The Marketing Value of Influencers

Ed KellerEd KellerCEOKeller Fay Group

Gregg LiebmanGregg LiebmanSenior Vice PresidentCNN

The Marketing Value of InfluencersThe Marketing Value of Influencers

My role at CNN is to find research that advertisers find credible that enables us to both attract new ad dollars as well as charge a premium for the network's valuable audience

*Source: Roper Influentials

CNN & Influencer Marketing

2001 2002 2003 2004 2005 2006 2007

$76M$179M

$313M$407M

$722M

$981M

$1.35 Billion!Why Influencer Marketing:Why Influencer Marketing:• Word of mouth is the most effective communication in driving a purchase• Heightened interest in WOM marketing• Advertisers are looking to do more with less

• Influencers are market multipliers• Influencers are information seekers and thus

heavy news viewers*• Influencers are early adopters of new

technologies*• CNN.com/video; CNN podcasts;

CNN MobilePositioning that works across all CNN platforms

Growth in spending on word of mouth marketingGrowth in spending on word of mouth marketing

INFLUENTIALS ARE MORE LIKELY TO FIND NEWS IMPORTANT TO FOLLOW

51%

7% 5%

76%

24%

0% 0%

36%

General Population Influentials

Very Important

Somewhat Important

Not too Important

Not at all Important

How important is it to you personally to follow the news?

SOURCE: CNN & INFLUENTIALS ATTITUDE STUDY, ROPER ASW, DECEMBER 2008 – BASED ON ADULTS 25-54

INFLUENTIALS ARE MORE LIKELY TO CURRENTLY WATCH CNN FOR NEWS AND INFORMATION

50%

36%

50%

39%

56%

47%

59%

37%

20%14%

63%

50%47%

61% 60%54%

45%

58%

42%

15%18%

39%


Which of the following television news sources do you currently watch for news and information?


51%

5% 5% 5%9%

70%

30%

8% 7% 9% 11%

19%


On TV in your home

On TV in an airport

On websites

E-mail alert

During the past month, have you gotten CNN/HLN news from any of the following places?

On a portable device

INFLUENTIALS MAKE 360 CONNECTION TO THE CNN BRANDINFLUENTIALS REACH ACROSS CNN PLATFORMS

Someplace Else


• CNN and Keller Fay have teamed up to take influencer research to a more granular level• We are linking audiences to word of mouth, and influencers to

brands• Our focus is to demonstrate the marketing value of influencers,

and the important role that advertising plays in stimulating their word of mouth advocacy

• In particular, we focus on these three areas:•Reach effect of influencers•Acceleration effect of influencers•Stimulative effect of advertising re word of mouth advocacy

Purpose

• Published in 1955 by prominent academics from Columbia Univ.

• Documented the pivotal role played by “other people” (i.e., personal influence, a.k.a. word of mouth) in consumer and political decision making

• First to observe “there were people who exerted a disproportionately greater influence” over others – “opinion leaders” (a.k.a. influentials)

“In the Beginning”

“I think that word of mouth is something created by three very rare and special psychological types, whom I call Connectors, Mavens, and Salesmen.”

Fast Forward: February 2000

“When Americans make decisions today, it’s a conversation. Marketers need to reach the people starting those conversations.”

January 2003

• Published in 2005• “When we started BzzAgent, we

believed in the myth of the influentials.”

• “It took nearly a year of campaigns . . . for us to understand that mavens and high profile influentials are effective in specific ways and in particular categories, but most of the time, everyday people are better.”

Ch 5: “The Myth of the Influentials”

For Every Action, There is an Equal and Opposite Reaction

“The Myth of the Influentials”

#1: The Accidental InfluentialsDuncan J. Watts

In his best seller, “The Tipping Point,” Malcolm Gladwell argues that “social epidemics” are driven in large part by the actions of a tiny minority of special individuals. The idea seems intuitively right—we think we see it happening all the time. Nevertheless, this isn’t actually how ideas spread. It’s better to focus on getting enough plain, ordinary people to sign on.

The HBR List: Breakthrough Ideas for 2007

February 2007

For Every Action, There is an Equal and Opposite Reaction

“The Accidential Influentials”

Can These Competing Views be Reconciled?

What is the Value of Influencers to Marketers?

What’s a Marketer to Think (and Do?)

Category Who they areWhat they are called (Partial list)

Formal position of authorityPolitical/government leaders/staffBusiness leaders

Opinion leadersDecision makersC-suite

Institutional/recognized subject matter experts & advocates

Academics/scientistsIndustry analystsNGO leadersConsumer activists

ExpertsMavensAnalystsCritics

Media eliteJournalistsCommentatorsTalk show hosts

Talking headsColumnistsPoliticos

Cultural elite

CelebritiesDesignersArtistsMusicians

TrendsettersFashionistasTaste makersCreatorsStarters

Socially connected

Neighborhood leadersMembers of community groupsOnline networkersBusiness networkers

MavensStartersConnectorsSoccer momsSpreadersHubsAlphas

Source: WOMMA Influencer Handbook, 2008

In Part, It’s a Matter of Definition

• Reach Effect• Marketing via influencers creates efficiency and effectiveness

• Acceleration Effect• Profit impact of influencer marketing is substantial when looked at

from a Customer Lifetime Value (CLV) perspective

But it’s More than Definition; New Evidence (Re)confirms the Value of Influencers

• ~10% of population, influencers account for 1/4 of all WOM

• ~1b WOM-based brand impressions daily!

• 80% more conversations each day than average

• 130% more brand conversation• Category-specific influencers talk

about brands at up to 5x the norm

The “Reach Effect” of Influencers

16

*Source: Keller Fay’s TalkTrack®, 2008

+81%+130%

Influencers: Engaged in Far More Conversation(Average # weekly conversations and brand mentions*)

17

18

18

19

20

22

22

24

24

24

27

29

29

30

31

43

33

40

42

39

47

44

53

49

47

50

53

60

61

61

80

Children's products

The Home

Telecom

Financial products & services

Travel services

Household products

Sports/Recreation & hobbies

Personal care & beauty

Automotive

Health & healthcare

Technology

Shopping/Apparel

Beverages

Media & entertainment

Food & dining

Conversation Catalysts™

Total Public

%%

* Source: Keller Fay’s TalkTrack®, 2008

Influencers Give 2x as Much Advice(Percent giving advice about category on a regular basis*)

The scores for total public were set to 100, and scores for Conversation Catalysts™ andAutomotive Catalysts™ were indexed against the total.

100

100

100

100

100

100

100

100

100

100

100

100

255

198

207

199

229

238

234

228

260

392

361

260

372

285

320

321

336

337

345

347

360

456

461

523

Average Index

Dodge

Ford

Chevrolet

Lexus

Chrysler

Toyota

Honda

Mercedes Benz

Mini Cooper

Hummer

BMW

Automotive Catalysts™


Total

In Autos, Category Influencers Give Up to 5x as Much Advice(Conversation about auto brands in 2008: Catalysts v. Total Public)


100

100

100

100

100

100

100

252

227

213

268

266

296

365

599

506

602

657

721

759

838

Average Index

Merrill Lynch

Vanguard

FidelityInvestments

TD Ameritrade

Etrade

CharlesSchwab

Financial Catalysts™


Total

The scores for total public were set to 100, and scores for Conversation Catalysts™ and Financial Catalysts™ were indexed against the total.

In Financial Services, Category Influencers Give Up to 8x as Much Advice(Conversation about investment brands in 2008: Catalysts v. Total Public)


272

162

140

377

180

148

Coke Zero

Diet Coke

Coca-Cola

Beverage Catalysts™


The scores for total public were set to 100, and scores for Conversation Catalysts™ and Beverage Catalysts™ were indexed against the total.

In Beverages, Category Influencers Give Up to 4x as Much Advice for New Products(Conversation about beverage brands: Catalysts v. Total Public)


New academic research* illustrates• “Social hubs adopt sooner than other people not because they are

innovative but rather because they are exposed earlier to an innovation due to their multiple social links.”

• “Adoption by hubs speeds up the growth process and directly influences eventual market size.”

• “If social hubs can be identified . . ., they could be an efficient target for word of mouth campaigns, leading to both faster growth and increased market size.”

• “The value of a customer to the firm is more than the sum of their purchases, it also includes the effect that some individuals, i.e. hubs, have on others. Such “influentials” have substantially higher value than previously realized.”

*The Role of Hubs in the Adoption Processes. Jacob Goldenberg, Sangman Han, Donald R. Lehmann and Jae Weon Hong. July 17, 2008

The “Acceleration Effect” of Influencers

Additional academic research* further documents the profit impact of influencer word of mouth

• WOM “seeding” for new products accelerates the purchase process• Especially true for influencer-based programs

• Faster adoption = greater profits• Based on analysis of customer’s lifetime value (CLV)

* The Social Value of Opinion Leaders. Barak Libai, Eitan Muller and Renana Peres. October 2008

0%

10%

20%

30%

40%

50%

0% 2% 4% 6% 8%

proportion of seeding

% im

pro

vm

en

t o

ver

no

seed

ing

Improvement random seeding Improvement influential seeding

The “Acceleration Effect” of Influencers

Catalysts 2 months ahead of peak in total public

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

7.00%

8.00%

9.00%

JUL

2 06

JUL

9 06

JUL

16 0

6

JUL

23 0

6

JUL

30 0

6

AUG 6 0

6

AUG 13

06

AUG 20

06

AUG 27

06

SEPT 3

06

SEPT 10

06

SEPT 17

06

SEPT 24

06

OCT 1

06

OCT 8

06

OCT 15

06

OCT 22

06

OCT 29

06

NOV 5 0

6

NOV 12

06

NOV 19

06

NOV 26

06

DEC 3 0

6

DEC 10

06

DEC 17

06

DEC 24

06

DEC 31

06

Conversation Catalysts™ Total Public

Influencers Accelerated WOM for Wii Launch(% of consumers mentioning Nintendo, 4-week rolling average)


TechnologyComfortable

Media Mavens Attuned to Relevant

Advertising

Reaching Influencers

Influencers Draw on Advertising to Influencers Draw on Advertising to Fuel Content in WOM ConversationsFuel Content in WOM ConversationsInfluencers Draw on Advertising to Influencers Draw on Advertising to Fuel Content in WOM ConversationsFuel Content in WOM Conversations

54% of influencer’s brand conversations

include references to marketing or medialed by. . .

Advertising (26%)Programming/editorial (14%)

Point of sale (10%)Promotions (8%)

Websites (8%)Direct mail (5%)

Marketing and media are important drivers of WOM Source: Keller Fay’s TalkTrack®, 2008

• Word of mouth is a powerful and growing force in the consumer marketplace

• Influencers sit “at the center of the conversation”• An important constituency in generating consumer conversation

to drive brand growth• They are neither “mythical” nor “accidental”

• Influencers generate reach, making WOM marketing more efficient, effective

•Between 2x and 5x

• Influencers accelerate product adoption, improving profitability• Influencers amplify advertising messages via word of mouth

• And ad-influenced WOM increases brand advocacy

Conclusions

• Powerful new tool that enables us to demonstrate to advertisers the value of the CNN viewer and cross-platform user

CNN & Keller Fay Group

Thank You!

[email protected]@turner.com

The Marketing Value of Influencers

Business

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