Deep Decoding | How to Avoid the “Pitfalls” of Influencer Marketing

Since the beginning of spring 2018, various internet celebrity products have emerged one after another: from the internet celebrity watches with Peppa Pig tattooed on them, to a certain internet celebrity milk tea brand , from the "internet celebrity" way of eating beef sauce and rice at Haidilao , to the ancient "internet celebrity" city - Xi'an. It seems that as long as the word "Internet celebrity" is added and the Internet is used to fuel the trend, it can arouse the public's enthusiasm for consumption. The product is already like this, so one can imagine the scale of the industry behind those internet celebrities who truly have millions of fans.

According to the "2018 China Internet Celebrity Economic Development Insight Report" jointly released by iResearch Consulting and Sina Weibo recently, as of May 2018, the total number of fans of Chinese Internet celebrities has reached 588 million, and the scale of the Internet celebrity economy will exceed 2 trillion. What is the concept of 2 trillion? It is equivalent to the GDP of the entire Hong Kong region in 2017.

Just like the high box office appeal of popular movie stars , the consumption influence of internet celebrities on their fans has been proven by economic data on paper. As a new business model spawned by commercial value and market demand, internet celebrity marketing is developing rapidly, harvesting brand owners' advertising budgets and fans' account balances.

So what exactly is “influencer marketing”?

As the saying goes, only by knowing where you came from can you understand where you are going. Before analyzing influencer marketing, let’s first review the history of the evolution of Chinese influencers and understand how influencer marketing has gradually transitioned from wild growth to today’s industrialized operation.

Internet celebrity era 1.0 – Text era: On April 20, 1994, a 64k international dedicated line was connected, and China's Internet era officially began. Due to technological limitations, text became the main carrier of information at the time. A group of literary youths with both literary skills and talent, such as Pizi Cai, Annie Baby, Jin Hezai, and Ning Caishen, pioneered Chinese online literature through online writing, and they also became the first batch of "Internet celebrities" sought after by young people.

Internet celebrity era 2.0 – Image era: After the millennium, with the increase of network bandwidth, the Internet ushered in the image era. The number of netizens increased, and the public needed to release emotions. Therefore, grassroots Internet celebrities such as Sister Furong, Sister Feng, and Guo Meimei became popular through the "ugly culture" of self-deprecation, ugliness, and seeking attention through posting pictures. At this time, the hype, packaging, and monetization of Internet celebrities gradually matured.

Internet celebrity era 3.0 – e-commerce era: After 2010, based on the integration of information, social and e-commerce business closed loops, "Internet celebrity" officially became a marketing methodology. E-commerce Internet celebrities represented by Zhang Dayi and Daikin began to become opinion leaders in vertical fields. "Internet celebrity" became a sales entrance, "content" became a reason for purchase, and "opinion" became a brand endorsement. In a collaboration between Zhang Dayi and Meitu mobile phones, 2,000 mobile phones worth 2,699 yuan were sold out within one minute of being put on Taobao . This also means that Internet celebrity marketing has entered the monetization era under the empowerment of e-commerce.

Internet celebrity era 4.0 – content era: Since 2016, the rise of short videos and live streaming has spawned self-media Internet celebrities such as Papi Jiang and Office Ono. While content has become the key to success, it has also raised the threshold for becoming an Internet celebrity. Various platforms have begun to delve into content, and through the incubation of Internet celebrities in various fields and the production of high-quality content, they have completed diversified commercial realizations such as advertising endorsements, e-commerce diversion, commercial activities, and performing arts cooperation.

Looking at the changes in Chinese internet celebrities over the past two decades, it is not difficult to find that the historical turning point when internet celebrity marketing truly became a marketing model was based on the integration of social media and e-commerce platforms. The purchasing power of fans of e-commerce internet celebrities was released, creating a phenomenal "internet celebrity economy." Especially for foreign brands, influencer marketing has become their first choice to tap into the Chinese market.

Let’s take an example from the industry: In May 2018, VERVE, a new high-end hair care brand under Unilever, was preparing to launch new products in China. They chose Internet celebrities to help this new brand "break the ice" in the Chinese market. Through off-site promotion and on-site sales, they sold 14,000 bottles within three days of listing. For a foreign brand with no reputation, this result is amazing.

The success of the internet celebrity marketing model has directly intensified the competition for high-quality internet celebrity resources. One type of company chooses to collect internet celebrity resources and act as a middleman to make a profit from the price difference; another type of company chooses to incubate in the early stage, monetize through marketing in the mid- and late stages, and embark on the path of industrialized operation. With the entry of capital, the industry structure has become clearer. The former has gradually lost its competitiveness, while the latter has slowly grown and has a new institutional definition - MCN. Since then, the commercial hub of influencer marketing has been formed.

Why do MCN agencies emerge?

MCN is actually a foreign word. Its full name is "MultChannelNetwork". It was born on the foreign video website Youtube and means multi-channel network. In foreign countries, MCN refers to the combination of high-quality PGC or UGC of different types and contents under the platform to ensure the continuous output of content and ultimately achieve commercial monetization. In the domestic marketing context, MCN is more like an internet celebrity agency . It takes internet celebrities as the center, outputs content on multiple platforms such as Weibo, WeChat , Douyin , Xiaohongshu , and Bilibili , and completes targeted marketing mainly through brand implantation, joint endorsements, and e-commerce diversion.

From "individual combat" to "group army model", the symbol of the industrial operation of internet celebrity marketing is the emergence of MCN agencies. The birth of every new thing will inevitably involve changes in the overall environment. In 2016, the number of MCNs cooperating with Weibo was only 150, while in 2018 this number will exceed 3,300. The industry boom can be roughly attributed to three reasons:

New consumer force: Those born after 1990 are born internet natives. Growing up in an environment with increasing material abundance, they are more willing to filter out information that is consistent with their own values ​​and follow influencers who have similar tastes and personalities to themselves, completing the transformation of consumption behavior from "the most cost-effective" to "I like it". Young female fans, in particular, have become the main consumer force in the closed loop of influencer marketing.

Traffic solidification: From TV to computer to mobile phone, the change of media from large screen to small screen has created a traffic dividend. The rise of social platforms such as Weibo and WeChat, and even the emergence of short video content platforms such as Douyin and Kuaishou , have quickly replaced traditional media and divided up users' time. The " Matthew effect " between platforms has basically solidified traffic on top social platforms such as Weibo, WeChat, and Douyin, and has also enabled MCN organizations that use various social platforms as marketing bases to develop rapidly.

Business transformation: As mentioned earlier: "Internet celebrities" have become a sales portal, "content" has become a reason for purchase, and "opinions" have become brand endorsements. This sales closed loop based on brand-internet celebrity-consumer has been verified by the market. It can be seen that in the past, business pursued "brand + channel ", but now business pursues "internet celebrity + community " . MCN has mastered the routines of creating internet celebrities and operating fans, but at the same time, the quality of internet celebrities and content is testing the survival of MCN.

So, how do MCN agencies do internet celebrity marketing?

At present, domestic MCN agencies can be roughly divided into three types: e-commerce MCN, pan-entertainment MCN, and media agency "MCN". The different natures of the agencies also determine their different characteristics in internet celebrity marketing.

1. E-commerce MCN: As the name suggests, e-commerce MCN is an MCN organization with e-commerce influencers as its core matrix. The most representative one is Ruhan, the company behind the e-commerce queen Zhang Dayi. During the Double Eleven period in 2017, Zhang Dayi's store achieved an astonishing performance of over 100 million yuan in half an hour, which was Ruhan's masterpiece. The core competitiveness of e-commerce MCN lies in its high-quality fan base and strong e-commerce monetization capabilities. As mentioned earlier, the key point of the emergence of Internet celebrity marketing is the connection between social media platforms and e-commerce platforms. Off-site product promotion and on-site product sales have become the basic model of e-commerce MCN.

2. Pan-entertainment MCN: As short videos and live broadcasts become popular, fans' demand for personalized content has begun to explode, leading to the rise of a large number of pan-entertainment MCNs. If e-commerce MCN is the ultimate goal of commercialization, it is because it has a complete internal business logic from supply chain to channels (Internet celebrities) to capital transactions, then pan-entertainment MCN has taken another path: by discovering and operating Internet celebrities in various segments, personal IP shaping is achieved, such as Office Ono in the food field and Iron Pipe Coach in the fitness field, thereby achieving commercial monetization mainly through advertising endorsements and film and television cooperation.

3. Media agency "MCN": This type of "MCN" agency cannot actually be called MCN, because it does not have any ability to incubate Internet celebrities and produce content. It is just a porter of Internet celebrity resources. At a time when the internet celebrity market is not yet mature and industry chaos is still frequent, this type of "MCN" is located between brand owners and advertising companies, earning the difference by relying on the information asymmetry between the two, and it is difficult to create real value for the brand.

Perhaps many people's understanding of influencer marketing is still at the stage of "influencers recommend products to fans and influence fans to make purchases", but as the industry has developed to date, influencer marketing in a broad sense has already encompassed a series of sophisticated operations such as influencer incubation, personality positioning, content planning, advertising planning, e-commerce operations, etc., and it is this kind of MCN with sophisticated operations that is truly favored by brand owners and can create market benefits for them.

It is worth mentioning that in the past two years, with the trend of Taobao's contentization, there is a profession that has rapidly become popular, that is, Taobao anchors. Many people will ask whether these anchors’ live broadcasts of selling goods are also internet celebrity marketing? First of all, we need to clarify the essence of the work of Taobao anchors, which is to introduce a large number of products in a short period of time , and then achieve sales by attracting price-sensitive people through low prices. Therefore, their behavior is more like "shopping guide promotion" rather than internet celebrity marketing. Then you readers may ask again, Taobao anchors are at least good at selling products, but what can internet celebrity marketing bring to the brand?

1. Precise exposure: Compared with the indiscriminate coverage of traditional media, the advertising orientation of influencer marketing is more precise. By outputting high-quality content through influencers who match the brand tone, brands can reach the target audience more directly. On the other hand, iResearch data shows that 89.8% of Chinese users recognized and accepted mobile social network advertising in 2017. To some extent, this also represents the audience's high recognition of internet celebrity marketing.

2. Sales boost: Such a high mobile social network advertising support rate means that fans recognize the creative content and promoted brands, and also indirectly proves the profound influence of the personal charm and professional endorsement of the Internet celebrity on the fans. When this influence directly acts on the fans' consumption decisions, the value of the Internet celebrity (mainly e-commerce Internet celebrities) is far higher than the low-price promotion of Taobao anchors, that is: attracting young fans who pursue quality of life at full prices, while improving sales conversion , it also accumulates positive perceptions such as "high quality" and "high-end" for the brand.

3. Product reputation: As mentioned above, it is the recognition of the value concept of quality of life and the transformation of consumption behavior from "the most cost-effective" to "I like it" that makes fans naturally close to the brands recommended by Internet celebrities. With the high communication efficiency of social platforms, product reputation gradually accumulates and even explodes, and the so-called "Internet celebrity hot products" are produced in this way.

However, amid the prosperity, chaos has frequently occurred in the industry. What "pitfalls" should internet celebrity marketing avoid?

1. Fan bubble: According to data from Weibo, the proportion of internet celebrities who have fake fan counts is 69%, which means that 7 out of 10 internet celebrities have fake fan counts. The so-called fraud is not the random distribution of some low-activity fans by Weibo officials, but refers to the Internet celebrities actively buying fans to create the "illusion of a big V. " Therefore, when brands are looking for influencers to cooperate with, they should first try to choose influencers who are contracted by well-known MCNs; second, they should try to choose e-commerce influencers. Internet celebrities who have passed the test of the e-commerce market often have more real fans, and their personal opinions are more valuable, which can effectively reduce the selection risk of brands.

2. Data falsification: The traffic data brought by influencer marketing is certainly good-looking, but beneath the surface, buying internet celebrity traffic has become another gray industry chain after falsifying the number of fans, which seriously violates industry rules. However, there are three tips for identifying the quality of interactive content: first, check whether the comments are highly similar and whether there is any excessive praise of the brand; second, check the nicknames of fans who leave messages. If the nicknames of most commentators show strange random combinations of words and letters, they must be water armies; third, if you cannot directly identify the authenticity of fans, you can click on their Weibo homepage. If they mainly forward messages and basically have no original Weibo posts, they are undoubtedly water armies. It is foreseeable that brands will pay more attention to the integration of product and effect brought by influencer marketing, rather than simply reposting, commenting and liking. It can be seen that the selection of excellent MCN agencies and high-quality influencers has become a top priority.

3. Unsophisticated agencies: The prosperity of internet celebrity marketing will inevitably attract the covetousness of some unsophisticated media and public relations companies. However, the industry structure has been determined, and high-quality internet celebrity resources have been divided up by the top MCNs. So how can these companies get a piece of the pie? That is to take advantage of the information asymmetry between the brand and the MCN agency, claiming to the outside world as exclusive internet celebrity resources, but actually making a profit from the price difference by acting as a middleman. This will inevitably require agencies to establish their own official channels and brands to optimize their own media channels, with both parties jointly promoting industry standardization.

To sum up, the road to marketing is by no means a smooth one, and influencer marketing, as a new marketing model, while having unique advantages, also faces a series of pain points and minefields. But the good news is that the entire industry has entered the stage of pruning and trimming, and fake internet celebrities and non-standard institutions will gradually be eliminated by the market. Just in June this year, Unilever CMO KeithWeed announced: Unilever will permanently refuse to cooperate with social media celebrities ( KOLs ) who buy fans and falsify data. I hope that in the near future, a clearer industry environment will be left for MCN agencies, brands, internet celebrities and fans.

More than 20 years have passed in the blink of an eye. Every "Internet celebrity" represents every node in how the Internet has changed China, from BBS to blogs, from Weibo to WeChat, and then to today's various novel apps. Things on the Internet are changing, but the essence of marketing has not changed. The principles and techniques of MCN, the pros and cons of internet celebrity marketing, as a marketer , I am happy to see the emergence of these new models. As the Internet enters the second half, what kind of iterations internet celebrity marketing can achieve is worth everyone's expectations.

Author: Hangzhou Ruhan, authorized to publish by Qinggua Media .

Source: Hangzhou Ruhnn (Ruhnn_1818)