CHAPTER 1

The Influencer Marketing Relationship Framework

NFL Engages Generation Z

The powerhouse brand, the National Football League (NFL), is a mature brand but a dominate brand. However, about three years ago, the organization noticed that it was beginning to see a slow loss of young fans. “The brand began to feel a bit stale and overly conservative. I like to look at brands like people and the NFL was starting to seem like a cranky old man,” said Tim Ellis, executive vice president and chief marketing officer in a session during AdWeek’s Social Media Week LA in June 2021. “We needed to manage it now or we would regret it later.” So, they begin a targeted effort to connect with the youth segment and embrace youth culture and a huge piece of this was engaging with the players outside of football. This made sense since this is who the players are. The NFL’s strategy was based on connecting passion points for Generation Z, including fashion, music, wellness, and gaming. This was particularly important in 2020 as the NFL was looking to connect to fans and create a new experience since there would be no fans at games. The NFL did this using an influencer relationship marketing framework (discussed as follows) that included elements of content marketing, native advertising, and influencer marketing. For content, they focused on several things but one of the most visible was the Showtime Cam. Since there were no fans in the stadium, the game environment lacked energy. In collaboration with Bud Light, the Showtime Cams were installed in stadiums so that fans and players could celebrate touchdowns together. On Twitter, NFL fans can tag their tweets with #ShowtimeCam and #BudLightSweepstakes to participate in the Showtime Cam during a regular season game. This allowed both Bud Light and the NFL teams to partner to engage fans in different ways given the pandemic constraints. The NFL was also able to use the content across all social media platforms. In order to celebrate the ProBowl, the NFL partnered with Verzuz, which is an online series by Swizz Beatz and Timbaland, that pitted players on their 10 best on field highlights (even going back to high school and Pop Warner days). This was a great way to increase the excitement around the ProBowl and really highlight the players. In terms of influencers, the TikTok tailgate was a collaboration with TikTok and Miley Cyrus for a Superbowl pregame show held for health care heroes. Cyrus ended up posted about the event as well as other guests at the event. The NFL supports players by providing content and media support with everything from gaming to fashion, including supporting product collaborations. The NFL also supported players and causes such as Carl Nassib and the Trevor Project to support LGBTG+ teens and ways to remember and support victims of social justice all of which are important to players and younger fans. NFL, in this case, reached out to new influencers, used new platforms, and other platforms in new ways and found better ways to support the creative efforts of its players. As such, it found new ways to connect with Generation Z.¹

How Has Marketing Changed?

Marketing has changed dramatically. And it continues to change as the pace of technology increases and audiences continue to adapt their media habits and consumption patterns. For years, marketing and advertising were dominated by personal sales forces, television advertising, newspaper and magazine advertising, and direct mail. Audiences were considered primarily from demographic perspectives. Descriptions like women 18 to 24 with a household income of $40,000 would dictate the marketing mix. Most people got their news from the evening new shows or from the many newspapers that existed in large cities and small communities.

Over the past several years, marketers have shifted marketing budgets from traditional advertising (such as television ads and newspaper ads) to digital advertising (such as search and display ads). In 2020, marketers spent $121 billion on digital advertising in the United States, representing 54 percent of total advertising spent. This is expected to increase to an estimated $153 billion by 2024. The retail industry is the biggest spender in the digital advertising categories. Facebook is the social media platform that gets the most as social media spending represented $37.9 billion in 2020. Programmatic digital display advertising is a use of technology that allows brands to put display ads on publisher websites and represented $63.36 in 2020 with search advertising a close second at $62 billion. Digital video advertising, the placement of ads online based on keywords, represented almost $10 billion in 2020.² Indeed, a 2018 CMO Survey reported that social media spending (of all types) represents 13.8 percent of brand’s total marketing budget.³ Overall, marketers have shifted their budget to digital and social media platforms and away from traditional platforms like television and print media.

There are several reasons for this shift in strategy. First, traditional marketing strategies are “push” strategies meaning that the advertising messages are designed and placed to interrupt audiences as they are consuming media such as television shows or newspapers. As consumers have gained more control of their time and media access, push marketing has fallen out of favor relative to pull marketing strategies. The American Marketing Association defines pull marking as a brand’s attempt to attract customers via providing valuable content, usually delivered via social media. It is the heart of content marketing, which is described later. Increasingly pull marketing on social media allows for more transparency between consumers and brands, creating a deeper opportunity for relationship building between people and brands. Communication becomes more akin to a conversation since the communication is no longer just one way. Additionally, pull marketing provides a solution to ad blocking technology and the general increase in advertising clutter over the past few years. All are trying to gain attention from consumers, but as consumers gain more control, push marketing is ignored.

Second, more people are using social media in general ($4.14 billion globally)⁴ and people are spending a lot of time on social media. While there are many ways to look at social media, Appel and colleagues define social media as “a technology centric—but not entirely technological—ecosystem in which a diverse and complex set of behaviors, interactions, and exchanges involving various kinds of interconnected actors (individuals and firms, organizations and institutions) can occur. Social media is pervasive, widely used and culturally relevant.”⁵ They further argue that social media has essentially “become almost anything—content, information, behaviors, people, organizations, institutions—that can exist in an interconnected, networked digital environment where interactivity is possible” (p. 80). In the United States, the average adult spends two hours and three minutes on social media each day. Also, note that this probably does not accurately count younger audiences as 13 is the official age for an account. It’s estimated that younger audiences spend more than three hours each day on social media, primarily on their mobile devices.⁶ While Facebook is still the largest social media platform (with 1.79 billion daily active users), there have been several other options gaining attention. Instagram is the photo- and video-based social platform where the average user spends an average of 27 minutes daily. More than 64 percent of users of Instagram are between 18 and 29, great for engaging Millennials and Generation Z audiences. The average U.S. adult spends, on average, 24 minutes each day with YouTube (the most visited social media website in the United States) and the site is seeing an increase in the time spent by younger audiences.

New (and nearly new) platforms are gaining attention especially from young audiences. Snapchat, once thought to be dead, has made a major comeback with 46 million monthly active users. Users spend an average of 28 minutes daily on Snapchat, and it is one of the most popular social media platforms with Generation Z. Snapchat was also named the most innovative company of 2020 by Fast Company. TikTok is one of the stickiest platforms for younger audiences. TikTok is a video sharing platform specializing in short 15-second videos. More than 32 percent of users are aged 10 to 19 and another almost 30 percent are aged 20 to 29. Users spend an average of 46 minutes on TikTok each day. TikTok was the most downloaded app in 2020 with more than 100 million U.S. users (TikTok is based on China and was merged with Music.ly in 2018).⁷ Twitch is a live streaming platform for video games. The average user spends more than 95 minutes daily on the platform, and the platform is particularly popular with younger (and male) audiences.⁸

Third, given the explosion of social media platforms, there are many more opportunities for smaller, more niche products and audiences. The concept of the long tail explains how many products can be sold in small quantities, rather than only relying on the most popular products.⁹ Technology, such as that which powers Amazon, Apple Music, and Spotify, allows people to have access to millions of different products easily and cheaply. This idea has also enabled many people—not just celebrities—to influence the attitudes and behaviors of others. Influencers with small numbers of followers but with higher engagement have been found to be very successful for many brands using influencer marketing.

Fourth, given the ubiquity of digital marketing and, more specifically, the usage of smartphones, brands think about digital and mobile strategies first as opposed to adapting traditional marketing messages to these newer formats. Research shows that people are spending more time on their smartphones or other mobile devices (3 hours and 10 minutes on average in 2019) and are also multitasking more than ever.¹⁰ Taken together with the decline in push marketing, more consumers are searching, buying, and being influenced online. But privacy is also a bigger issue. Users are pushing back on how their data are shared and ad blocking technology is increasing, making it harder to target and retarget advertising to them.

Last, despite (or because of) the lack of trust in organizations and institutions, people trust people.¹¹ Research from Nielsen says that 92 percent of people are likely to trust a recommendation from a friend.¹² This is much higher than trust levels with brands or companies. And despite U.S. obsession with celebrities in all forms, this trust does not necessarily translate to them. Increasingly, Millennials and Generation Z are turning to influencers and their recommendations. One survey stated that 82 percent said they were likely to follow the recommendation of influencers.¹³ All these trends have led to brands pursing a mobile first strategy and the explosion content and social media influencers.

Categorizing Digital Marketing Efforts: Paid, Owned, and Earned Media

From the perspective of a brand, what is content and how (and by who) is it distributed? Brand communications in social media are defined as any “piece of brand-related communication distributed via social media that enables internet users to access, share, engage with, add to and co-create.”¹⁴ In an effort to build out integrated marketing communication strategies, many brands have categorized their marketing efforts, especially their digital marketing strategy as paid, owned, or earned media. Paid media is purchased advertising space, whether as paid search advertising on Google or sponsored posts on Facebook. This includes pay per click, display advertising, retargeted advertising, paid sponsorships, and paid social media advertising. Brands purchase space to display their message, and it is used to boost social media content. Additionally, traditional media is considered paid media, such as radio, magazine, newspaper, and television advertising, all of which has fallen out of favor. Owned media is simply content that is created by the brand and which is then disseminated on brand websites and social media platforms. This includes videos, articles, webinars, and a host of other tactics. This also includes brand-specific web development. Owned media also includes efforts at search engine optimization (SEO) that allows audiences to find quality content without the brand using paid media. Earned media, with roots in PR, happens when content is shared and talked about. This includes online and offline mentions, shares, reposts, and retweets of content about the brand (both positive and negative). Much of paid, owned, and earned media is manifested as content marketing, native advertising, and influencer marketing.

That said, these three strategies—content marketing, as the primary way to create valuable information for customers; native advertising, that seeds that content on social media platforms by paying for space; and influencer marketing, which serves as both a content creation tool and an amplification tool to reach targeted audiences—are separate but related. Elements of content marketing and native advertising converge with influencer marketing making it extremely effective at changing consumer behavior, especially for younger audiences. Figure 1.1 shows that convergence.

In order to better understand these strategies, let’s take a look at each of them in more detail.

Figure 1.1 Influencer marketing relationship framework

Content Marketing

One of the marketing strategies that has gained popularity, especially with the growth of social media, is content marketing (also referred to as owned media). The Content Marketing Institute defines content marketing as “a strategic marketing approach focused on creating and distributing valuable, relevant and consistent content to attract and retain a clearly defined audience within the objective of driving profitable customer action.” A majority of brands utilize content marketing in some way to increase sales, save money, and attract more loyal customers. In fact, it is considered the most effective tool in the marketing arsenal.¹⁶ Content marketing is an important part of digital marketing relating to SEO, PR, and paid advertising. It is often used at different points of the purchasing funnel—from general awareness to point of purchase depending on the message and the industry. For example, let’s assume a customer is investigating whether or not to purchase a new project management software. Early in the search, the customer may read a blog article comparing several options and then watch a video highlighting the features. This can then lead to signing up for an informational webinar before finalizing the purchase. Each of these—blogs, videos, and webinars—are examples of content that will be more or less effective depending on that purchase funnel interaction.

Research shows that content marketing is gaining ground. According to the Association of National Advertisers (ANA), spending on content marketing has seen a 73 percent budget increase in the past three years. More than 70 percent of marketers invest in content marketing, and while most are maintaining their budget, 24 percent are expecting to increase that investment. Marketers are using content marketing to target multiple audiences, and 40 percent of marketers say that content marketing is very important to their overall marketing strategy.¹⁷ As demand has increased, marketers have outsourced some of their needs to agencies or content creators. They have also built in-house resources. An ANA survey stated that 78 percent of marketers have some sort of in-house agency function, a large increase from the prior five years.¹⁸ One way that brands also obtain content is through user-generated content, which is content that has been collected and created by regular customers and shared on their branded social media. This is proven to be an increasingly effective manner of gaining access to content, especially given its authenticity.

Brands report an 84 percent increase in the amount of content created in the past two years.¹⁹ The primary types of content include videos, e-books, blogs, infographics, photography, case studies, white papers, checklists, trend pieces, interviews, industry highlight features, life and advice articles, topical overview videos, and lists.²⁰ Content marketing is effective for both business-to-consumer and business-to-business. Videos are the most effective forms of content marketing, specifically promotional videos and brand storytelling videos, and as such, marketers are increasing their investment in video given the higher levels of engagement especially with younger audiences. Most brands are creating content for their own websites as well as Facebook, which continues to be the primary place where content is placed. Content marketing continues to grow, providing more demand for content creators.

Native Advertising

Native advertising is another way that marketers can distribute content, primarily through purchasing ad space.²¹ It is described as an “umbrella term that refers to many different ad types, such as those appearing in keyword searches (e.g., Google Ads), on publishers’ websites (e.g., Wall Street Journal) and social media platforms and feeds (e.g., Facebook).”²² Native advertising is sponsored content describing any paid advertising that takes the specific form and appearance of editorial content from the publisher itself.²³ To many, native advertising is in the eyes of the beholder. Native advertising is typically high-quality, useful content that is highly targeted and is largely found on social media platforms (e.g., Facebook, Instagram, and LinkedIn) and brands pay for the placement of content on these platforms via several native ad formats. However, because native ads are similar to the format of the platform, it does not necessarily look like advertising. It should be noted that the amount spent on paid social is estimated to be $58.66 billion in 2021.²⁴

Brand spending on native advertising is estimated to be $52.75 billion in 2020, and research shows that it is more effective than traditional digital advertising such as display advertising. This spend represents a 20 percent growth in the past four years. Native advertising is moving to be more hyper-targeted, and retargeting will continue to be effective in conversion.²⁵

There are various content forms of native advertising including videos, images, infographics, and articles. The audience experience remains intact because native ads are delivered in a way that intentionally looks like other content on the platform. The Internet Advertising Bureau (IAB) set forth six key issues to consider when determining categorization of native advertising (regardless of where they are placed). They include the following:²⁶

Research does that 77 percent of people did not realize that native content was advertising making the issue of disclosure particularly important.²⁷ Disclosure language and placement includes language such as “sponsored content” that shows up alongside the native ad or #ad. Sometimes sponsored content is created by a third-party content producer (who can be influencers in the industry) and is usually a sponsored video and/or a social media post. Other disclosure language options include “presented by,” “featured partner,” or “suggested post.” The IAB also outlined several advertising options including the following:

Generally, consumers fail to recognize and understand native ads as paid content, which leads them to respond more favorably to these new formats than other forms.²⁸ As such, the FTC has made native advertising an enforcement priority. There will be more information on disclosure and regulation in Chapter 6.

Essentially brands have developed content in various forms of content and then seed them on social media platforms by paying for native advertising. However, many brands struggle with this. No matter how hard they try, they still approach it from an advertising lens as opposed to engaging authentically with customers. Despite all of the conferences and trainings, brands are unable to create content that is compelling as influencers and are unable to reach unique audiences in the same way that influencers can. Most customers are not interested in a relationship with a brand.²⁹ They are more interested in relationships with people, and social media happens to be the domain for those relationships. And influencer expert Neal Schaffer states that brands should shift their investment of time and money from paid ads and paid social to “joining the conversation with customers who have some influence on social media … people rule social media and always will.”³⁰ Which leads to the third element—influencer marketing.

Influencer Marketing

Influencer marketing builds upon the age-old model of using celebrity endorsers to increase brand awareness and product purchases. However, influencer msarketing doesn’t only depend on celebrities. Rather, the more effective strategy is leveraging people who have amassed an audience on social media platforms as key brand advocates. In a nutshell, an influencer is someone who posts to social media in exchange for compensation. Sometimes the influencer is a celebrity known for something (e.g., actor and musician) or s/he can be someone who has built a large following on social media platforms like YouTube, Instagram, TikTok, and Twitch, usually in a specific area of interest or industry (e.g., gaming, fitness, beauty, and cooking). Influencer marketing is the fastest growing part of the marketing mix with brands spending $10 billion in 2020,³¹ and eMarketer estimates that influencer spending (only the payments to influencers—not free products or paid media) will grow more than 30 percent in 2021 to $3 billion and more than $4 billion in 2022.³² Research shows that 75 percent of advertisers reported using influencers in their marketing strategies and 43 percent expect to increase spending.³³ Most brands reportedly have a dedicated influencer marketing budget, and 91 percent believe influencer marketing is an effective strategy. To meet these needs, the influencer marketing industry has exploded with more than 1,120 influencer marketing focused platforms and agencies, with 380 of them created within the past year.³⁴

Additionally, influencer marketing seems to garner higher levels of trust with consumers than other strategies. An Edelman study indicated that 63 percent of consumers trust what influencers say about brands, even more than the brands. Influencer-produced branded content is more organic, authentic, and direct to potential consumers than brand-generated ads. In fact, brands don’t necessarily need celebrities, despite some high-profile examples like Kylie Jenner and The Rock. One survey showed that consumers are more likely to purchase based on a recommendation from a noncelebrity than a celebrity which has led to the increase in the use of so-called micro-influencers who are people with smaller followings but high engagement audiences.³⁵ An ANA survey found that more brands are using midlevel and micro-influencers and fewer are using macro-influencers with large audiences.³⁶

Interestingly, there are several factors that have increased the importance of influencer marketing. First, the global pandemic and trends in youth consumption habits have increased their influence with their younger audiences.³⁷ One study showed that influencers are as “influential as ever” especially with 13- to 18-year olds.³⁸ Generation Z admits to following more influencers than celebrities and also are more making purchases based on this advice.³⁹ Additionally, influencers have been at home over the past year and have been able to spend more time on content creation, and Generation Z is spending more time at home and online and less with people in person due to the pandemic. Second, social media traffic increased over the past year—Instagram and Facebook by 40 percent—for those under 35 years old, and people are viewing a variety of content types and topics (e.g., meditation, fitness, cooking, and self-help). Last, influencers have been increasingly effective at creating content that is valuable to their audiences, and as such, they are able to deliver targeted messages to hard-to-reach audiences.⁴⁰ This is resulting in high engagement rates and is especially the case for influencers with small numbers of followers (called micro-influencers and nano-influencers).

This comes on the heels of several reports that earlier questioned the efficacy of influencer marketing. The ANA conducted a major study in 2018 that found that while 75 percent of companies engaged with influencers, only 35 percent were convinced it was effective.⁴¹ Brands were concerned about influencers having fake followers as well as the dilution effects of influencers who sponsor too many brands. Additionally, there are continuing issues around disclosure.⁴² However, some of the concerns have dissipated in the past year given the return on investment (ROI) and attention that influencer marketing has garnered.

While influencer marketing is important, it rarely works in a vacuum. Let’s take a look at an iconic new brand that has revolutionized a product category.

Blue Apron Is Cooking for Real People

Blue Apron is an ingredient and recipe meal kit service that delivers fresh ingredients to homes across the county. While it was an innovator in the meal prep category, it is also in a very competitive landscape. In order to gain awareness, Blue Apron used the influencer marketing relationship framework but using content marketing, influencer marketing, and native advertising. While it would make sense to partner with chefs and foodies, Blue Apron instead matched their influencers with the personas of their customers. The idea was to promote that a home-cooked meal is accessible to everyone! First, Blue Apron identified its customers’ pain points. The overall pain point for everyone was that it was tough to prepare a healthy meal at home quickly. Blue Apron’s customer is overwhelmingly female (83 percent), is approximately 29 years old, and lives in the city. Second, Blue Apron selected three audiences to focus on and then matched an influencer to that persona. They used coupon codes to track effectiveness. Influencer created content (content marketing) and posted to their audiences (influencer marketing), and Blue Apron amplified it via paid social media (native advertising).

It is evident that influencer marketing will be an important addition for some brands (and potentially a main driver for others). However, there is much to be learned about influencers—these creators who in some cases have built business (and even empires) from cultivating an audience of followers, creating content that resonates with this audience, and partnering with brands that add value to their audience. The next chapter dives into the creator economy and I will provide a brief glimpse of who they and where influencer marketing fits into the larger Creator Economy.