How Data Analytics Is Sponsoring A Slow Divorce Between Social Media Influencers And Luxury Brands

Before 2005 the word “influencer” probably had a different connotation than what it would have today. Over the last decade and a half, social media content creators have become a center of focus, often attracting much more attention than traditional celebrities.

Over the years, influencer marketing has risen to become one of the most effective marketing and awareness creation forms. Of all the industries that utilize influencer marketing, the fashion and luxury industry has probably been one of the greatest benefactors. Influencers have also made most of their income from working with luxury brands. For the most part, this has been a marriage of convenience.

Influencers with sizable active followership can make a substantial full-time income from their social media activities and marketing partnerships with luxury brands. However, that doesn’t seem to be enough these days as more and more influencers, and micro-celebrities, are opting to start small businesses on the side, which often preclude them from marketing any brands in the same industry.

Recently Youtube and Instagram influencers Ling and Lamb started a nail salon in Connecticut; Wow Nails. The Nigerian-American couple leveraged their massive online followership to build a physical business that has already begun thriving in just a month. UK beauty Influencer Jess Hunt also recently launched Refy Beauty, a brand whose unique eye-brow care products have since taken off and been endorsed by some noticeable names.

The overwhelming sentiment is that leveraging their brand to build a business is the logical next career step for most of these influencers. However, when you consider that many became content creators to avoid the hassle of running a full-time business, this sentiment begins to ring hollow.

Some experts believe that this is more of a signifier of weariness around influencer marketing among brands in the luxury and fashion space, resulting in them devoting less marketing dollars towards influencer campaigns. This drop-off may be responsible for influencers starting small businesses to augment their income.

Customers want something different

The influencer marketing reticence that brands are facing is likely influenced by the perceived weariness of the customer base, who seem to want less advertising in their social media content.

Between the ads that social media platforms run and the influencer campaigns that brands leverage, the average social media user has become disillusioned and less likely to patronize these brands. Social media users often follow influencers that they love on the various platforms, and so they are more likely to patronize the influencer’s personal business than any other they endorse.

While this explains a significant part of the equation, Berge Abajian, CEO of leading jewelry brand, Bergio, explains that the lack of measurability and personalization has also taken the edge off influencer marketing for most luxury brands.

He said, “Today’s customers want a hyper-personalized customer experience, and influencer marketing does not really deliver in that regard. It is really difficult to gauge how successful influencer marketing campaigns are, which makes it more suitable as a brand awareness tool than as a lead generation tool. Intent-based data is fast becoming the most influential tool that dictates how online retail brands sell and manage their customers, and influencer campaigns deliver little empirical data about the customer that can be leveraged for future marketing.”

Bergio, like most other jewelry and fashion brands, has leveraged influencer marketing over the years to good effect and is now pushing a more direct, personalized, data-driven approach toward marketing, as evidenced in their recent partnership with The AdsLab a privately owned data company that helps brands hyper-personalize their online marketing through the use of their proprietary super identity graph, tracking over 1 trillion behaviors each day.

Speaking with the founders, Adam Lucerne and Jesse Gibson, they outlined their plans on partnering with Bergio and how retail brands should be more focused on leveraging modern-day data solutions like identity graphs to hyper-personalize their marketing efforts and have more control over who they speak to rather than continually rely on influencers and sponsors.

Customers in the jewelry and fashion industries appreciate exclusivity and hyper-personalization, which explains why many brands are moving towards more data-driven methods. Data analytics is a key driver, as it enables luxury brands to identify leads, deliver personalized experiences and segment their high-net-worth consumers based on their purchase patterns. This segmentation can help these brands to develop customized marketing strategies for their different segments.

If Bergio is anything to go by, influencers may be facing the prospect of losing a significant portion of their income from luxury clients. In the last 12 months, Bergio has embarked on a radical digital adoption campaign and implemented a new data-driven direct-to-customer model that has significantly raised its revenue, setting the company on the path to crossing the $25 million mark by the end of 2022.

What to expect

Influencer marketing is often one of the most expensive means of marketing that luxury brands use, and when you consider the difficulties in gauging its success, continuing at these high rates seems unsustainable.

Social media platforms like Instagram are impossible to ignore in any influencer marketing campaign because of their unique demographic and reach. Yet, Instagram doesn’t allow clickable links in their post text. This makes affiliate links a little challenging to utilize on the platform. Most followers exposed to a brand via an influencer’s page still have to find the brand via Google. This makes it hard to trace the impact of the campaign.

Brands have to utilize promo codes and other measures to track impact, but these elements only work for leads that reach the end of the marketing funnel. A lot of data about those still in the funnel is lost in the mix.

These difficulties are responsible for the reduced enthusiasm of both influencers and luxury brands in utilizing influencer marketing; while influencers are starting personal brands, luxury brands are utilizing more data-driven marketing approaches.

It appears that the cost of influencer marketing campaigns may drop significantly, and brands will likely utilize it more as an awareness tool than as a lead-generation tool.

Influencer marketing should always have significant value to luxury brands, especially newer brands seeking to break into the industry. However, this relationship is being redefined constantly. This marriage will likely end in a divorce, but luxury brands intend to retain visitation rights.