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Marketing
Influencer Marketing vs. Paid Ads

July 2021

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A strong brand can help e-commerce startups grow substantially faster than just focusing on their product offering alone. A core identity is what gives your target audience a meaningful way to connect with your e-commerce brand. This meaningful engagement is what fosters the kind of loyalty that leads to consistent sales and word-of-mouth referrals. To get to this point, you have to help your target audience discover your brand in the first place. Two of the most commonly used e-commerce advertising tactics are paid ads and influencer marketing. But which one will deliver the highest ROI for your brand? Understanding how to incorporate these marketing strategies will finally assist your e-commerce brand stand out in your industry.

The Power of Influencer Marketing

Digital Marketing Institute reports that the average influencer marketing ad earns $6.50 for each dollar put into the campaign. In niches markets like fashion and beauty, the vast majority of companies integrate influencer marketing into their advertising mix. The high ROI generated from influencer marketing isn’t the only reason for brands to integrate these methods. More people are using ad blockers than ever before. At the same time, many prospective customers go to social media for product recommendations. These influencers outreach is able to offer more trust in product recommendation than any other marketing influence.

When first starting your e-commerce marketing efforts, your best bet is to focus on micro-influencers. These individuals don’t have millions of followers. Instead, they have anywhere from 1,000 to 100,000 followers. While that may seem like too small of an audience, micro-influencers have a few distinct advantages for e-commerce startups. First, they charge much lower rates than larger influencers, as rates for paid partnerships are often based on follower count. In some cases, simply gifting them your product will be all you need to get featured on their account.

Micro-influencers also have the advantage of generally having stronger relationships with their followers. The more niche following means you can find audiences who are more likely to be interested in your products.  As Gil Eyal notes in a CMS Wire interview, “Micro-influencers have stronger relationships than a typical influencer. This is often driven by their perception as an opinion leader for the lifestyle and content they represent. A micro-influencer, as opposed to a celebrity or regular influencer, often has a very uniform audience.” The social proof and brand awareness offered by micro-influencer outreach will increase brands online following, while simultaneously lowering other paid social campaigns.

The Consistency of Paid Ads

Influencer marketing may be an effective marketing option for e-commerce brands, but there is no denying the consistent results from paid ads like social media ads and PPC marketing. For example, Wordlead reports that website visitors who click on PPC ads are 50 percent more likely to make a purchase compared to more organic methods. This is especially true of ads that include buying keywords; such as “best price”, “get”, and “buy.” These ads are geared toward shoppers ready to purchase. Social media ads can fulfill a wide variety of purposes for the message you want your brand to present.

There plenty of practices to enhance your PPC and social media advertising, but paid ads biggest offering is tracking results. Google Ads or Facebook accounts are able to track a wide range of data points for various ads and campaigns. From total number of impressions to the number of people who made a purchase; this data makes it easier to see the relationship between marketing and sales results. This allows you to identify opportunities to fine-tune your marketing to optimize your conversion rate and generate a higher ROI.

Both is Best, But If You Have to Pick Just One…

Let’s get this out of the way right now: in an ideal world, your e-commerce brand will take advantage of both influencer marketing and paid ads. Both can have a powerful influence on your brand-building efforts, and contribute directly to your product sales. They work hand in hand to improve your marketing ROI. That being said, if you have to choose just one in the early phases of your startup, paid ads are the safer option. Paid ads deliver more easily quantifiable returns that you can consistently improve upon for better your brand. When implemented properly, paid ads allow you to generate consistent, predictable sales. In the early stages of your e-commerce startup, this steady growth is crucial for you to turn a profit and generate positive cash flow.

Once you have achieved quality growth through your paid ads, you should have enough cash to be able to give away products or pay micro-influencers. Also, the greatest thing is influencer marketing doesn’t have to be expensive. Working with micro-influencers is extremely cost-effective and can likely begin sooner rather than later. The right influencer partnerships will further strengthen your brand and help you connect with your target audience.

Finding the Right Marketing Mix For Your E-Commerce Brand

At the end of the day, there is no true one size fits all answer for how e-commerce startups should allocate their marketing dollars. Our own experiences lead us to believe that whenever possible, e-commerce brands should use a mix of both paid ads and influencer marketing. However, determining how much of your budget will go to each type of advertising can vary dramatically based on your available funds, your product niche, your desired brand identity, and other factors.  By understanding your brand’s strengths and weaknesses and dialing in on your core identity, you will be better able to develop a messaging strategy that effectively communicates your brand and helps you increase your sales.


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