MarketingDojo#69: ⚛️The Nano Rainmakers💰
High ROI influencers, the state of search, "unsolicited advice" in marketing, importance of scale in advertising and more.
Hello Everyone,
Happy hump day. I hope this week is treating you well.
As for me, I'm feeling old!
To motivate myself to make short videos, I made an investment: I bought these Rode wireless microphones.
The trouble: I can't quite figure out how to use them effectively, especially with the receiver hanging below the phone recording me!
I guess it's time for some coffee with young TikTokkers to learn their "tech stack" and "hacks." This short video creation pursuit is transmuting me into a tech dinosaur, lol.
Anyway, here's what we will cover in this newsletter:
🤳 Maximizing revenues through influencer marketing
📉 Text-to-yawn generators are here
🔍 The state of Search 2024
😂 Meme-time: Surviving in a world filled with "marketing experts"
🎥 Streaming giant, advertising minnow
And lots more.
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With that, let's dive right in!
Nano Ninjas: Influencer Marketing For Superior ROI.
Micro, Nano, Macro- Which type of influencer can give you the best bang for your buck?
The study "Revenue Generation Through Influencer Marketing", published in the June edition of the Journal of Marketing, developed pointers for European direct-to-consumer businesses.
The study focuses on Instagram and measures three key aspects of ROI:
Revenue per Follower: Revenue / Number of Followers
Revenue per Reach: Revenue / Number of Followers who viewed the sponsored post
Return on Influencer Spend (ROIS): (Revenue - Cost) / Cost
Findings indicate that nano-influencers deliver a significantly higher ROI across all three metrics than micro- and macro-influencers. This superior ROI is primarily due to their higher engagement levels.
The paper meticulously established the relationship between influencer followership levels and return on investment (ROI), drawing from three sources:
Quantitative: Dataset from a leading European DTC fashion firm, encompassing 2,808 influencer-specific discount codes linked to 1,881,533 product sales.
Textual: A textual analysis of 570,603 follower comments and 136,714 influencer replies across different followership levels.
Field studies: Three field studies by recruiting influencers & tracking results using URLs.
Learning from mistakes can be extremely costly, especially when budgets are tight. Studies like these are invaluable for running influencer marketing campaigns with a single-minded focus on conversion and performance.
The Scary State of Search 2024.
Q: How much of Google's search results lead to zero-click results?
A: Too many!
SparkToro's research, in collaboration with Datos (an SEMRush company), shines a light on the current search landscape. Marketers might want to update search expectations after diving into this analysis!
The study spans US and EU customers, revealing similar trends across these geographies.
For every 1000 web searches in the US:
360 ends on the open web, where content marketing teams aim to attract traffic through SEO and quality content.
A staggering 585 are zero-click searches, where the searcher finds the information they need right on the Google search page.
285 searches lead to the use of Google properties such as maps, images, and news.
Only 10 clicks on a Google paid ad.
Even without the full rollout of the search generative experience, 87% of total searches in the US don't leave Google's ecosystem.
This trend will likely intensify as zero-click results improve with the advancement of large language models. Time to buckle up!
I wrote about zero-click search and its impact on web traffic here.
The Text-To-Yawn Generator.
In the last few weeks, two brands shared video ads created using Sora, a Gen-AI-enabled text-to-video generator. And it's a solid reminder that AI is a tool, not a strategy.
First, we have ToysRUs trying to bring their brand origins to life. Except there's a tiny hiccup—the child actor looks different in every frame. Continuity, anyone?
Then there's Motorola's "Styled By Moto" ad.
Their AI-created ad didn't get the same backlash as ToysRUs. Why? Because it was as exciting as watching paint dry. Without the AI backstory, the ad is utterly forgettable.
Creating this snooze-fest wasn't easy. Moto's campaign video took over four months of intense research. They used thousands of AI-generated images for stylish outfits and incorporated the iconic "batwings" of the Motorola logo. This Herculean task involved French agency Heaven and a suite of AI tools: Adobe Firefly, Midjourney, Krea.ai, Comfy UI, Hypic, Magnific.ai, ClipDrop, Luma, and Udio. ToysRUs went through similar AI acrobatics.
There's an arms race among brands to adopt AI in every aspect of business. Efficiency? Sure. Looking cool? Maybe. But mostly, it's the Fear of Missing Out (FOMO).
Do ads lacking insights and strategy, with their only selling point being
"Look, AI made this!" stands a chance?
Meme-time: The Resting Marketer Face.
One of the most annoying things about being a marketer is that everyone is full of advice on how to do better marketing. Over the years, I've gotten used to receiving "helpful tips" from colleagues who have never done marketing.
Today's meme features Dua Lipa starring as a marketer, expertly trained at receiving unsolicited "advice".
Streaming giant, advertising minnow.
Subscription-based platforms have ceilings to their growth. In a tight economy, the old-fashioned advertising-led model is back in its dominant position.
As Netflix is discovering, the advertising business relies on volume—both in terms of ad inventory and reach. There's no dipping your feet in the water; you have to jump right in to survive.
Over a year ago, Netflix introduced a more affordable membership tier with advertising. However, things haven't taken off quite as they hoped.
Netflix rules the streaming world with over 260 million subscribers, far ahead of Prime Video (200 million), Disney+ (153 million), and Apple TV (44 million). It's also highly profitable, boasting a 28% margin and $5.4 billion in profits in 2023. Meanwhile, Disney+ is grappling with $2.6 billion in losses.
The trouble in paradise? Netflix's growth rates are flattening. It's reaching the upper limits of subscriber-led growth in regions like the US and needs other sources of growth. Inflation-wary, price-sensitive customers can only be attracted by lower-priced tiers subsidized by advertising.
In advertising, Netflix lags behind Disney+, Prime Video, and even Paramount. It barely ranks in the top 10 for video ad sales.
Here's why:
Weak Rollout: Netflix couldn't deliver the impressions it promised early on.
Hyper-Competitive Space: Amazon and Disney are undercutting the market, offering inventory at prices that make Temu look expensive.
Slow to Scale: Disney and Prime Video offer advertising to all members with an option to pay more to avoid ads. Netflix's opt-in tier is slower to scale but more user-friendly.
Despite these challenges, Netflix has a lot going for it. Its upcoming investments in sports like WWE and NFL will create more ad inventory, allowing it to experiment with new ad approaches in streaming services.
From Netflix to Uber, many platforms are moving to become significant advertising players. But one thing is for sure—the advertising business is unforgiving. If they hope to survive, the new players in the digital media scene have a lot to unlearn to catch up with giants like Amazon, Google, and Meta.
Short-Stuff.
Pinterest enables the sharing of videos on their boards to Instagram. (Interesting growth hack).
TikTok announces its version of Amazon Prime Days. (Social Commerce v/s eCommerce).
After Apple, EU hits Meta with charges over unfairly targeted advertising. (Pay Up or consent model not enough)
Meta’s Threads reached a new milestone of 175 million users. (Twitter without the vibe is doing just fine.)
That’s a wrap on this week. Thank you for your time and attention. If you liked this week’s newsletter or found something interesting, please give me a like ❤️ or drop a comment🗨️. Your support helps drive the newsletter's discoverability.
Once again, thank you for your time. See you in your inbox next Wednesday.
Regards,
Garima Mamgain
P.S.: I've been thinking a lot about second-order effects lately.
Second-order effects are the indirect consequences of an action or event that occur after the initial impact. They are often unpredictable and non-obvious.
Two second-order effects caught my attention last week.
One made me chuckle: how an asteroid hitting the Earth led to mass extinction but also eventually gave us wine!🍷
The other made me reflect deeply: Nike's Supershoes have revolutionized long-distance running but are also creating inequality.
In 2016, Nike introduced the Vaporfly during the Rio Olympics. These super-shoes feature a carbon fibre plate, advanced foam, and reduced weight, collectively improving elite athletes' running speeds by 3-4%.
The impact of these supershoes is most profound in long-distance running, where records have been shattered at an unprecedented rate since the technology's launch.
Many compare these shoes to performance-enhancing drugs, arguing they provide an unfair advantage to their users. With the base model starting at $100, these shoes are far from affordable.
For years, running has been a lifeline for athletes in Kenya, offering a way out of poverty. However, these shoes have created a new divide between those who can afford them and those who cannot, erecting barriers in one of the most fundamental sports.
The sad truth is, there's no turning back. Supershoes have dramatically altered the sport to the point where we cannot simply rewind.
These changes have left new existential questions for Kenya's athletes who run as though their lives depend on it—because they do.
Please read the article and share your thoughts about the supershoes and their second-order effects on Kenya's running scene.
Lovely read as usual.
On influencers bit:
The big accounts/folks struggle due to fake/bot led scale and so metric don't translate that well when converted into ratios. A lot of the scale does not give the expected result.
As for nano, the curation, early followers, lack of fakes/bots is helpful but scaling your supply of nano influencers for overall desired scale becomes challenge. You need to deal with too many of those and then you hit quality/execution challenges.
Crazy space this has become!