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Influencers: higher ROI than traditional digital marketing
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Influencer Marketing + Gaming

At the beginning of this year, there were 4.2 billion social media users around the world (equaling ~54% of the global population), up 490 million (or 13%) from the previous 12 months (Source). As time spent on social media increases, the marketing opportunity of social media influencers will continue to rise. The global digital advertising market in 2021 is expected to be ~$180b (Source). Influencer marketing is expected to grow to be worth $13.8b in 2021 and boast higher ROI and engagement than traditional marketing campaigns (Source).

Types of Influencers?

Within the influencer umbrella, there are 4 distinct types of influencers, based on the size of their following and their niche:

• Mega-influencers →1m followers. These are often (but not limited to) celebrities who have gained their fame outside of social media
• Macro-influencers — 40k — 1m followers. This group tends to consist of two types of people. They are either smaller celebrities or they are successful online experts
• Micro-influencers — 1k — 40k followers. These are typically ordinary everyday people who have become known for their knowledge about some specialist niche
• Nano-influencers — <1,000 followers who typically have immense knowledge influence in an extremely specific niche

What do influencers do for a brand?

Primarily, influencer marketing works across 3 main verticals — building brand awareness, strengthening consumer-brand relationships, and improving buyer conversion. In gaming, this is especially prolific.

Influencer marketing has been successful across industries — Film, Music, Food, Medicine, Fashion, Beauty, Personal Care — however, some of the most successful stories are within consumer facing products:

• Subaru (Instagram) — In 2016, Subaru launched their “Meet an Owner” campaign, where they worked with 20 influencers to create tailored pieces of content around their car on Instagram. The campaign had an overall engagement rate of 9% (for reference, mega-influencers had engagement rates of 4.96% on TikTok, 1.21% on Instagram, and 0.37% on YouTube, Source) generating thousands of comments and millions of likes for 58 sponsored posts. Influencer Zach King notably had 9m views on one video. Subaru saw an increase of 10% in sales that year (Source).
• Chipotle (TikTok) — In 2020, Chipotle launched a Halloween “Boorito” campaign, where users could post videos showcasing their before and after Halloween costume transformations using Chipotle’s custom sound bite. The top 5 posts (by likes) won free burritos for a year. The #Boorito tag collectively had 3.6 billion views. Notably, Brittany Broski’s post garnered 160k likes (Source).
• Walmart (TikTok) — In 2019, Walmart launched their first TikTok campaign, using the tag “#DealDropDance”. For the effort, Walmart signed six influencers, reaching over 17m followers (Source). Each post was an entry to their giveaway to win a $100 Walmart gift card (Source). The tag accumulated 4.1b views (Source).

What does this mean for monetization? TapInfluence and Nielsen Catalina Solutions found that influencer marketing generates 11x the ROI of traditional digital marketing (Source). Twitter reported that ~40% of users have made a purchase as a direct result of a tweet from an influencer (Source).

Influencer marketing in video gaming is more interactive and personal

Instead of utilizing traditional social media platforms such as Instagram, TikTok, and Facebook, gamers and gaming influencers typically flock to Twitch and YouTube. There is a distinct difference in content as well — instead of media that can only be viewed, gaming content is much more interactive and personal (live streaming). Static, viewable content is still game/category specific, ranging from commentary/review, reaction, and play through videos.

The more personal live/video interactions between consumers and influencers directly correlates to engagement, direct influencer monetization, and buyer conversion to branded products. According to a study by Bazaarvoice, more than half of surveyed audiences (54%) in Europe feel that influencer sponsored content misrepresents real life while 80% of Twitch users are open to brands sponsoring a specific gamer. Some more statistics on viewers and gaming influencers on Twitch:

• 62% of viewers engage with esports + gaming personalities daily (Source)
• 70% of viewers offer monetary support (Source)
• 64% of viewers purchase products recommended by them (Source)

There is a greater opportunity for video gaming companies to take advantage of influencer marketing. However, this needs to be a dedicated strategy and not an afterthought to a company’s marketing budget. Similarly to companies in other industries, gaming brands need to avoid the same risks that other industries encounter and craft a strategy targeted at gamers. Here are a thoughts on how to do this:

1. Choose the right format — It is important to choose the right format for each campaign and the right platform that appeals to the target audience. For example, games that want to live-showcase their visuals should lean toward YouTube, which can stream up to 4K/2160p at 60fps, vs Twitch (which only streams at 1080p HD at 60 fps (Source). Games that want to utilize influencers with high engagement via micro-interactions should lean more toward Twitch, which boasts a broader library of extensions.
2. Choose the right influencers — It is also important to remember that partnering with influencers ties the brand to an identity which is a two way street when relying on loyalty and trust. Set rules that influencers must adhere to as the face of the brand. Gaming-related companies should heavily consider micro-influencers compared to others due to their small and focused niche, authenticity, cost, and engagement. In fact, micro-influencers can have up to a 60% increased engagement rate compared to macro-influencers (Source).
3. Define your strategy and how you measure success — According to a survey by the Influencer Marketing Hub, only 67% of respondents measure the ROI from their influencer campaigns. This is entirely the wrong way to go. Ahead of a campaign launch, companies must set their expectations around the number of posts/streams, minutes streamed, etc as well as how success will be measured (# of viewers, likes, interactions).

Thanks,

Josh

Managing Partner | Konvoy VC (video gaming fund)
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