The Impact of the Influencer

Developing a Social Media Strategy

Anna Fenlon

Business Case
Source: Bloomsbury Fashion Business Cases
DOI: 10.5040/9781474208765.0001
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Abstract

Nuala is a fictional digital fashion retailer of young womenswear, offering trend-focused products to the global market. Nuala has successfully harnessed the power of social media influencers as a key aspect of its global brand strategy. However, Nuala has struggled to identify a clear pattern of the type of influencer or influencer strategy that works most successfully for them. For their Autumn/Winter collection they must consider and rationalize the contributing factors that inform the promotional strategy, including local and global approaches, influencer reach, content, and measurability.


Learning Objectives

Upon completion of this case, students should be able to:

  • Develop social media strategies for a defined target market that address region-specific and global approaches.

  • Rationalize and critically evaluate marketing and promotional decisions, considering the need for measurability.

Introduction

Nuala is a young fashion womenswear e-tailer based in the United Kingdom. Nuala retails trend-focused products at affordable prices to meet the demands of its fashion-hungry consumer. Nuala’s product offering includes clothing, footwear, and accessories. Trading purely online, Nuala stocks 5,000 ever-changing lines bought in small quantities to provide trend freshness and the ability to turn over stock quickly.

Although based in the United Kingdom, Nuala operates globally; its biggest international markets are Australia and the United States. Nuala reported total sales of £80 million for the last financial year. Sales revenue by region was broken down as:

United Kingdom£60 million
United States of America£8 million
Australia£4 million
Rest of World & Europe£8 million

Nuala currently budgets 10 percent of its annual revenue to spend on marketing. Rather than using traditional promotional tools such as print and television advertising, Nuala has successfully harnessed the power of social media influencers as a key aspect of its global brand strategy, currently driven through Instagram. Influencers are individuals with an engaged and loyal social following, perceived as a highly credible and influential source of fashion authority by their followers. Nuala’s current Instagram following is 1.5 million.

Nuala knows its market is receptive to influencers, based on previous activity and the social connectivity of the target customer. The target consumer is female, aged 16–24. They are students or early career professionals, spending on average £100 on fashion per month. The target consumer maximizes their fashion spend, sacrificing product quality for newness and volume. They connect with friends using social media—preferring Instagram and Snapchat, but are still active on Facebook and Twitter. They aspire to dress in the style of their icons including Kendall Jenner, Gigi Hadid, and Lily Rose Depp.

Business Problem

Although Nuala regards influencers as being vital, in terms of engaging with their target market and to their overall business strategy, it has struggled to identify a clear pattern of the type of influencer or influencer strategy that works most successfully for them. Nuala has applied the below approaches involving the payment and nonpayment of influencers:

  • Influencers producing product collaborations and being given an up-front fee and/or percentage of sales.

  • Influencers being paid a percentage of sales on the products they have promoted, tracked through use of a unique promotional code.

  • Influencers being paid a fee for a single/series of content posts.

  • Influencers being gifted products to promote and keep but not paid a fee.

Instagram does not currently allow clickable links to be embedded in posts, so tracking click-throughs and accurate sales conversions from influencer posts to Nuala’s website is not possible. However, the ability for influencers to meet defined key performance indicators (KPIs) is important. Using influencers is a complex, long-term strategy that goes beyond immediate sales. For these reasons, Nuala refers to the below brand–customer focused KPIs when assessing influencer performance on Instagram:

  • Engagement: How users interact with the influencer posts indicates social value. Engagement rate can be calculated as total post engagements (i.e., likes + comments) divided by influencer audience size multiplied by 100 to give a percentage figure. Four percent engagement is considered to be strong.

  • Audience reach: Number of users who are exposed to the content varies depending on the level of influencer. Audience growth can be calculated by comparing pre- and post-influencer campaign-owned audience numbers.

  • Share of voice: Brand mentions and tags by users. Again, can be looked at pre- and post-influencer activity to measure any change. Indicates users are mentioning the brand in their own posts, organically raising brand awareness.

Nuala is attempting to formalize its approach to influencers and has segmented influencers into the following tiers, defined by follower reach:

Globally FamousA handful of prominent, Insta-famous influencers. High reach within all geographic regions with a social following of 100k+
Region LeaderBased within a geographic region but may have some crossover global impact. Has a social following around 50k. Up to 10 individuals per region
Brand ArmyA significant volume of individuals with much lower social following but acting as hyper-engaged brand advocates. Have a social following of less than 5k

Each tier has its own strengths and weaknesses. Nuala has worked with global influencers who have the weight to positively impact on KPIs; however, their competitors are also targeting these same individuals, causing some authenticity and content saturation issues with the target market. Engagement rates are sometimes lower for influencers with very big followings. Conversely, local or region-specific influencers connect and engage well with users, but their content is less meaningful globally, thus resonating less if reused across Nuala’s internationally facing owned channels and other marketing communications. They also have less of an impact when looking at reach as a KPI. Bearing in mind these factors, plus varying costs of this form of promotion and issues regarding measurement, Nuala is now at a crossroads with regard to how to continue with this promotional strategy.

Business Questions

Nuala is planning the launch of its Autumn/Winter collection. This will be retailed across all regions but with particular focus on its key markets—United Kingdom, United States, and Australia. Influencers will be key in promoting this through Instagram. Produce a short visual presentation that outlines the below:

  • Identify a range of suitable influencers that could align with Nuala for each of the identified tiers (Globally Famous, Region Leader, Brand Army). Define the primary tier you wish to focus on and give reasons for your answer.

  • Propose the types of content your chosen influencers could create and post to promote the new Autumn/Winter collection, bearing in mind the platform (Instagram) and the interests of the target market.

  • Research levels of payment that may be suitable for your chosen influencers and create a rough budget.

  • Suggest suitable metrics that will allow you to measure the impact of influencers to help determine your strategy success.

  • Consider the positives and negatives of a region-specific versus a global approach to influencers. Conclude the type of approach that you feel would best suit this brand going forward.

  • Provide an action plan addressing the implications of influencers and sponsored posts. Propose ways the brand could manage any changes to the technology used to facilitate this form of promotion, for example, another social channel overtaking Instagram in popularity. Also, consider any challenges to the ethics of this promotional method.

Teaching Notes and Grading Guide

This case study is designed for a response in both a written and verbal presentation format. 30–45 minutes is recommended for students to put their strategies together. Have students present to each other and critically discuss the validity of their proposals.

According to a recent Fashion Beauty Monitor report in association with Econsultancy, 42 percent of surveyed brands were spending less than 10 percent of their marketing budget on influencers. Comparatively, around a third surveyed (32 percent) spend 10–29 percent. Students could use this report to rationalize their budget formation along with details in the case (such as Nuala allocating 10 percent of revenue to marketing spend). The report can be downloaded from http://hello.fashionmonitor.com/influencers/

For guidance on measurement and metrics, see KPIs in case study and Further Reading. For further development, this case could be applied to different market levels by adapting the profile of the fictional brand.

References and Further Reading

Find in Library Bendoni W. 2017. Social Media for Fashion Marketing . London : Bloomsbury.

Econsultancy. 2017. “Should Marketers be Able to Prove the ROI of Influencers?” Accessed July 27, 2017. https://www.econsultancy.com/blog/68956-should-marketers-be-able-to-prove-the-roi-of-influencers .

Forbes.com. 2017. “Earning Power: Here’s How Much Top Influencers Can Make on Instagram and YouTube.” https://www.forbes.com/sites/clareoconnor/2017/04/10/earning-power-heres-how-much-top-influencers-can-make-on-instagram-and-youtube/#125a80bd24db .

Forbes.com. 2017. “How to Measure the ROI of an Influencer Marketing Campaign.” Accessed July 27, 2017. https://www.forbes.com/sites/deeppatel/2017/04/21/how-to-measure-the-roi-of-an-influencer-marketing-campaign/#6a6633c76348 .

Find in Library Rowles D. 2014. Digital Branding: A Complete Step-by-Step Guide to Strategy, Tactics and Measurement . London : Kogan Page.

Vogue.co.uk. 2017. “What Is an Influencer?” Accessed July 17, 2017. http://www.vogue.co.uk/article/what-is-an-influencer .

This case is based on a fictional company to provide material for class discussion and independent learning. Names of companies and individuals are used in a fictitious manner and any resemblance to actual companies or individuals is purely coincidental.