Marketing alone doesn’t grow your ROI. Only the right type of marketing, combined with a focused goal, has the power to impact your revenue and connect your brand with the right audiences. Lately, there’s an epic head-to-head battle going on between influencer marketing and pay per click marketing to decide which should be the preferred choice for brands.
Influencer marketing is still a new concept for many businesses to wrap their head around, while PPC has been around for more than a decade. Let’s jump in on a short history of both.
The History of PPC & Influencer Marketing
Let’s start with PPC marketing as it has been around for a long time. It started in the 90s when Planet Oasis created the first version of pay per click advertising and Yahoo created the first ad-supported website. Yahoo was the king back then, acquiring GoTo.com and other platforms that entered the PPC marketing arena.
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But the earlier companies that offered PPC advertising lacked sophisticated algorithms, which kept the door open for link, keyword, and index spam. Google came to the rescue by introducing Adwords in 2000, enabling advertisers to create PPC ads that received preference in SERPS.
The early PPC model was bid-based, but when social networks like Facebook, LinkedIn, etc. introduced their own PPC ads, the veterans started to account for the ad’s effectiveness
(to provide an incentive to advertisers to keep using their network). That’s how features like Quality Score came into being.
Today, almost all social networks and search engine companies offer PPC ads.
Coming over to influencer marketing, the concept goes back to 1940 when Lazerfeld & Katz published a study titled “The People’s Choice”. It focused on political communication, and emphasized that opinion leaders and secondhand information had an influence on a majority of individuals. And the notion that high profile opinion leaders have an influence on people is evident throughout historic times, as early as Biblical times.
But the concept of “influencers” has evolved over time. Today, the majority of influencer marketing campaigns don’t feature high-profile opinion leaders or celebrities. That’s because not many businesses have the financial resources to make these people the face of their brand.
Instead, companies now prefer to work with long-tail influencers: common people with a personality and expertise tied to their passions. Companies that work with these influencers rate their relevance and personality higher than their popularity. Therefore, don’t be surprised if you see average folks representing mega companies like Disney and L’Oréal.
Influencer Marketing Has an Edge over PPC
While both influencer marketing and pay per click marketing have unique features and bring you leads and website traffic, influencer marketing campaigns often bring better results than PPC campaigns. Here are 4 reasons why:
1. Influencer Marketing Isn’t Ignored
In the last couple of years or so, people have become skeptical of PPC ads and have started ignoring them. A survey by Goo Technologies (Harris Interactive conducted it) looked at the type of ads consumers say they are likely to ignore the most.
The findings revealed that 82% respondents will ignore online ads. TV ads, radio ads, and newspaper ads are far behind at 37%, 36% and 35% respectively. Looking at the details of online ads, the survey found that banner ads are ignored by 73% respondents, social media ads are ignored by 62% respondents, and search engine ads are ignored by 59% respondents.
In contrast, people welcome recommendations made by influencers. Nielsen Global Trust in Advertising Survey revealed that word of mouth tops any other form of advertisement.
Also, Collective Bias reported that consumers view content that’s recommended by influencers for 2 minutes, 8 seconds on average, which is 7 times longer than the average time (19.2 seconds) they spend watching digital display ads.
2. Influencer Marketing Has A Great ROI
ROI (return on investment) is a crucial factor in any marketing campaign, or any kind of campaign for that matter. It determines how much profit a business will make from how much money it invests (spends).
WordStream reported that companies on average make $2 on every $1 they spend on Google Adwords. PPC advertisers see a high bounce rate because people simply ignore ads, and in some campaigns they face obstacles (such as navigation issues during an eCommerce checkout process).
Econsultancy and Comscore’s study found that over 50% of digital ads are never seen by audiences, making them a colossal waste. Marketers and brands need to make ads viewable to achieve a better ROI. While the general interest in online ads is declining, following PPC campaign best practices may yield better results.
Now compare influencer marketing’s ROI with PPC’s ROI. According to a poll from Tomoson, influencer marketing campaigns generate businesses $6.50 in revenue on $1 spent.
Also, influencer marketing is the fastest growing digital marketing channel, with a growth rate that’s way ahead of PPC, affiliate marketing, and other strategies.
Moreover, marketers say influencer marketing is the most effective when it comes to customer acquisition. Email comes in second. Display advertising was also purported as cost effective, but it is far behind, coming in the 5th spot after influencer campaigns, email marketing, organic search and paid search.
Several brands think that influencer marketing attracts higher quality customers who stick with them over the long term, which is perhaps why it delivers a great ROI. And customers stay loyal to brands suggested by influencers because they tend to be more affluent with suggestions from people they know or highly relate to.
3. Influencer Campaigns Are Far More Creative
One of the reasons why PPC campaigns are getting fatigued is lack of creativity. Companies that rely on the pay per click model are so focused on things like bidding and targeting that they’ve forgotten one of the most important aspects of a successful marketing campaign: crafting a message that resonates with consumers.
Also, companies with a small budget don’t think of creative ideas when devising their PPC campaigns. It’s common to see them replicating the existing PPC ads out there (they think they won’t get clicks otherwise). However, the ads look like they’re machine-generated.
And in general, with a limited character count and less room for design, there isn’t much advertisers can do to make their ad creative. Take a look at these ads, they don’t really pack any other punch than being salesy.
On the other hand, creativity is at the heart of influencer marketing campaigns. Businesses of all sizes can co-create campaigns with influencers, which enables them to piggy back on the influencer’s creativity and add a touch of personalization (because they know what message will resonate best with their audience).
Therefore, influencer marketing enables brands to adopt a humble approach towards creating campaigns, recognizing that niche-specific influencers have their own special expertise, and that they’re not only able to have a positive impact on the experiences they deliver, but sway the opinions of real people in the real world, in an authentic and genuine way.
Talking about creativity, just see how long-tail influencers promote the brands they partner with on Instagram:
This is Simona Pastore, a lifestyle blogger with around 3000 Instagram followers. She collaborates with travel, lifestyle and fashion brands on subtle yet elegant campaigns.
In the image, she’s showing off an outfit from a designer. She has even tagged the brand she’s representing in the photo. It can’t get any creative than this, showing the chic possibility of pairing less expensive outfits with expensive accessories. How would one be so creative with a PPC campaign? Food for thought.
4. Influencer Marketing Is More Effective On Social Media
There’s a reason why you’re not getting your desired results with Facebook ads and other social media PPC campaigns – consumers’ trust in social media PPC ads is on the decline. These ads are facing the same fate as PPC ads on search engines.
Also, the fast-growing millennial generation trust real friends and real people, not direct advertising or social media advertising by brands. According to a Student Monitor survey, 48% students preferred to receive details about products/services from the trusted word-of-mouth. 39% voted in favor of ads on the internet.
That means social media advertising is effective, but not as effective as word of mouth recommendations, which is the strength of influencer marketing campaigns on social media platforms. In the survey, 34.1% respondents said that “friends’ recommendations via social media” had a lot of influence on their purchase decisions.
Moreover, pay per click social media campaigns can be expensive in the sense that you’re paying to reach people who’re already in your network (the concept of boosted post). Also, in general, there is a chance that you’ll attract people who have no interest in your offerings.
On the contrary, the rise of social media influencers suggests that people listen to these subject-matter experts on Facebook, Twitter, etc. A report also revealed that customers acquired through the efforts of social media influencers have a 37% higher retention rate. Therefore, social media influencers offer companies a chance to connect with an audience of a particular niche at a low cost.
As a result, brands can reap more benefits by partnering with influencers for social media campaigns as opposed to using the PPC ads offered by social media companies. And in this way, you can retain greater control over your campaigns (you’re not bound by character limits, or things like ad placements; you have unprecedented freedom to be creative).
Search influencer marketing on Google Trends and you’ll see that interest in it has been on the rise since 2012. But this shouldn’t surprise you. We’re all awash in peer recommendations. Still, many businesses don’t have a documented strategy for creating influencer campaigns.
What you need to do is weigh the pros and cons of each digital marketing campaign you invest in. As evident from the findings above, PPC has its benefits, but it is not as effective as influencer marketing in many aspects.
So, avoid throwing a good chunk of money down the drain, and take smarter decisions when it comes to choosing a marketing strategy for your business.
Fabrizio is CEO and Co-Founder at Buzzoole. Serial startupper since 2007, he founded Fan Media in 2008. In 2010, among the first in Italy to deal with Buzz Marketing. Get in touch with him at @fabrlzio