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Are brands getting bang for their buck from sponsored posts by influencers?

Not if it’s a single post.

As the influencer set is besieged with offers and deals to work with some of the biggest fashion, beauty, lifestyle, hotel, airline and automobile brands in the world, it’s still trying to navigate a space that didn’t exist before Oct. 6, 2010, the day Instagram was born. (Instagram didn’t gain widespread appeal until 2012 when Facebook acquired the photo sharing app for $1 billion.)

One thing the influencers have realized — even before the brands themselves — is that more isn’t necessarily merrier.

According to Mike Froggatt, director, intelligence, at digital research firm L2, engagement is indeed impacted once money enters the equation, which comes as no surprise. But first, these content creators must tell followers which posts are sponsored.

According to Froggatt, there is a direct correlation between sponsored content and declining engagement rates, and he has the numbers to prove it. He gathered data from Instagram posts from Jan. 1 to Aug. 31 for nine top influencers. The group, comprised of brand builders and documented converters, includes reigning superinfluencers Chiara Ferragni; Aimee Song of Song of Style; Amber Fillerup Clark of Barefoot Blonde; Arielle Charnas of Something Navy; Christine Andrew of Hello Fashion; Danielle Bernstein of We Wore What; Julia Engel of Gal Meets Glam; Julie Sariñana of Sincerely Jules, and Rachel Parcell of Pink Peonies.

His methodology consisted of categorizing any post with either #ad, #partner or #sponsored as a paid partnership, which is in line with the Federal Trade Commission’s guidelines.

What he found was that, collectively, about 7 percent of the combined 5,667 posts for the whole group were tagged as an ad, but the percentage of sponsored content varied by individual. In fact, Froggatt found drastic differences between those who identified paid content as such and those who “forget” to include those pesky little hashtags that let their followers know when a post is sponsored.

He also made it a point to add that this doesn’t include the 142 instances he found where posts included Revolve hashtags —#revolveinthehamptons, #revolvefestival, #hotelrevolve, #revovlearoundtheworld, etc. Of these Revolve-related posts, only nine were identified as an ad — Song with six of these, Bernstein with two and Ferragni with one — even though the majority of these influencers work closely, and in a paid capacity, with the retailer.

“Julie Sariñana is the least likely to post with #ad, followed by Danielle Bernstein,” Froggatt said, noting that less than 1 percent, or just five out of 678, of Sariñana posts over the course of eight months were labeled as an ad. For Bernstein, he said 4.6 percent of posts, or 34 out of 744, specified that content was sponsored. Bernstein’s average decline in follower interactions for this content was 12.8 percent.

According to Froggatt, Ferragni used an #ad related hashtag 47 times in 1,000 Instagram posts during this period, which means only about 4.7 percent of her content on the platform is sponsored.

“It looks like she didn’t start using it consistently until a Pantene ad in March, right around the time the FTC started cracking down. Her #ad posts had 4.9 percent fewer average interactions than her average post,” said Froggatt, who indicated that this small decline in engagement for sponsored content is working in the 30-year-old’s favor.

But Engel fared even better. Her engagement dipped the least of the entire group when it came to content marked as an ad. Sixty-six of her 437 posts, or 15.1 percent, included notation of a paid partnership, and engagement on this content was only, on average, 3.6 percent less than on her non-sponsored content. It’s also worth noting that Engel has the second-highest percentage of content labeled as sponsored, after Andrew. Andrew counts 19.8 percent of content as an ad and sees an average engagement decrease of 12.2 percent on these posts — more than three times a decrease than Engel.

For Charnas, the #ad hashtag was attached to 67 of 685 posts publishing during the same period, or 9.8 percent of her overall Instagram posts. Her posts featuring some form of an #ad hashtag had an average of 17.7 percent fewer interactions than her average post.

Fillerup Clark and Parcell might want to assess the way in which they present paid content. It seems their promotional posts are wearing the most on their followers, according to Froggatt’s data, which indicated Fillerup Clark and Parcell’s average decline in engagement on sponsored posts was 22.5 percent and 21.5 percent, respectively. And while Sariñana’s average change in interactions was the highest at minus 22.7 percent, the data is less viable because only 0.7 percent of her posts are identified as an ad.

Froggatt stated the obvious: It’s a whole different ballgame when it comes to brand mentions. Engagement dip is less apt to occur when it comes to brand mentions, or posts where the influencer isn’t being paid by a brand and therefore doesn’t have to identify a post as #sponsored or an #ad.

He cited a study released last month by L2, “Influencers 2017: A New Paradigm in Social Engagement,” which delved into influencers’ ever-growing engagement levels and reach. A portion of the research looked at the number of brand partners mentioned by influencers, and divided the findings by tier, including “mega” influencer and celebrities.

From the looks of it, two types of “influencer promiscuity” are starting to take shape in an exploding sector, in the form of brand mentions and brand partnerships. While social media users are less accepting once they learn someone has been paid to promote a product or business, Froggatt pointed out that brand mentions don’t elicit a significant change in engagement rates in relation to influencers who mention more brands. In other words, there was no significant point where engagement dropped off, no matter how many brands one seems to call out in their Instagram feed.

Apparently followers trust when their favorite influencers post about a pair of jeans or face mask of their own volition, solidifying the idea that this group is integral to brand building and to driving conversion.

Froggatt rattled off a series of stats — Gigi Hadid had 101 different brand mentions between January and August; Kendall Jenner had 99 brand mentions; Kylie Jenner had 52 brand mentions, and Kim Kardashian had 41 brand mentions. And none saw any significant adverse effects on their engagement rates.

Despite this, Froggatt warned that brands should proceed with caution: “If your potential influencer partner is more promiscuous than the average, it may warrant a second look at the partnership, or some more stringent language within the contract.”

Benefit learned this the hard way.

Toto Haba, senior vice president digital at Benefit, said one of the influencers the brand tapped to be part of its Brow Collection launch in 2016 wound up launching her own brow products in very close proximity to the LVMH Moët Hennessy Louis Vuitton-owned company’s program.

“At that time we didn’t enforce publicly enough exclusivity and we should have,” Haba said, declining to name the promiscuous influencer in question. “This is a person we actually vetted. It wasn’t in her best interest to not disclose that before she accepted our invitation to the event. We’re looking for people who are dependable and up front with us. It goes both ways.”

Haba called Benefit’s relationship with influencers “monogamous.”

“We believe in long-term relationships,” said Haba, who believes that one-off posts are no longer a viable way to partner with content creators. Yes, a single post might drive a quick sale, but it does little in the way of forging meaningful relationships with content creators, which ultimately, increases awareness in the long term.

Or in other words, single promoted posts that don’t accompany a deeper brand relationship have become the one night stand of sponsored content, which is what almost everyone interviewed for the story pointed to as least effective type of brand partnerships.

Charnas maintained that she’s become increasingly selective in the partners she collaborates with and considers long-term relationships with brands preferable. For instance, she’s turned down deals with food chains or beverage companies for one-off posts, even though the brands were offering up to $15,000 for a single Instagram post.

Less engagement on promoted posts doesn’t necessarily hinder one’s business either. It’s par for the course, said Charnas when contacted to comment on declining engagement rates on her sponsored content compared to non-sponsored content. She actually expects sponsored content not to perform as well as non-sponsored content.

This is not to say that there wasn’t a learning curve for her when it came to deciding which brands to partner with. She admitted that a partnership with an accessories company two years ago “didn’t make sense,” and the experience taught her what her followers don’t want.

While Charnas often mixes high and low when it comes to apparel, her accessories “are always on the higher end,” she explained, which is why she received backlash from followers when she started to post about working with an approachable priced accessories retailer. She declined to identify the brand.

Much of the product from the brand Charnas referred to retailed for under $100 — and Charnas is known to favor shoes from Christian Louboutin, Céline, Dior and Manolo Blahnik, as well as handbags from Chanel, where certain styles can climb into the several thousand dollar range.

“Everyone knew that I wouldn’t wear it. They [my followers] got very upset about those posts. That was the last time,” Charnas said.

She added: “They’ve followed me for a very long time and they know when something makes sense to me. They aren’t afraid to call me out. Part of my brand is listening to my followers, I’m very open with them and that’s what differentiates me from other bloggers and they feel comfortable being open to me. If I’m posting something [they think is off brand], they are just, like, ‘You would never use this yourself.’ They let me know. They say it to me. They aren’t afraid to tell me it’s upsetting them and they don’t feel like I’m supporting it for the right reason.…I realized I really do have an effect on these girls and I do influence them, and at the end of the day, I need to make sure that they trust me and they believe in what I’m promoting.”

In the beginning, Charnas was so excited to get jobs for her hobby — blogging — that she was less discerning in who she decided to partner with. But this has changed.

In addition to a recent clothing collaboration with Nordstrom that was said to have record sales in its first day, she’s recently inked sizable, long-term deals with Olay and Saks Fifth Avenue. And she’s made sure to shift her approach in the way she communicates this.

Beyond just including #ad in the caption, which is a non-negotiable, Charnas outright will say she was hired by a brand. For instance, she said she told followers, “I just signed a big partnership with Olay, this is their body wash, whoever uses it tell me which are the best scents to buy.” She’s honest about the situation and lets fans know she’s going to be promoting this brand and asks for input and feedback. She maintained this strategy is already resonating better than previous partnerships.

“They don’t think I’m trying to go behind their backs to make a couple of bucks,” she said. She’s found that forgoing a “whole cheesy caption” in lieu of being upfront and getting followers involved by asking questions and what they think gives sponsored posts a “much less sponsored” feel.

Beyond communication, Charnas believes in eschewing one-off paid posts in favor of long-term partnerships. An example: a soup company that Charnas’ one-year-old daughter, Ruby, loves called Bou, which was started by a family friend. She reached out to the brand to ask for more product, which turned into negotiations about working with Bou on a paid basis.

But instead of taking a mid-five-figure fee for a series of one-off posts, Charnas proposed the deal include a small investment from herself and equity in the company, in exchange for a low commitment of Bou-related, sponsored posts and full creative control over said posts. Charnas said Bou is an authentic partnership because it was a regular occurring product in her household before any sort of partnership was on the table.

Bernstein has instituted a “less is more” philosophy into her business for this exact reason. She doesn’t believe there’s a specific number that defines too many brand partnerships, but she now chooses to take on fewer, longer-term contracts that range from six months to one year that are “authentic to her aesthetic.”

Rebecca Minkoff agreed.

“What makes it authentic is that it’s not just a one-time post, but that it’s a larger integration into [one’s content],” the designer said. “I think there are too many of the wrong partners. You can have too many of the wrong, off-brand partners that make the consumer begin to question the authenticity, which is the whole point of going to an influencer in the first place.”

Minkoff also spoke to the flip side of the sponsored post conundrum, as her brand counts Moët & Chandon as a paid partner that was one of four sponsors for the designer’s runway show during New York Fashion Week in September. The brand did a sponsored Instagram post for Chandon and hosted a brunch immediately following the show at Jimmy at The James New York hotel, where the sparkling wine was flowing. The show culminated with an influencer walking down the runway with a bottle of Chandon peeping out of her tote.

Minkoff has a longstanding partnership with Chandon, and for the past two years has co-created limited-edition bottles for the Champagne company and hosted events, such as a two-day Napa Valley getaway with food and wine editors last year. The sparkling wine is also served to customers who events in-store. She confirmed the partnership will continue into 2018 but couldn’t give details.

The designer described working with Chandon on-brand for her namesake company, citing sparkling wine as the number-one requested beverage in her stores. The main reason it works, Minkoff explained, is because the partnership has “legs.”

“It’s authentic and a layered partnership that’s not a transactional, one-time post,” Minkoff said, calling one-offs “expensive, one and done, and with the algorithm you don’t know who winds up seeing it, whereas if you have a longer-term partnership, the odds of being seen are better.”

Clare Ngai, a manager at The Society Management, a boutique agency that works with influencers such as Irene Kim, said an attitude of “whatever goes” in the promoted post arena several years back has changed sharply.

A savvy consumer who can discern authentic partnerships from inauthentic ones — “if [the influencer] is a high fashion person and they’re posting about J.C. Penney, it’s obvious” — has played a key role in Ngai and her team often advising talent to decline a job, even if could have paid six figures or significantly “raised their notoriety.”

She cited Calu Rivero, a New York-based, Argentinian born influencer, actress and DJ with 884,000 followers on Instagram — who is vegan and not shy about her support of eco-friendly and sustainable fashion. Because of this, Ngai said Rivero has definitely shied away from working with certain brands who use an excess of leather or fur, as well as fast-fashion labels.

“We’ve supported her decisions to turn down certain jobs because of that. A couple of years back people wouldn’t have understood why you would turn a deal down, and now they understand authenticity,” Ngai said.

Rivera recently inked her biggest partnership of the year with Elizabeth Arden for 2018. As a spokesperson for the beauty brand, she will appear in digital and in-store marketing materials, as well as appear in videos and create her own content, all of which will be cross promoted by herself and on Arden’s social channels.

But if the deal is on-brand, influencers shouldn’t hesitate, a source said of the growing amount of partnerships for influencers, especially ones outside their traditional fashion or beauty brands that now include cars, airlines, bottled water, detergents and yogurt. And once it’s determined that something is “on brand,” this individual warned influencers that they must be smart about “pacing” and make sure content is posted over a long period of time so as not to “shock” the consumer.

“If you see something and you’re surprised by it, like, ‘Hmm, I didn’t know they would stay at that hotel” or ‘Hmm, I didn’t think that was the car they would drive,’ those are the times that you begin to lose credibility,” the source added, crediting Song and Rachel “Rocky” Barnes as two influencers who manage to choose brand partners that fit into their lifestyles. While looking at Barnes’ feed recently, this person added, sponsored posts “didn’t come as a shock to how she’s living her life. It’s on brand.”

Perhaps one of the least promiscuous of the content creator bunch is Evangelie Smyrniotaki of Style Heroine, who has 212,000 followers on Instagram. Smyrniotaki contended she’s selective with brand partners to a fault.

“It costs me my income; it really costs me my income because I’m so selective,” she voiced. “But on the other side, I can live with myself.”

The Athens, Greece-based blogger counts a handful of luxury brands as partners, including Calvin Klein, Valentino, Jimmy Choo (she was one of the faces of their last two digital campaigns), Eres, FRWD, Nike, Google, Byredo, Roger Vivier, Linda Farrow, Michael Kors, Tod’s and Fendi. She’s also worked with a handful of the global high-end e-commerce players, from Net-a-porter and Matchesfashion to Mytheresa, Luisaviaroma and Farfetch, where Smyrniotaki maintained she is successful at driving conversion.

Earlier this year, a “Shop With” feature Smyrniotaki did with Matchesfashion saw most of the items she mentioned immediately selling out. She recounted a time she wore a red Rosie Assoulin top from Net-a-porter in Dubai and posted about it, and the top — which “cost like 1,600 euros,” or close to $1,900 — sold out quickly thereafter. Even if the e-tailer sold just 10 of the tops, that’s still about $20,000 in sales driven by a single post. Multiply that by several times in a week or month and it could add up to hundreds of thousands of dollars per month, and Smyrniotaki just might become the next go-to converter for luxury brands and retailers.

“If you can work with everyone and work well, that’s amazing. If you can support all the products you have something very few people have, but you have to convince your audience — and yourself — you can wear it or put it on your face. I cannot convince myself I can wear it all,” Smyrniotaki said.

Even as influencers become more selective about which brands they work with, the brands are consistently trying to develop ways to sidestep the whole #ad thing knowing those posts don’t perform as well.

In an e-mail obtained by WWD, a brand offered a blogger an upfront plus a commission of sales for a season to structure the deal as a “guaranteed advance” so “it is more like a partnership than an ad. Same dollars just different wording. So the word ‘ad’ [doesn’t] have to appear.” The blogger declined the cut of sales and treated the deal like any other and made sure #ad appeared in the sponsored post. This is not the only time a brand has tried to do this, this content creator maintained, adding that it only occurs with smaller firms.

But Danielle Garno, a shareholder in the Miami litigation practice of Greenberg Traurig who specializes in issues faced by the fashion industry, doesn’t think all the disclosing will affect businesses.

“The consumer is just going to become so used to seeing it that they will be, like, ‘Yeah it’s another paid advertisement.’ Maybe we trust our influencers and we have this relationship with them that we trust them enough to have the integrity to not use a product that they absolutely hate,” Garno said.

Although regulations have been put forth by the FTC detailing that individuals must disclose sponsored content, Garno maintained that “they aren’t actively monitoring but they are aware.”

Then there is the issue of creative control.

Fo Arleta Fowler, digital talent and packaging agent at Creative Artists Agency, or CAA, the reason sizable deals “fall apart” is usually at the hand of brands that demand creative control over content, including trying to dictate which platform one should post on or what content messaging should look like.

“[This] is hard for brands to give up,” said Fowler, who’s seen that brands typically bring talent in at the very end. “They say ‘No, no just amplify the message’…and there’s a lot of restrictions around that.”

In her experience, the partnerships that bring talent on early in the process when they’re first starting to develop brand messaging are the ones that work because influencers can give input on creative direction.

When it does work well, though, it works really well, according to Fowler. An example she cited was that of Liza Koshy, selected as one of three digital creators for Calvin Klein for the launch of an exclusive brand shop on Amazon Fashion in June.

“Liza ended up doing more posts for Calvin Klein. They weren’t sponsored…she didn’t tag it the same way [as sponsored] she did when it was in the campaign.…They got additional promotion from her because she’s showing that this product is really part of her lifestyle [and] that further adds credibility,” Fowler said.

A sponsored Instagram post of Koshy’s during the partnership garnered almost 1.4 million likes and more than 4,000 comments and an “organic” post published after the partnership ended received nearly 1.7 million likes and about 16,500 comments.

By all accounts, influencer mentions that occur after a partnership is over are the “Holy Grail.”

This was echoed by Haba from Benefit, as well as Musa Tariq, chief brand officer at Ford Motor.

For Tariq, it’s hardly about the post-sponsorship mention. He’s doubly fascinated by the #NotSponsored hashtag, which he referred to as the “modern-day marketing utopia.”

“The fact that people now — when they’re talking about something they love — have to mention the fact that it’s not sponsored says it all. That is something super interesting…when someone says, ‘I really want to show you something,’ and it’s not sponsored,” said Tariq, who was brought on board by the automobile giant earlier this year.

The 34-year-old executive is in the midst of developing a global branding strategy where influencers will play a key part. Tariq was part of the founding digital team at Burberry and also had stints at Nike and Apple before landing in his current role at Ford. (He called a February 2010 Burberry “Twitter Takeover” by Elle’s then-creative director Joe Zee and Bryanboy the “first OG [original] piece of social influencer [content] in the fashion world” where neither party was paid.)

He admitted that he no longer looks to brands as examples of best-in-class marketing. He looks to the influencers, who have become masters at connecting with and engaging their audiences.

“If anyone who asks who is doing it best in social, it’s not brands, it’s influencers. Modern marketers need to look and understand what influencers are doing right,” Tariq said. “They spend zero in media and they connect with people. That’s another dream utopia.”

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