Does Influencer Marketing make sense for Start-ups and New Ventures?

Does influencer marketing make sense for new ventures? This post will outline that. As a brief note, I started one of the first social influencer agencies in Asia. So I’ve seen things from both sides of the coin, both the talent and brand side.

The general rule of thumb is that influencer marketing is a strong option if you are restricted to advertising because of your product or service. What are contemporary examples of restricted offerings as of this moment? Here are some examples: crypto / blockchain, marijuana products (THC and CBD), vape / smoking devices or flavors.

If you fall into one of the buckets mentioned previously, digital ad systems may restrict or prevent your ads from showing. In which case, influencer marketing becomes one of your only digital options period - especially on social media.

Influencer marketing is a trickier decision if you have a product or service that is not restricted on ad platforms (which is the most likely scenario). Typically, it is more expensive. Getting X result from Instagram ads is likely to more expensive than getting Y result from Instagram influencers.

Let’s evaluate Instagram for a moment. We’ll assume it’s an unknown if Instagram influencers are beneficial on a relative basis to performance marketing. The issue is that influencers with one million plus audiences will request an amount that is prohibitive to test relative to total cash available for marketing. If it doesn’t work out (which is likely), you won’t have any breathing room to test other strategies. Influencer campaigns work best when they are ongoing and most new ventures can not justify the hit to on cash reserves for ongoing influencer campaigns (if they are capable of affording them at all). The only path that makes sense is equity for a long-term / quasi evergreen commitment, which requires a perfect fit and long negotiations. It’s feasible, but it’s a big commitment to make. One off posts for cash considerations are not worth considering at all for start-ups and new ventures.

On the other hand, with nano-influencers you’ll encounter a different issues. Outbound links on Instagram stories requires 10,000 followers (to get a swipe up option). Relative to the major influencer route, a collection of nano / micro-influencers makes a lot more sense to try out. One of the big reasons is that there exists a possibility you can run the campaign on an ongoing basis if an early experiment works out. My perspective on nano-influencers is that it is worth testing but do not assume it work out. Always compare performance relative to other campaigns. If success for other campaigns is a subscription, install, sign-up - then it should be the same for the nano-influencer. Do not accept like vanity metrics reach or engagement here - if you don’t accept them elsewhere.