Former Masterchef contestant Renae Smith gets messages daily from social media influencers offering to post about one of her food products in exchange for hundreds of dollars.
She is warning businesses against taking a transactional approach, with one marketing expert revealing that those struggling to make sales due to COVID-19 are increasingly jumping on the influencer bandwagon.
Ms Smith, who made the top eight in Masterchef season 6, said she has had influencers charge $250 to create a single Instagram post about one of her bake mixes where the profit margin is just $4 per sale.
She said the chance of her making that money back with 62 sales, let alone a profit on her investment, is “super slim” – even if the influencer has thousands of followers.
The coronavirus pandemic has escalated the trend towards native marketing, where brands that are under pressure to boost sales are turning to influencers, said Paul Harrigan, associate professor of marketing at the University of Western Australia.
Many marketers desperate to showcase their products to a large audience they cannot attract on their own are being driven by short-term demands for profit, and therefore resort to paying or incentivising the more superficial influencer, Dr Harrigan said.
“The proper use of influencers is one of the most powerful ways to undertake marketing. Proper means authentic, with no or few shortcuts,” Dr Harrigan said.
“Unfortunately, under-pressure marketers often just offer compensation in return for promotion, which is a short-term approach.”
The results can be terrible.
Ms Smith also owns PR agency, The Atticism, which is contacted every week by at least one client who, for example, paid an influencer $1000 for a post with their product and got 100 new followers but no sales.
“When I investigate this, they say ‘the influencer has over 100k followers and gets good engagement so we thought we would make more sales’,” Ms Smith said.
Businesses are making an “expensive mistake” if they think people will suddenly start buying their product because someone with lots of followers was photographed with it, she said.
“Generally, if an influencer costs you $2000 to post about your product, plus you send the free product, say valued at $500, then you need to understand if you really think you’re going to get over $2500 of sales out of that to cover the cost. If not, then what’s the point?”
However, the potential for genuine micro-influencers, who are truly passionate about a brand or an interest, has increased due to COVID-19, simply because more brands are looking to influencer marketing, Dr Harrigan said.
That is what he calls “doing it properly”, as the motivation to ‘influence’ is not solely based on compensation from the brand.
Behind wanting to work in fashion and beauty, Paige Cantone, an up-and-coming Melbourne-based influencer with more than 13,000 followers, said she aspires to be someone who others can look up to.
“When I was at school I found it hard. People I followed and looked up to on social media in a way empowered me to want to give people like myself someone they can relate to or even look up to,” Ms Cantone, 19, said.
Abby Kheir, the founder of designer clothing brand Abyss, looks out for a similar kind of authenticity when choosing which influencers to dress.
“I think the majority of customers or Instagram people know girls are getting paid. Now to make something look authentic … I do look for things like the Instagram story to see if this is what they actually wear.”
Coronavirus restrictions have to some extent levelled the playing field for influencers wanting to increase their followers, as there is less for some people to compare themselves with and in effect, compete against, said Lucas Cook, the founder of Co Media.
“What is there to compare to apart from the look? Before it was the backdrop, the lifestyle, the holiday, the international trip,” Mr Cook, who helps businesses and influencers connect, said.
With COVID-19 causing more brands to turn to influencers for marketing opportunities, there’s more chance of profiles getting noticed.
“Depending on your niche or where they are situated in the global market, there has been a surge in demand for digital marketing practices and influencer marketing opportunity,” said Crystal Abidin, a senior research fellow of internet studies at Curtin University.
“They’re masters at being able to conceal somethings, highlight others and their skills I think, are for the very first time on such a large scale being acknowledged as very critical to the workplace,” Dr Abidin said.
That’s particularly important because wannabe influencers are doing themselves a disservice if they reach out to brands, said Joanna Hill, a Gold Coast-based fashion influencer with 266,000 followers.
“It does happen often, and more often now than it did before years ago,” Ms Hill said.
They risk being seen as someone who is “desperately trying to reach out to and get money from every company possible”, she said.
“People will be attracted to your profile, and then they’ll say, you know what, I like that girl’s profile. I would love to advertise on this.
“It’s more authentic.”