Sunday Series - The Influencer Competitive Advantage ⚡️
Let me begin by saying something incredibly redundant and obvious, but worth repeating—the Coronavirus is challenging and changing every industry in the world.
When it comes to media and marketing, influencers and creators now have structural benefits that put them in a better situation to thrive than traditional celebrities. There are three main reasons behind this:
Cost 💸
Behaviour 📱
Reach 👀
Cost 💸
Production Costs
Many traditional incumbents in Music (Major Three Record Labels), Film (Major Studios), and TV (Major Networks) produce high quality content. That content is also very expensive to produce, requires lots of people, and is hampered by the Covid-19 lockdown.
On the other hand, influencers native to social media have much lower production costs. Take Charli D’Amelio, the world’s biggest TikTok influencer who currently has 63 Million followers and 4.4 Billion likes. Her videos are low production—often it’s literally just her recording videos from her phone in her own room. As this Guardian article says about Charli and her sister Dixie, “[they] had become lucrative stars, in a matter of weeks and without leaving their bedrooms.”
Even as people get back to work, social media influencers have been aggressively brand building and thriving in the time of coronavirus because of their low production costs. That means they don’t have to slow down because of the coronavirus.
Another cost that is harder to quantify is switching costs, a term I’m borrowing from the field of economics. Switching costs in economics refers to the costs or hassle (perceived or real) required to make a change.
For example, changing your phone plan, bank, or insurance provider is usually so annoying that one of the reasons you don’t switch is because the cost of switching is really high. Even if another bank offers you a clearly better service, the perceived hassle, paperwork, and bureaucracy to switch banks might discourage you from changing.
How does that apply to influencers?
You can’t teach an old dog new tricks. Or at least, it’s really hard to do. The entertainment, marketing, and advertising industries are all populated with experienced decision makers who have less incentive to ‘switch’ their mindsets from traditional media to digital media.
To truly immerse yourself in the art of creating mobile-first, snackable content takes time and effort. I have worked with many senior marketing executives around the world and most of them are very intelligent, well-intentioned, and hard working individuals. However, the world of digital marketing is objectively 10x more complex than the world of marketing in the 1990s.
Check out the infamous Lumascape, an overview of what mobile advertising means today and the key players involved:
If you are the CMO of Unilever and plan to retire in the next two years after spending forty gruelling years building up your reputation and competence, there’s less upside and more downside for you to do something truly radical and risky.
And that applies for something that takes you out of your comfort zone in terms of marketing, like getting your Fortune 500 company to start running TikTok Ads.
Behaviour 📱
If you’re reading this, you are already aware of the increase in time spent on digital media vs. traditional media.
The next four slides from Mary Meeker’s 2019 Internet Trends report showcase these trends at a high-level.
Basically, you should increase your chances for success by jumping on a currently existing wave, rather than trying to stop the wave or creating your own wave.
Each day we see more and more data on the double and triple digit growth in time spent on apps like TikTok, YouTube, and Snapchat.
These platforms favour the native social media influencers who are used to the platform more than traditional celebrities, because some behaviour is also unique to social media.
Last week, Youtube announced that since March 2020, 2 million people on YouTube have supported creators through purchasing their very first Super Chat, Super Sticker, or Channel Membership, all of which YouTube calls "alternative monetisation." Since January, YouTube has seen a 40% total increase in revenue from these products.
All of this “alternative monetisation” is unique to digital platforms and different from the traditional media business model of advertising. Consumers are increasingly open to virtual tipping or buying digital merchandise.
Can major entertainment brands meet that new behaviour and shift their focus away from advertising?
I’m sure they can, but influencers and content creators can do it even better.
Reach 👀
It doesn’t happen overnight, but money does eventually follow eyeballs.
And we often underestimate the eyeball reach of social media influencers. This article compares Food Network Star Giada Delaurentis having 5 million views of her content over the last month, while TikTok Chef Nicole Renard had 40 million views in the same time period.
The contentious point here is that we are not comparing apples to oranges. Comparing a view of a 12 second TikTok video is very different to a 30-second ad in the middle of Big Bang Theory.
But one of the problems with the advertising industry is that there is no objective universal metric that you can ever really apply across media. Regardless, in the constant quest for giving your business an edge in marketing, you should look to influencers and creators because they have modern appeal.
David Dobrik is one of the world’s biggest influencers, with 17 Million Youtube Subscribers, 18 Million TikTok Followers, and last year he hosted the Teen Choice Awards.
Jeffree Star is one of the world’s biggest beauty influencers with 18 Million Youtube subscribers, 16 Million Instagram followers, and a cosmetic line that literally crashed Shopify when it launched last year.
Joe Rogan is one of the world’s biggest influencers, with 190 Million podcast downloads a month, 2 Billion views on Youtube, and was rumoured to have received around $100 Million from Spotify for an exclusive licensing deal.
For people like David Dobrik, Jeffree Star, and Joe Rogan, their appeal to fans is likely at the same levels of any major athlete, singer, or actor. But since their careers didn’t emerge from mainstream media platforms like Music, TV, or Film, they are likely underpriced considering their levels of reach.
But that’s only true for now. Because of the coronavirus, the structural benefits of Dobrik, Star, and Rogan become competitive advantages of Cost 💸, Behaviour 📱, and Reach 👀.
In the brave new world of media, marketing, and advertising in a Covid world, the future belongs to these creators, influencers, and trailblazers whose home is social media. ⚡️
I’m always looking to meet and work with like-minded people from around the world. You can find me on Twitter and Linkedin — come say hi!