Influencer Marketing in the Age of iOS 14.5
By: Amanda Morgan, LH Summer Platform Associate
The 2010s gave rise to DTC companies like Glossier, Warby Parker, and Everlane. Companies like these disrupted their categories and became household names. When we invested in these companies, and many others, their early success could be attributed to the growing digital marketing capabilities being offered by platforms like Meta, Google, and Snap at the time. These platforms made use of enormous amounts of data to reach users with highly targeted, wide reaching, and measurable advertising. These measures enabled enormous growth for DTC businesses.
In the past decade, though, consumer sentiment toward data privacy has shifted from ambivalence to concern, and in response, Apple introduced a major iOS change that rocked the digital marketing landscape. In April 2021, Apple rolled out iOS 14.5, which allowed users to decide whether their behavior across platforms could be tracked. The adoption of the “Ask App Not to Track” feature gained immediate traction — a recent survey estimates that 62% of iOS users have opted out of tracking.
The changes to iOS 14.5 had immediate impacts on social media companies’ businesses (Facebook said that Apple’s App Tracking Transparency feature would decrease the company’s 2022 sales by about $10 billion) and the effectiveness of digital advertising. The loss of tracking meant that platforms could no longer gather as much data about user behaviors online, meaning that the extensive user profiles they built for targeting would no longer be as in depth or accurate. The inability to track user behavior across apps has also resulted in loss of efficacy metrics. Because users can’t be followed across the internet, marketers are no longer able to determine if their ads are effective at converting to purchase. The combined impact of diminished targeting and loss of full tracking has resulted in less effective and useful digital advertising spends.
At the same time, we saw online shopping accelerate significantly during the pandemic. (E-commerce sales increased by an estimated $244.2 billion, or 43%, in 2020.) In response to consumers moving online, many businesses shifted marketing dollars from traditional channels (TV, OOH, print) to digital. The increase in demand for a finite supply of digital ad units has driven up the cost of digital advertising. For businesses that depend on digital advertising to drive sales, the result has been an unmanageable increase in consumer acquisition cost (CAC). The combined impact of increasing cost and diminishing ability to target and track effectiveness of performance has led many marketers to search for new ways to reach their consumers and efficiently spend their marketing dollars. One new strategy has emerged as king: influencer marketing.
For consumer products businesses, micro-influencers can be an incredibly effective option to reach core consumers and drive online sales. From a targeting standpoint, because micro-influencers have smaller audiences (10K — 50K followers), brands can use their niche as a proxy for targeting (i.e. fitness, cooking, fashion, etc.). From a cost standpoint, influencers can be more efficient than traditional ad spends. If brands are able to contract them over a longer period of time, and compensate them partially with product, influencers can be lower cost per post than traditional digital ads.
Micro-influencers are also more engaging, and less likely to be skipped than traditional ad placements, so they are also more likely to deliver a memorable brand message. Smaller influencers, especially, often have highly engaged audiences and close relationships with their communities. This means that brand messages are more likely to reach and resonate with their audience. Micro-influencers are also useful messengers because they are seen as credible voices that their followers will turn to for recommendations and advice. If they can authentically represent and recommend a brand, they can meaningfully influence their audience. With tools like affiliate tracking (i.e. a customized coupon code per influencer), brands can also track an influencer’s effectiveness at driving purchase. Finally, if brands can form strong relationships with their influencer networks, influencers can become tools for growth and development. As voices of a brand’s key audience, and brand builders themselves, influencers can advise brands on everything from their product pipelines to their communications and strategic priorities.
Some key “rules of the road” to keep in mind as you consider influencer marketing:
- Know your customer: Micro-influencer strategies are most effective for brands that have a clear understanding of who their consumers are. You need to know who you are trying to reach to understand the influencers who reach them.
- Know who you’re working with: You’re attaching your brand’s name and reputation to the people you work with. While this can be an incredible way to build authenticity in communities and connect with consumers, this also means you are at risk if your influencer does or says something controversial. Make sure you know who you’re working with because your reputations will become intertwined.
- Authenticity is key: Choose influencers that actually believe in, use, and connect with your brand (especially if you are trying to target Gen Z). Inauthentic partnerships are obvious and ineffective.
- Go micro vs macro (i.e. 10K — 50K followers vs 100K+): While 100K followers gets you more reach, the larger an influencer’s audience gets, the less engaged their followers become. Engagement will ultimately help you build the strongest relationships so prioritize it over reach, especially if your brand is small.
- Consider channel: Depending on who you’re trying to reach, consider what channels influencers are most popular and engaged on. While they may have a presence across IG, TikTok, Twitter, their following is likely most active on one platform. Ensure that you’re finding influencers on platforms where your consumers are spending the most time (i.e Gen Z -> TikTok, Gamers -> Twitch or Discord)
- Long-term vs short term: While many influencers will accept payment for individual posts, lean toward longer term relationships (contracts for 6+ months). This will help amortize cost per post, but it will also allow you to build deeper and more meaningful relationships with your influencer network, making their endorsement of your brand more believable and ultimately stickier.
- Whitelisting (in paid partnership with): Consider putting dollars behind an influencers post if they have a larger following. This enables the content to get in front of more users while still being delivered by a trusted source users are willing to engage with.
- Use your influencers for more than posts: Influencers are brand builders themselves; they understand who they are, what value they bring, their audiences, and what content is most engaging. Lean on them for more than just content — they can be powerful tools to understand your consumers, and help you identify blind spots, product needs, and uses. Consider using them as sounding boards as you create your product pipelines, craft your messaging, and build consumer insights. For influencers with whom you’re especially bonded, consider opportunities to do collaborations, which will further link your brands.
- Affiliate tracking can be powerful: If you sell products online, give your influencers affiliate codes and compensate them for the sales they generate. If you have shared success, they’ll be bought in on helping you grow. Tracking tools like these also help you understand the efficacy of individual campaigns and help you plan better for future engagements.
While the iOS changes present a challenge to marketers, their impacts aren’t insurmountable. With creative outreach efforts and impactful brand messages, marketers can still reach and build relationships with their core consumers. Thoughtful influencer strategies are a great vehicle to do just this.
Further reading:
- “How to Use Micro Influencer Marketing to Grow Your Business” via Later
- “Micro-Influencer Marketing: A Comprehensive Guide” via Hubspot
- “Micro-Influencers: When Smaller Is Better” via Forbes
