Introduction
Over the last 5 years influencer marketing has emerged as a powerhouse strategy, revolutionizing the way brands connect with their audiences and reaching over $20 Billion Global Size Industry. Influencer marketing is no longer a niche tactic but a crucial element in the marketing mix, offering unparalleled engagement, authenticity and performance. In this landscape, understanding how to effectively scale up influencer marketing efforts without compromising results has become a major challenge.
How to scale up influencer marketing spend efficiently while ensuring stable and improving performance over time?
Overview of the TATAM Digital Methodology
At Tatam we call OTD for One-Time-Deals to single influencer collaborations. These are one deal one fee one video sponsorships. At the begining of every campaign, where we are still figuring out what works and what doesn't, almost every deal is an OTD.
As performance evolves we get some top-performing creators to collaborate on a longer term contrat, what we call LTDs for Long-Term-Deals. Typically, LTDs last for 6 months, 3 video collabs, with bi-monthly posting.
Our OTD-LTD Methodology relies on a data-driven decision making process moving top-performing OTD to LTDs, while always leaving a substantial portion of the budget for testing new creators.
LTDs provide sustainable predictable results, while OTDs function as testing budget and source of future LTDs.
Detailed Methodology and Results
Stage 1: Testing Stage
In testing stages, some top-performers are found but LTDs account for less than 15% of the budget, leaving plenty of room for testing for new talents and content verticals.
In this campaign, 11% of total budget was spent on LTDs, which delivered 21% of total sales at half the cost.
Cost per acquisition from LTDs 2x better than OTDs! The best OTDs will be renegotiated as LTDs, optimizing CPM and CAC.
Stage 2: Growth Stage
Investment on LTDs is increased, as more top-performers are identified. The campaign runs still has plenty of budget for testing.
In this case campaign, 26% of the budget was being allocated to LTDs, achieving 27% of total sales at 10% better CAC.
Cost per views was the same both for LTDs and ODTs and CAC was slightly better on LTDs.
Stage 3: Stability Stage
LTDs stock and performance are consolidated over time, and start to drive the campaign results. Booking LTDs ensures full and efficient budget allocation.
In this case campaign, 54.5% of the budget is spent on LTDs, bringing 68% of influencers sales.
Cost per acquisition is significantly better for LTDs, almost half the CAC vs OTDs.
An optimal case study on a very mature LTD program, which shows how significant the difference between LTDs and OTDs might be.
In this later stage campaign, 65% of the budget is spent on LTDs bringing 93% of the sales leaving some room for testing and contents creators renewal.
Though cost per views do not show big difference, the CAC is 6x lower on LTDs than on OTDs.
Summary & Key Insights
Initially the campaign requires a testing period to find the top performing content creators. LTDs budget is lower than 15% and budget allocation is not efficient at this point.
After the testing period, a portfolio of LTDs is built at ~30% budget allocation. This ensures the possibility to scale up and consolidate performance in time.
On stages 2 and 3 remaining budget for OTDs allows testing and exploration of different content creators with a minimum impact on the KPIs.
LTDs should always bring more purchasing/revenue volume and acquisition price (CAC) as this is a proven pool of top-performing channels.
At later stages, budget can increase significantly with very low risk of negative impact on CAC. We recommend managing the campaign with a high rate of LTDs vs OTDs, while leaving budget to find new great channels.
