What are the similarities in influencer marketing and portfolio management?
Our team works with fintech companies and many of our members have demat accounts. We couldn’t resist marrying the two and still being able to find useful things.
A typical equity portfolio that is long-only would have several stocks at a given price. After doing due diligence on many parameters, such as the intrinsic cost, market value, expected growth rate, perceived safety, and estimated growth rate, you would buy the stock. You will then gradually build your positions and increase your confidence, adding more money to the portfolio.
You will see that nearly all the books on trading speak highly about your position sizing. This means that you can’t allocate more than a certain percentage of your budget for one stock, and that you must ensure sufficient diversification within the portfolio.
Now that we have gotten past the jargon about portfolio management, let’s get to the point. What does this have to do with managing influencer campaigns? Similar to portfolio management, you choose your Influencers and set a budget. This is based on brand objectives and what other brands are paying for similar services. After you have selected the influencer, you need to work on the operational tasks like how the communication should be done and how brand integration should look. It’s very similar to tracking the stocks in your portfolio. Once you have executed a campaign with the influencer, you can look at ROAS. This is similar to monitoring the quarterly and annual stock returns. You can double down if the results are positive. In the case of influencer marketing campaigns, if you are pleased with your results, you can extend your contract.
Similar to your equity portfolio you will need multiple influencers. They should come from different categories or genres and be chosen at a reasonable % of your budget. Changing this allocation can skew your results and lead to incorrect signals.
What happens if there is only one influencer to help you with a campaign? You may be able to get amazing results, which is what happens all the time. However, there are limited followers that an influencer can gain in a short time span. This means you could end up repeating the same message to the same audience. Your incremental ROI won’t increase. If your campaign was successful, you’ll get additional analytics that will give you additional data and possibly experimental budgets. You can add more influencers to your campaign to expand your reach and repeat the process.
What happens if your campaign doesn’t work out the way you planned? This happens quite often, and it is not uncommon for campaigns worldwide. Similar to portfolio allocation, you need to understand Stop loss. A threshold must be set for expected performance. If this fails, you can reduce the influencer’s weight and assign it to someone who is performing well.
Here’s a summary of the lessons that you can learn from your portfolio management campaigns regarding influencer marketing.
- You can set a selection criteria. This could be category, cost per viewer, average video views, and so forth.
- Don’t put all your eggs in one basket. Have a double-digit influencer count that you can use to manage your campaign.
- Do not spend too much on one influencer. We recommend spending no more than 15% of your campaign budget for one influencer.
- Take a look at the campaign’s overall outcome and not just on winners. If there are a few winners but a lot of losers, you can learn a lot about your content integration, selections and other aspects. These lessons can be used to build the next campaign.
- You should have a hypothesis and an expectation. What are you expecting from these campaigns? And over what timeframe. This is even more important. This is more important than ever.
- You should wait for a reasonable price – Don’t be tempted to hire a celebrity influencer if it doesn’t fit your needs. Instead, find multiple micro influencers at an affordable price.
Sounds simple, doesn’t it? We are happy to discuss this further with and discuss portfolio construction for Influencers campaign.