Oh, how times have changed. Compared to just a few years ago when brands were not interested in investing in influencer marketing as a conversion channel, now influencer marketing has become an integral part of many brands' marketing strategies. Laura Donadio, the General Manager at THG, has seen firsthand the impact of influencer marketing on its revenue - a whopping 16% of its group revenue is driven by influencer sales.
About THG:
THG is a company with multiple divisions and a diverse range of offerings. They own several brands, including MyProtein and CultBeauty, and provide various services to their clients. One of their external solutions is Ingenuity, a tech stack that allows customers to host their websites while also offering fulfillment and warehouse services.
In addition, THG has developed an internal influencer platform called THG Society. This platform has enabled them to collaborate with approximately 50,000 influencers across 26 markets worldwide, serving clients such as Nestlé, Charlotte Tilbury, LMS, and Harrods.
Challenges:
COVID may be over, but its impact on businesses lingers. Laura conveyed how marketing budgets are being cut, with companies treading carefully when it comes to investing in brand-building initiatives. However, this apprehension may be shortsighted. Influencer marketing is not a quick fix; it requires time to experiment, find the right approach, and establish a niche. Brands should expect to invest for 6 to 12 months before seeing a significant return on investment. So, if you're a brand hoping to dip your toes in the water for just a month or three, you might want to reconsider your expectations.
To overcome this challenge, THG uses case studies from their brands to demonstrate the effectiveness of influencer marketing. They are a unique case where they have their brands, where they have tested their influencer marketing strategies, so they have the data that they use to prove their case. Testing solutions internally first and sharing successful strategies with their clients, allows them to use these successful tactics to achieve the best results possible.
Obstacles and Strategies:
There are two main obstacles THG faces as it continues to grow. Finding the right talent is the first. To counter this they focus on building a team that can grow and scale in tandem with the business rather than hiring new people on board. Second, cannibalizing revenue when working with brands within the same industry. For example, THG owns both Cultbeauty and Lookfantastic, which operate within the beauty industry. To prevent overlap, they have a content calendar to ensure that the content (especially with the same influencers) is spaced out and strategies are carefully planned across the board.
The Role of AI:
AI has been a hot topic in our recent blog posts (if you haven't already, take a look at our interview with Mike Craddock). As we've emphasized before, if your company isn't leveraging AI, you're likely falling behind the curve. THG, however, is not one to lag. They've been quick to embrace AI, but they're also keenly aware of the crucial role human touch plays. While THG harnesses AI to boost efficiency in areas like content writing and coding, they ensure that human involvement remains at the forefront. This is especially critical in aspects such as content creation, where the influencer's unique personality must shine through to truly connect with the audience and drive engagement.
Influencer Marketing Regulations:
As a company with a significant influencer marketing presence, THG has faced scrutiny around taxes and processes related to influencers. However, they operate transparently and believe that there should be a revenue threshold in place to provide some leniency for those who engage in influencer marketing as a side hustle rather than a full-time job. THG is supportive of regulations but cautions against overly strict measures that could hinder the industry.
Because of the immense influencer activity that THG has (around 8000 influencers a month), they have faced scrutiny around taxes and processes related to influencers in the past year. Thus, they operate by the book and are completely transparent in their processes.
While Laura is supportive of the regulations, she is also cautious against overly strict measures that could hinder the industry. She believes that being an influencer is just like any other profession and should be subject to a threshold. However, it also needs to be acknowledged that there are individuals who use content creation as a side hustle rather than a full-time job, and there should be some leniency (like a revenue threshold) for those in this situation. Laura also commends the EU for being more considerate in its regulations to safeguard consumers. Take France, for example, where influencers are required to disclose the use of filters. This measure aims to address the unrealistic expectations placed on young people by social media, which can have detrimental effects on their mental well-being and body image.
The Holistic View of Influencer Marketing:
Brands need to have a holistic approach when considering influencer marketing. Influencer marketing may not be for your brand at this point. It depends on your own goals and the maturity of your brand in the market. The full consumer journey is another important aspect, looking from impressions to click-throughs and beyond, rather than isolating a single metric as the sole indicator of success.
Conclusion:
The message that Laura wants to tell the industry is: “Influencer marketing is a powerful tool that should not be underestimated.” It can drive revenue, improve SEO rankings, enhance paid social ads, and even help with newsletter signups and CRM content. By taking a holistic approach and considering the full impact of influencer marketing, brands can harness its potential to achieve their marketing goals.
Watch the full interview here on YouTube, or listen to it on Spotify.
