What are the risks of influencer marketing for E-Commerce?

I have always believed that not every popular influencer is going to generate the right result for your brand because they have different values and audience. You need to understand what you want to achieve and if the target audience of the influencer would be interested in your product.

It's important to be careful who you select as an influencer because their branding should match up with yours. As an example, you would want to avoid someone who promotes hate speech on their social media because once customers tie you to that influencer, this could me irreparable damage long term. The key is to filter your picks and be OK with saying NO to an influencer with a large following. Be brand focused!

When a brand work with Influencers, they should choose an influencer wisely, they should look at cost, audience relevance, markets etc. But, other important thing is a clear way of measuring goals and changing execution plan accordingly otherwise you end losing big chunk of money no results. Now, measuring results can be tricky in case of influencers marketing so thats the risk which should be avoided.

Brand safety and suitability should be a top priority when choosing to partner with influencers. Make sure you do thorough background checks on the influencer, you understand the content genre, but also the context of any point of view, language, used by the influencer when creating content. After signing an engagement, regularly monitor their content and online behavior. Have clauses in contracts to address behavior.

Influencer marketing can be effective for E-commerce businesses, but be cautious of the risks. focused experiences, challenges, and benefits.

If you don't establish the proper guidelines and steps for approval ahead of posting online, among other things, once content is handed over to influencers, brands can have limited control over how it's presented. There's a risk of miscommunication or misrepresentation of the product or brand.

In my experience, sometimes the e-commerce businesses have limited control over an influencer's content once it's published. You can provide guidelines, but there's no guarantee that the influencer will follow them precisely, potentially leading to off-brand content.

Maintaining control over your brand message in influencer marketing is essential. Collaborate closely with influencers, aligning expectations and guidelines to ensure your message stays true to your brand values and goals. Clear communication and mutual understanding can help you safeguard your message while leveraging influencer reach.

Clearly communicate branding guidelines, campaign goals and requirements. Establish processes for approving content and assets before publishing. Monitor influencer activations in real-time to flag issues. Maintain open communication channels for feedback.

Product Returns A topic which is not widely discussed is product returns. Though there is not available data to understand the percentage of returns during a KOL campaign particularly through live commerce, this number can be as high as 40% mostly due to impulsive buying behavior during such activity. Before engaging in any influencer marketing campaign, brands should enquire past campaign ROIs and overall return rates.

By far one of the biggest things I’ve seen with influencer marketing, that people should look out for when hiring influencers is reputation management, and how that influencer correlates to not only the brand, but what it is that they actually stand for within their content. Just because they get a lot of eyeballs doesn’t mean that it’s going to help your brand.

Calculating ROI Brands often think it is challenging to measure the efficacy of influencer marketing campaigns. Recent report presented published by Storyclash shows that roughly speaking, brands make $5.20 for every $1 spent on influencer marketing. To further facilitate the calculation brands can use the following formula: (Revenue/Cost) x 100. It is also important to highlight the high return rates: since consumers may purchase products impulsively during a live commerce with an influencer, the return rate can reach up to 40%. So brands also need to consider these factors when starting their influencer marketing campaigns.

First, respond professionally to the negative feedback . Also reach out to the influencer directly to get their candid opinion on the issues raised. Next, apologize for their poor experience and offer to make it right by providing refunds, credits, or free products. Turn critics into brand advocates by delivering excellent customer service. Analyze the complaints to identify if certain products or processes need improvement. Develop an action plan to address these systemic issues, like enhancing quality control. Position the response as an opportunity to improve. Keep the influencer and their community updated as you roll out changes. Seek their input to continue optimizing. Their insight can really amplify your refinement efforts.

Influencer marketing indeed presents its own unique set of challenges. Beyond just follower counts, a successful campaign hinges on synergy between the brand's values and the influencer's persona. The coordination, from content creation to evaluation, is akin to orchestrating a dynamic dance that resonates with the audience. Investing in robust tools to measure impact is crucial. It's not just about visibility but creating genuine connections. Strategy, patience, and adaptability are key.

Some influencers may use fake followers or engage in fraudulent activities to inflate their reach and engagement metrics. This can result in your brand paying for an audience that doesn't genuinely exist. Additionally, measuring the return on investment (ROI) of influencer marketing can be challenging. It's not always easy to attribute sales directly to influencer campaigns, making it difficult to determine their effectiveness.

Influencers are more sophisticated than ever and understand their market value. Utilizing their content for paid ads can be expensive unless content usage rights are granted for perpetuity. Most brands that partner with influencers have a limited usage time for content which significantly reduces the ROI, compared to owned content that can be active as long as it’s performing.

Let's not forget it can happen the other way around. Such as in the case of FTX where multiple influencers with millions of followers were advocating onboarding on FTX which ultimately turned out to be nothing but a Ponzi scheme.

Perhaps one of the risks is collateral damage. When an influencer or a celebrity is associated with a certain brand, negative publicity of the former affects the latter's business. Remember the Tiger Woods controversy which tarnished Accenture's image as it had featured the former in 83% of its advertisements. Although we cannot predict public sentiments, it is always essential to not keep all the eggs in one basket.

In my experience as a digital marketer, I worked with various clients and influencers. I have seen scenarios which yielded great results and some that didn't. If a influencer does it soley for financial gain, it won't work. Unless the influencer is truly resonant to your brand values, it raises concerns among the audience. Also its easy to see a temporary increase in website traffic and some sales, but such marketing might not lead to long-term customer retention. A lack of sincerity can backfire and damage a brand's reputation so it's important to find the right influencers to promote the brand.