Smart Investor Malaysia


Under the Influence of Social Media Influencers


You can't go anywhere these days without hearing about influencer marketing, but what is it, really?

By Bernie Yeo

Do you know of a life without social media? Better still, do you remember a life when there was no Facebook, Instagram, Twitter, WhatsApp, Snapchat and TikTok?

Social media has grown to become one of the most dynamic developments in digital media over the past two decades. With billions of users worldwide, social media is now a huge aspect of modern society and has a tremendous impact on our culture, on business, and the world at large.

Digital 2020, a collection of reports on digital trends and social media uses, reveals that as at January 2020, there are 3.80 billion active social media users in the world against a total population of 7.75 billion.

Understanding the modern consumer

There was a time when it was not possible to share your opinions about a specific product with others because there simply was no available outlet, and there was no way of reviewing a product or service except with a few family members, close friends and coworkers.

Consumers today enjoy a very different situation, all thanks to social media. Through platforms like Facebook, Instagram and Twitter, consumers have been able to easily convey their opinions about various brands. 

In other words, there is now an opportunity for consumers and brands to build a working relationship in which opinions can be voiced and views exchanged. 

“The modern consumers want to interact and engage more with brands. Consumers want to speak with brands, and not be spoken to,” opines Karen Ong, Luxasia Group regional managing director (Singapore, Malaysia, Thailand and Vietnam) & country manager (Singapore). 

So for brands to be successful, it has to be a two-way communication between them and their consumers as this is how the latter prefers to communicate – they go directly to the brands to express their preference. 

Luxasia is the leading omnichannel partner for more than 140 luxury beauty and lifestyle brands including Bvlgari, Hermès and Prada.

The growth of influencer marketing

The use of influencer marketing has grown rapidly as consumers are already using social media platforms to follow influencers who create content according to a certain category or theme. 

What is interesting to note is that global ad spend on influencers, according to Business Insider Intelligence, is predicted to reach between US$5 bil and US$10 bil by 2022. But why is this so? 

The reason is simple, say Ong and Luxasia Group country manager (Malaysia) Cindy Poh. “Brands leverage on the trust and relationship these influencers have built with their follower base, who are very likely to be captive audiences and are interested in reading and hearing what these ‘key opinion leaders’ (KOLs) have to say about a brand.” 

They note that influencers create content that adds personalised touches in a way that mass media is unable to replicate. And it is through these personalised contents that the influencer is deemed a credible and authentic source as the content that he/she creates for the brand is aligned to the influencer’s personal brand. 

“A PwC Study in 2018 found that today’s consumers are more responsive to credible, authentic content and opinions from someone they know or trust on social networks, suggesting that opinions and suggestions on social media – posted by friends and strangers alike – have more influence on specific purchase decisions than factors that retailers can control, such as advertising, promotions, and pricing,” they explain. 

One good example of influencer marketing is YouTube celebrity PewDiePie’s collaboration with the makers of a horror movie set in the French catacombs under Paris in conjunction with the upcoming movie As Above, So Below in 2014. 

Renowned for his histrionic reactions to horror movie games, the Swedish YouTube celebrity agreed to undertake the ‘Catacomb Challenges’ where he would give his reactions to a recreated version of the movie’s setting. 

The resulting two-part video series was the perfect content for PewDiePie’s millions of subscribers, and received almost double the views of the movie’s trailer. It was, suffice to say, a win-win situation for everybody.

An influencer’s perspective

An influencer can be anybody from a popular fashion icon on Instagram to an indie wedding singer who blogs to a well-respected political figure who tweets. What makes them influential is their large followings on the web and social media. 

The shift to influencer marketing started about six to eight years ago first on banner ads on a digital medium to blogs (seen as a form of online media) before reaching social media platforms like Facebook, Instagram and Twitter, says local blogger, speaker, columnist and TV host Dr Choo Mei Sze. 

Choo, who holds a PhD in Development Psychology from the University of Hawaii at Manoa, is the Youth Ambassador for the National Cancer Society of Malaysia (NCSM). 

She advocates cancer awareness especially among youths through talks and youth support groups in collaboration with NCSM and has hosted a show called ‘An Awakening’ in collaboration with insurance company Axa Affin Life Bhd which showcases amazing stories of cancer patients, survivors and caretakers. Today, she blogs about her journey with the Big-C, in addition to topics on fashion, beauty and travel. 

“When I first came back from the States about eight years ago, I was surprised that many brands asked to advertise on my blog. At that point of time I was blogging as a way to connect with my friends and family and I didn’t imagine it being a form of advertising,” Choo tells Smart Investor

“These days, influencers are the new ‘word of mouth’ and brands prefer this form of advertisement as it allows them to see exact figures rather than made-up ones like on billboards.”

Getting into the business

But how does a person get into the business of becoming an influencer? 

“With the market being so saturated these days, anyone can be an influencer. Nowadays, an influencer is all about being able to influence enough people through the posts you put up on social media be it in the form of pictures or captions. 

However, I believe that a true influencer is someone who is able to encourage their target audience to purchase a product or share a posting though a shout-out,” Choo opines. 

As for who to collaborate with and the products she recommends on her social media platform, Choo admits she is rather picky. 

“My followers are urban and quite a few of them know their stuff and so, I refrain from endorsing brands that do not suit me and my personality. 

“As the Youth Ambassador of NCSM, a lot of people ‘follow’ me for health and cancer advice as well as for inspiration, and therefore, I will not promote things like cigarettes or alcohol. 

“I am careful when I choose the brands I collaborate with, and I collaborate with companies promoting organic skincare or healthy eats as these are the things that I actually use and practise on a daily basis.” 

This brings us to the next question: how much are influencers paid to post photos of a specific brand’s clothes, watches, jewellery and make-up on their platforms?  

According to SLPR Worldwide Group chief operating officer (Southeast Asia) Leon Tang (pic), remuneration usually comes in the form of an in-kind or a monetary token as a form of appreciation towards the influencer’s efforts. 

“Influencer marketing does not necessarily always involve monetary contributions or sponsored contents. It depends on the brand affinity the influencer has for the brand and whether the promoted products/services bring values to the audience of the particular influencer,” he says. 

As such, he adds, there are numerous cases whereby the influencer finds the brand to be of great value to their audience and are therefore more than happy to share the brand’s products/services at no cost whatsoever. 

In instances like these, the influencer will be offered a product sponsorship as a token of appreciation. 

“The exact value is not fixed and differs from influencer to influencer, although this is usually decided by both the brand and the influencer. 

“There are, however, some influencers who are employed under a specific talent agency and as such, already have a company-set rate card in place. The rates are usually determined based on the number of followers or the engagement rates per post,” explains Tang.

No one-size-fits-all

‘Matching’ a brand to an influencer – and vice versa – is also an important element to be considered when it comes to getting influencers involved in a brand’s campaign. 

Among the factors to be considered include the number of authentic followers, the number of legitimate engagements in a post, demographics of followers, the track record of the influencer, his/her connections to other influencers, budget and the fit between the influencer and the brand in terms of the look, the styling, the ‘feel’ and even the use of linguistics. 

In Luxasia’s case, the process involves getting the right influencer whose profile fits the brand it carries. As simple as this may sound, however, the details involved in the selection of influencers is a complex one. 

“The challenge of a regional beauty business is in local marketing knowledge, effectiveness, and execution. Different markets have different platforms of choice, and hence different ways of doing influencer marketing. 

This is also the very reason why Luxasia has so many local offices – we need to know the market locally and intimately to be effective,” explain Ong and Poh. 

“Before we address influencer selection, we need to be clear about social media platform selection. Instagram is the go-to social media platform for all things that are beauty-related.” 

Weighing in on the onboarding process, SLPR’s Tang adds: “A detailed background check on the influencer will be conducted before initiating a conversation with the influencer. The screening and selection process usually take around seven to 14 working days.” 

This will be followed by a meetup and if they are interested to be part of the campaign, remuneration and collaboration tokens will be discussed, he points out. 

In some Southeast Asian markets like Vietnam, Facebook still reigns, while in Thailand, apps such as LINE can be an effective channel for social-commerce as well. 

Luxasia’s local office in China engages influencers on platforms such as WeChat, Weibo, Douyin, and the beautycentric social shopping platform Little Red Book (Xiaohongshu). 

“As such, there is really no one-size-fits-all. We need to identify the effective platform for the local market, followed by the influencers to engage. Furthermore, we need to determine the nature of the campaign – image-centric or video posts of ‘live’ KOLstreaming. 

For some brands, it may also be more relevant to engage 30 micro-influencers as opposed to five macro influencers,” say Ong and Poh.

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