Solid relationships with like-minded people are crucial in achieving personal or professional success. This is true for influencer marketing. Businesses can access the connections of reliable people with similar interests and values as the people they want to reach.
In this podcast, Sean Frank, CEO of Ridge, explains how influencer marketing helped scale his company into a multi-million dollar brand.
Working for an Agency When Starting-Up
We often see young entrepreneurs with minimal marketing skills tempted to start an agency from the ground up. This common mistake often leads to significant hurdles and potential failure.
Proven marketing experience is essential before launching such a startup. A great way to do this is by joining a well-respected agency to learn from the experts.
The agency-brand dichotomy
A good agency has experienced marketers with industry knowledge to learn from. At the same time, brands have their own way of doing things. This dichotomy makes exploring different strategies and techniques difficult.
Agencies carry out marketing campaigns, but whether they do well or not is the responsibility of the brand they're promoting. This dynamic must be carefully navigated to achieve success.
Working with agencies at Ridge
At Ridge, most things, such as their email campaigns and influencer program, are handled internally. They bring in select agency partners strategically to complement their in-house capabilities. Having a variety of creative output is good, and that's where agencies can be instrumental.
Allocating the Marketing Budget of a Multi-Million Dollar Brand
Marketing is essential to continued growth in a $100 million brand. But, allocating that marketing budget takes time and effort. Here are some key considerations:
- Invest more to get more: A significant investment is needed to achieve a revenue of $100 million. A realistic allocation would be to spend at least 33% of your budget on marketing. This percentage is necessary to generate the needed return on investment (ROI).
"If you want to make more revenue, you have to spend more money." - Sean Frank
- Sweet spot for influencer marketing: The sweet spot for allocating your marketing budget for influencers is somewhere between 10-20%. At Ridge, most of their influencer budget is spent on YouTube influencers.
- Gathering data and starting conversations: Collect data and find every possible influencer who could be a good fit. Create a streamlined email process to start reaching out and negotiating with them.
- Team dynamics: With a large part of the budget allocated to influencer marketing, resourcing a team is necessary. This team might include a director, full-time employees, and virtual assistants.
- The cost of influencer marketing: Be cautious to stay moderate in this area due to its expensive nature. Consider the overall cost of influencer marketing to ensure a well-rounded marketing approach.
Pay-for-Post vs. Product Seeding
Both pay-for-post and product seeding have advantages and disadvantages. The specifics of the marketing campaign dictate which strategy is more profitable.
- Pay-for-post deals allow businesses to partner with influencers to showcase their products or services. It's a great way to boost brand awareness. But it can be pricey, and there's no guarantee that the influencer's followers will interact with the content or buy.
- Product seeding involves sending free products to influencers hoping they'll try them and share what they think with their fans. This strategy can be less expensive than pay-for-posts, but it also has a lower level of control and may generate less buzz.
Further reading: Guide To Influencer Seeding in Influencer Marketing | Kynship
Here at Kynship, we're big proponents of product seeding. The team at Ridge, however, prefers paying for posts. They lean towards YouTube on paid-for post ads since it is a more male-centered platform that aligns with their demographics.
"We use paid-for-posts because of the platform and the fact that our resources are better spent on a more ROI-focused channel." - Sean Frank
Influencer Marketing Benefits and Drawbacks
Let's take a look at why influencer marketing can be an asset and potential drawbacks.
Why influencer is an effective marketing strategy
Influencer marketing has the unique ability to create brand affinity. Audiences get excited when their favorite creators land a sponsored deal. This helps build a good relationship between the brand and the people it wants to reach.
Additionally, working with trusted influencers can improve a brand's image. Ridge has established a strong reputation in the industry, allowing them to gain trust with influencers and secure more deals.
"Influencer marketing is the only form of digital marketing that can build goodwill with an audience." – Sean Frank
Drawbacks of working with influencers
While influencers can be a valuable asset, it's important to consider some of the drawbacks.
- Trust and credibility: It's tough to create a genuine community with people who are getting paid to be part of it.
- Alignment: It's possible to like an influencer's work but not agree with their values or image. It's important to choose someone who fits with the brand instead of going with what's popular.
- Focus and goals: If ROI is a primary concern, it may be best to pursue other channels. There are no guarantees that an influencer will drive sales.
Further reading: Macro-Influencer Campaign Flops (And What You Should Do Instead)
Getting Started With Influencer Marketing
Influencer marketing has become an indispensable tool for businesses to expand their reach. When used correctly, it allows brands to capitalize on the trust and loyalty of an influencer's following.
If you're new to influencer marketing and have $5-10 million in revenue, find ten creators you genuinely like and structure a deal with them. Remember that losing money on those deals is normal, and only some influencers will bring the desired results.
Influencer marketing can be risky, and it's not for the faint of heart. But the right approach and mindset can yield large benefits for brands looking to expand.