FINANCE
Partnerships – there are some that work, and there are some that do not. Yet, like all partnerships, it takes a while to figure out exactly where you stand.
While relationships between influencers and brands have long been a thing, it’s the digital age which has posed a new challenge; freedom. Freedom for people to say what they like with an infinite reach, posing the questions as to whether brand partnerships are the match made in heaven that they once were.
When you scratch the surface, influencer marketing works. It provides 11 times the ROI when compared to traditional digital marketing, and 83 per cent of consumers say they trust peer recommendations over advertising. Importantly, influencers have a niche, engaged following which brands are often unable to target without investing into an influencer campaign.
A new form of advertisement
Influencer marketing has risen to prominence as consumers become savvier to traditional advertisements and switch off. Audiences simply do not want to be bombarded with messages day in day out, and it’s estimated that 11 per cent of the global internet population use some form of ad blocking software, with 615 million devices registered as running ad blockers.
As consumers switch off from ads, marketers have changed their approach too – using influencers to target audiences with a subtler approach.
Audiences may skip an ad on YouTube, for example, but if an influencer is then talking about a product in a sponsored video, it reaches consumers in a more natural advertisement form.
Advertisements often have negative connotations to them and are associated with mistrust and the notion that brands are just trying to sell a product. While influencer marketing is also used as a sales tool, it has a more trustworthy element to it.
Building a brand, trust and engagement
Relationships are built on trust, and for consumers to buy into a brand trust needs to be the foundations on which the partnership is formed.
Traditional media is deemed as a less trustworthy source by consumers, yet the same product could be included in an advertisement and an influencer, and it’s highly likely that a consumer will trust this source more. Essentially, influencers are the bridge between taking a brand and turning it into a trusted brand.
Are businesses falling out of love with influencers?
In fact, one study found that 74 per cent trust sources such as blog and online communities more than brand advertisements when it comes to sourcing product information.
Which leads to the question, why? It’s the notion of recommendation and hearing someone share a product or service from somebody who consumers feel is just like them with the same lifestyle, values, and needs.
In the era of fake news, consumers think why would the ‘boy/girl next door’ falsely advertise a product? What benefit does it have to them to lie? Of course, influencers are often paid for their work and ASA requires them to disclose on their channels when they have been paid to talk about a brand or product. However, not all follow this guidance and disclose their ads, and it has led to calls for greater transparency and regulation over influencer campaigns.
There is then the need to balance transparency with disclosure. If the point of an influencer campaign is to target consumers in a non-ad way, then giving it advertisement status could then have reverse effect.
The fear of losing control
Traditional advertising forms can be controlled – brands are able to oversee the whole process and control it from start to finish, yet when it comes to influencer campaigns it’s often only the initial brief which a brand has control over.
It is this balance that brands need to get right – providing freedom to influencers to create content which stays true to their personal brand and is content which their audience will engage with, but also reaches the brand’s goals and desired outcomes.
Influencers know their audience. They know the types of content they like and dislike, whether a blog post, video or social media posts works best depending on the product or service being promoted and have the creative ideas on how to execute campaigns in a unique way. Similarly, companies know their brand. They know the tone of voice it needs to maintain, the goal that needs to be reached and how their brand should be positioned.
Restrict how an influencer creates their content and it’s likely that it won’t engage their audience and look out of the ordinary when compared to non-sponsored content. The beauty of an influencer campaign is that it is intended not to stand out, and designed to look like any other recommendation, sponsored or not.
Unbiased recommendation with fact
Consumers are turned off from hearing about how great a product or brand is, and there is the need for unbiased, informative recommendations – a job for an influencer. There is also the need for fact – something which brands can provide.
It is this balance between recommendation and fact that can make the relationship between influencer and brand work, and the campaign a success.
Influencers should have creative control over how the campaign looks – they know their channels and audiences best – and brands should be able to inform the campaign goal and provide the factual basis of what is required.
How important are influencers to your product or brand?
Brand and influencers – a relationship with trust
Influencer campaigns are still a relatively new marketing strategy, so it’s no wonder that it is a process and partnership that isn’t without its differences. Yet, this relationship is a work in progress and one which should be bound by trust by both parties.
Trust in an influencer that they will execute the campaign according to the set goal and deadlines, and trust from a brand that an influencer will create content which aims to engage their audience and meet the set goals.
For an audience to engage with an influencer campaign, then the content needs to be relevant and of the highest-quality, and for this to happen the initial relationship needs to be strong.
This is a guest blog and may not represent the views of Virgin.com. Please see virgin.com/terms for more details.
Germany’s GDP could stagnate or even decline in the third quarter, Bundesbank has warned
The German economy has been shrinking over the past two years and will remain stagnant for the rest of the year as it continues to grapple with economic malaise, Bloomberg reported on Friday.
According to a survey conducted by the outlet, the EU’s top economy has been stalling in the three months through September, marking a deeper-than-expected decline.
Economists have already started downgrading their forecasts for this year, with some now seeing protracted stagnation or even another downturn.
“While we expect the market to see a mild recovery at the end of 2024 and in 2025, much of it will be cyclical, with downside risks remaining acute,” Martin Belchev, an analyst at FrontierView told Bloomberg.
He warned that the faltering automotive sector will further exacerbate downward pressures on growth as the top four German carmakers have seen double-digit declines.
Thousands of EU automotive jobs at risk – Bloomberg
The country’s central bank said on Thursday in its monthly report that the German economy may already be in recession. According to the Bundesbank, gross domestic product (GDP) “could stagnate or decline slightly again” in the third quarter, after a 0.1% contraction in the second quarter.
Economic sentiment in the country has suffered due to weak industrial activity, Budensbank President Joachim Nagel said on Wednesday.
“Stagnation might be more or less on the cards for full-year 2024 as well if the latest forecasts by economic research institutes are anything to go by,” he said.
German industry is struggling amid weak demand in key export markets, shortages of qualified workers, tighter monetary policy, the protracted fallout from the energy crisis, and growing competition from China, Bloomberg noted.
The Eurozone’s largest economy has been falling behind its peers over the past years, largely due to a prolonged manufacturing downturn. Germany was the only Group of Seven economy to contract in 2023.
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A third of the region’s major car plants are currently operating at half capacity or less, according to a report
European auto makers are facing more plant closures as they struggle to keep up with the electric vehicle (EV) transition amid slowing demand and growing competition, Bloomberg reported on Wednesday.
According to the outlet’s analysis of data from Just Auto, nearly a third of the major passenger-car plants from the five largest manufacturers – BMW, Mercedes-Benz, Stellantis, Renault and VW – were underutilized last year. The auto giants were producing fewer than half the vehicles they have the capacity to make, the figures showed.
Annual sales in Europe are reportedly around 3 million cars below pre-pandemic levels, leaving factories unfilled and putting thousands of jobs at risk.
The report pointed out that sites shutting down would add to concerns that the region is facing a protracted downturn after falling behind key competitors, the US and China.
“More carmakers are fighting for pieces of a smaller pie,” Matthias Schmidt, an independent auto analyst based near Hamburg, told Bloomberg. “Some production plants definitely will have to go,” he warned.
VW announced last week it was considering closing factories in Germany for the first time in its near nine-decade history. The automaker said it was struggling with the transition away from fossil fuels.
BMW has warned that tepid demand in China poses a further threat to sales and profits.
Volkswagen planning major cutbacks in Germany
The threat of factory closures in Europe has worsened in recent years amid skyrocketing energy prices and worker shortages that have driven up labor costs.
“Failure to turn things around would deal a blow to the region’s economy,” Bloomberg wrote, pointing out that the auto industry accounts for over 7% of the EU’s GDP and more than 13 million jobs.
Car-assembly plants often are “anchors of a community,” securing work at countless nearby businesses, from suppliers of engine parts and trucking companies to the local bakery delivering to the staff cafeteria, the report said.
Closing plants is usually “the last resort” in a region where unions and politicians have a strong hold over corporate decision-making, concluded Bloomberg.
There’s “massive consolidation pressure” for auto plants in Europe, Fabian Brandt, an industry expert for consultancy Oliver Wyman, said. “Inefficient factories will be evaluated, and there will be other kinds of plants that shut down,” he claimed.
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