Conde Nast – Keller Fay Study Puts a Price on Influencers
by Ed Keller, November 24, 2010Tags: ARF, Brands, Ed Keller, Influencers, Keller Fay Group, research, Social media, WOM, Women, word of mouth
Last week, UM’s Graeme Hutton posted a blog piece in which he posed the question, “Do Influencers Really Matter?”
By analyzing the relationship between influencers and general consumers Hutton concludes the answer to his question is “yes”; and he says “if a brand is to maximize its conversation potential, it’s not enough to focus simply on creating the conversation with consumers, a parallel communications strategy should often be embraced for influencers.” He suggests ways brands and their agencies can plan and execute strategies to nurture influencers. (Disclosure: UM is a Keller Fay client and uses TalkTrack® as the data source for its analysis.)
I have written before about three primary reasons that influencers matter to marketers:
Influencers talk far more about brands than the average consumer, thereby generating reach, which makes marketing more efficient and effective.
Influencers accelerate product adoption and improve profitability.
Influencers amplify advertising messages via word of mouth; conversations that are more likely to include active brand advocacy.
But a pervasive question remains: Do influencers truly have more sway when they talk? When influencers talk, do people listen and act? And when all is said and done, do they have more economic impact – i.e., social value?
To tackle these important but heretofore unanswered questions, Keller Fay was commissioned by Conde Nast to undertake research with an innovative design twist. We interviewed a large national sample of women magazine readers about recent word of mouth conversations across several product categories. We also interviewed a sample of the people with whom they had these conversations (i.e., their conversational partners). Through this methodology, we were able to close the conversational circle and learn not only what was said and by whom, but also what impact it had on the person listening and what actions they took as a result of the conversation.
In our study we analyzed the conversations of influencers (and the people with whom they spoke) versus all magazine readers (and the people to whom they spoke) to see whether the word of mouth impact of influencers was greater and if so, how much greater.
Working with Dr. Barak Libai, a noted academic who specializes in the social value of word of mouth marketing, we built an economic model that factors into consideration four key elements that can drive value – the amount of conversation, the persuasiveness of that conversation, the profitability that comes as a result of the conversation, and the role that magazines play in sparking conversation (either via advertising or editorial content). In each case, we analyzed the relationship between the responses from influencers and their conversational partners, versus others and their conversational partners.
The result? Influencer word of mouth is a substantial 3.8 times as valuable as word of mouth from magazine readers as a whole. In other words, if average readers drive $100 of value for a brand marketer when they talk to friends, family or colleagues at work, influential readers drive nearly $400 of value.
The results of this groundbreaking research were first presented earlier this year by Conde Nast and Keller Fay at the ARF’s 2010 ReThink Conference. The research will be presented again on December 8th at an ARF Thought Leader Session on Emerging Research Methods. We will talk more about how we conducted our research, built the model, and implications. If you wish to attend, feel free to contact me. I hope to see you there.
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