Brands trying to compare the cost of an influencer campaign to the cost of buying ads themselves on social channels are making a mistake - here's why.
To start, they're doing the classic apples and oranges comparison. It will always be more cost effective for the brand to buy ads on their own social channels. But in that instance, the brand to preaching and bragging about themselves. What would be more effective, and ultimately help drive sales, is a third-party and doing the talking, especially since consumers feel that friends and family and more influential than brands and/or celebrities.
With that, what we're trying to say here is that the analysis can't be on just a CPM basis, it needs to be on an outcome basis. Is it more effective for you as a brand to talk about yourself? To introduce yourself to the world? Or is more effective to have a third-party talk about you and how you make the world a little bit of a better place. For most of our clients they do both.
If you were to analyze costs, there are other factors your need to include than just your initial investment. You have to factor in the cost of the influencer to produce the content and reach their audience, the cost to figure out the highest performing content and then get that content in front of the right people, etc. It is not simply going to be a CPM based buy. If you want to do a cheap CPM based buy, banner ads are going to win all day and we know how well they perform (hopefully you can sense my sarcasm there).
In the end, it really has to come down to performance, and I think one of the reasons brands are investing billions of dollars in influencer marketing is because they're seeing outsized returns from the right kind of influencer marketing. So let's focus less on the CPM and focus more on content that's going to change behavior in a positive way.