencers
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
*Source: Roper Influentials
CNN & Influencer Marketing
2001 2002 2003 2004 2005 2006 2007
$76M$179M
$313M$407M
$722M
$981M
$1.35 Billion!Why Influencer Marketing:Why Influencer Marketing:• Word of mouth is the most effective communication in driving a purchase• Heightened interest in WOM marketing• Advertisers are looking to do more with less
• Influencers are market multipliers• Influencers are information seekers and thus
heavy news viewers*• Influencers are early adopters of new
technologies*• CNN.com/video; CNN podcasts;
CNN MobilePositioning that works across all CNN platforms
Growth in spending on word of mouth marketingGrowth in spending on word of mouth marketing
INFLUENTIALS ARE MORE LIKELY TO FIND NEWS IMPORTANT TO FOLLOW
51%
7% 5%
76%
24%
0% 0%
36%
General Population Influentials
Very Important
Somewhat Important
Not too Important
Not at all Important
How important is it to you personally to follow the news?
SOURCE: CNN & INFLUENTIALS ATTITUDE STUDY, ROPER ASW, DECEMBER 2008 – BASED ON ADULTS 25-54
INFLUENTIALS ARE MORE LIKELY TO CURRENTLY WATCH CNN FOR NEWS AND INFORMATION
50%
36%
50%
39%
56%
47%
59%
37%
20%14%
63%
50%47%
61% 60%54%
45%
58%
42%
15%18%
39%
General Population Influentials
Which of the following television news sources do you currently watch for news and information?
SOURCE: CNN & INFLUENTIALS ATTITUDE STUDY, ROPER ASW, DECEMBER 2008 – BASED ON ADULTS 25-54
51%
5% 5% 5%9%
70%
30%
8% 7% 9% 11%
19%
General Population Influentials
On TV in your home
On TV in an airport
On websites
E-mail alert
During the past month, have you gotten CNN/HLN news from any of the following places?
On a portable device
INFLUENTIALS MAKE 360 CONNECTION TO THE CNN BRANDINFLUENTIALS REACH ACROSS CNN PLATFORMS
Someplace Else
SOURCE: CNN & INFLUENTIALS ATTITUDE STUDY, ROPER ASW, DECEMBER 2008 – BASED ON ADULTS 25-54
• 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
Purpose
• 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)
“In the Beginning”
“I think that word of mouth is something created by three very rare and special psychological types, whom I call Connectors, Mavens, and Salesmen.”
Fast Forward: February 2000
“When Americans make decisions today, it’s a conversation. Marketers need to reach the people starting those conversations.”
January 2003
• 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 Myth of the Influentials”
#1: The Accidental InfluentialsDuncan 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.
The HBR List: Breakthrough Ideas for 2007
February 2007
For Every Action, There is an Equal and Opposite Reaction
“The Accidential Influentials”
Can These Competing Views be Reconciled?
What is the Value of Influencers to Marketers?
What’s a Marketer to Think (and Do?)
Category Who they areWhat they are called (Partial list)
Formal position of authorityPolitical/government leaders/staffBusiness leaders
Opinion leadersDecision makersC-suite
Institutional/recognized subject matter experts & advocates
Academics/scientistsIndustry analystsNGO leadersConsumer activists
ExpertsMavensAnalystsCritics
Media eliteJournalistsCommentatorsTalk show hosts
Talking headsColumnistsPoliticos
Cultural elite
CelebritiesDesignersArtistsMusicians
TrendsettersFashionistasTaste makersCreatorsStarters
Socially connected
Neighborhood leadersMembers of community groupsOnline networkersBusiness networkers
MavensStartersConnectorsSoccer momsSpreadersHubsAlphas
Source: WOMMA Influencer Handbook, 2008
In Part, It’s a Matter of Definition
• 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
But it’s More than Definition; New Evidence (Re)confirms the Value 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
The “Reach Effect” of Influencers
16
*Source: Keller Fay’s TalkTrack®, 2008
+81%+130%
Influencers: Engaged in Far More Conversation(Average # weekly conversations and brand mentions*)
17
18
18
19
20
22
22
24
24
24
27
29
29
30
31
43
33
40
42
39
47
44
53
49
47
50
53
60
61
61
80
Children's products
The Home
Telecom
Financial products & services
Travel services
Household products
Sports/Recreation & hobbies
Personal care & beauty
Automotive
Health & healthcare
Technology
Shopping/Apparel
Beverages
Media & entertainment
Food & dining
Conversation Catalysts™
Total Public
%%
* Source: Keller Fay’s TalkTrack®, 2008
Influencers Give 2x as Much Advice(Percent giving advice about category on a regular basis*)
The scores for total public were set to 100, and scores for Conversation Catalysts™ andAutomotive Catalysts™ were indexed against the total.
100
100
100
100
100
100
100
100
100
100
100
100
255
198
207
199
229
238
234
228
260
392
361
260
372
285
320
321
336
337
345
347
360
456
461
523
Average Index
Dodge
Ford
Chevrolet
Lexus
Chrysler
Toyota
Honda
Mercedes Benz
Mini Cooper
Hummer
BMW
Automotive Catalysts™
Conversation Catalysts™
Total
In Autos, Category Influencers Give Up to 5x as Much Advice(Conversation about auto brands in 2008: Catalysts v. Total Public)
* Source: Keller Fay’s TalkTrack®, 2008
100
100
100
100
100
100
100
252
227
213
268
266
296
365
599
506
602
657
721
759
838
Average Index
Merrill Lynch
Vanguard
FidelityInvestments
TD Ameritrade
Etrade
CharlesSchwab
Financial Catalysts™
Conversation Catalysts™
Total
The scores for total public were set to 100, and scores for Conversation Catalysts™ and Financial Catalysts™ were indexed against the total.
In Financial Services, Category Influencers Give Up to 8x as Much Advice(Conversation about investment brands in 2008: Catalysts v. Total Public)
* Source: Keller Fay’s TalkTrack®, 2008
272
162
140
377
180
148
Coke Zero
Diet Coke
Coca-Cola
Beverage Catalysts™
Conversation Catalysts™
The scores for total public were set to 100, and scores for Conversation Catalysts™ and Beverage Catalysts™ were indexed against the total.
In Beverages, Category Influencers Give Up to 4x as Much Advice for New Products(Conversation about beverage brands: Catalysts v. Total Public)
* Source: Keller Fay’s TalkTrack®, 2008
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)
* The Social Value of Opinion Leaders. Barak Libai, Eitan Muller and Renana Peres. October 2008
0%
10%
20%
30%
40%
50%
0% 2% 4% 6% 8%
proportion of seeding
% im
pro
vm
en
t o
ver
no
seed
ing
Improvement random seeding Improvement influential seeding
The “Acceleration Effect” of Influencers
Catalysts 2 months ahead of peak in total public
0.00%
1.00%
2.00%
3.00%
4.00%
5.00%
6.00%
7.00%
8.00%
9.00%
JUL
2 06
JUL
9 06
JUL
16 0
6
JUL
23 0
6
JUL
30 0
6
AUG 6 0
6
AUG 13
06
AUG 20
06
AUG 27
06
SEPT 3
06
SEPT 10
06
SEPT 17
06
SEPT 24
06
OCT 1
06
OCT 8
06
OCT 15
06
OCT 22
06
OCT 29
06
NOV 5 0
6
NOV 12
06
NOV 19
06
NOV 26
06
DEC 3 0
6
DEC 10
06
DEC 17
06
DEC 24
06
DEC 31
06
Conversation Catalysts™ Total Public
Influencers Accelerated WOM for Wii Launch(% of consumers mentioning Nintendo, 4-week rolling average)
* Source: Keller Fay’s TalkTrack®, 2008
Influencers Draw on Advertising to Influencers Draw on Advertising to Fuel Content in WOM ConversationsFuel Content in WOM ConversationsInfluencers Draw on Advertising to Influencers Draw on Advertising to Fuel Content in WOM ConversationsFuel Content in WOM Conversations
54% of influencer’s brand conversations
include references to marketing or medialed 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
• 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
Conclusions
• Powerful new tool that enables us to demonstrate to advertisers the value of the CNN viewer and cross-platform user
CNN & Keller Fay Group