Tailify: leading the influencer revolution
A year ago I was debating the influencer economy with a very prominent and successful CRM guru. “I can’t abide influencers”, he announced. “They are the devil’s spawn.” Influencer Marketing produces very polarised reactions. To one third of the marketing world, it is a backwater of ‘taxis-for-hire’, plugging any product that will pay them in cash or product - a sort of grisly Truman Show made real. To the next third, it is a new frontier where followers accept valid recommendations from people they know and trust and a ‘democratisation of marketing’. And to the final third, it is just another small product placement channel: $8bn spend out of a global spend of $550bn.
When we helped Tailify relocate from Denmark & Sweden to London, raise finance and promote their sophisticated influencer marketing platform, the message was simple. Instagram and YouTube (principally) are huge social platforms with billions of content creators. And people tend to respond more readily to recommendations from people they know and trust, or at least like. The media buying world has been slow to adopt influencer marketing. It has been a ‘nice to have’ in most campaigns, ticking the social media box. The bulk of budget has continued to go into brand advertising (TV and digital) and PPC.
One of the reasons for the initially slow adoption rate by professionals was that most early influencer campaigns did not achieve a positive ROI. This was primarily due to poor matching of influencer (and their followers) to brand. Campaigns can choose from up to 100 million influencers, so the data crunching to get a successful match is prodigious. But things are changing. Specialists like Tailify have built large AI capabilities to crunch influencer data. And the advertising alternatives have seen cost per impression (cpm) and cost per acquisition (cpa) rise steadily. As a result of improved performance, agencies like Tailify are seeing rapid growth – CAGR in revenues has been running at +100% between 2017-2020 and may increase as Tailify grow the capability to implement budgets at scale. Brands want to deploy £100,000s of budget as part of a multi-channel campaign, not the £30,000 size campaigns of three years ago.
The biggest conundrum for the influencer marketing community is the central premise that conversion rates are best when a friend recommends a product to a friend, rather than Kim Kardashian to a fan. But doing micro-influencers at scale is logistically onerous. So the solution is to manipulate data at scale and develop streamlined systems and processes for content distribution/creation by the influencer community. Platforms like Tailify are achieving this via investment in R&D.
The conclusion is that Influencer Marketing is set to grow at above average rates over the next few years as it moves towards automation, resulting in a select group of large experts that can integrate effectively into major brand programmes.