September 10, 2019

The following is republished with the permission of the Association of National Advertisers. Find this and similar articles on ANA Newsstand.

By Anne Field

Marketers can reap big payoffs by tapping social media influencers, of course. But using them isn't cheap. Brands can expect to pay influencers $1,000 per 100,000 followers on Instagram and upwards of $200,000 for a celebrity who has more than 100 million followers. Plus, the field is noisy and cluttered: Social media platforms like Instagram are teeming with both bigger and lesser-known celebrities paid by brands to promote products.

That's why an increasing number of marketers are turning to nano influencers, or nanos for short.

While definitions vary, this new social media category generally includes people with 1,000 to 5,000 followers, typically on Instagram. They are also paid bargain-basement rates, oftentimes receiving just a free product or access to an event, while driving extraordinarily high engagement rates.

"Generally, nanos have a more nurtured and actively engaged following than the bigger influencers," says Dan Seavers, content marketing officer at Talkwalker, a social media analytics platform.

Nanos are the latest evolution in the social media influencer market. As it has matured over the past decade or so, the universe has fragmented into more-nuanced tiers. Now, according to many definitions, there are four levels, aside from nanos, each determined by the number of followers: micros have 5,000 to 75,000, mid-tiers reach 75,000 to 300,000, megas boast 300,000 to 750,000, and A-list celebrities like Beyoncé reach well into the millions.

Just Folks

Certainly, engagement rates are higher than those found among other influencer levels. A recent study by influencer marketing agency HelloSociety found that nanos attract an engagement rate that's six times higher than top-tier influencers.

Nanos provide outreach at a grassroots level, and for a fraction of the cost of other influencers.

Plus, many marketers believe that nanos have a better connection with their target consumers, according to Pamela Kaupinen, SVP of strategy at HelloSociety. "A lot of them have deeper and more personal relationships with their followers," she says.

It's their noncelebrity status that makes this group attractive. Nanos provide outreach at a grassroots level, and for a fraction of the cost of other influencers. These are normal, everyday people who happen to have more followers than the average person, many of them friends or friends of friends. Plus, they provide the sought-after genuineness that brands crave. "People are trying to use influencers in the most authentic way possible," says Vic Drabicky, founder and CEO of digital agency and in-house consultancy January Digital. To underscore the point, rather than referring to nanos' followers as an audience, he prefers to describe them as "a group of people who really trust that individual."

When and How to Use Nanos

Marketers say that nanos are especially effective for brands focusing on a particular niche, such as beauty or health, or a specific geographic area. "A great time to work with nanos is when you're trying to reach targeted audiences," says Mae Karwowski, CEO at Obviously, a full-service influencer marketing agency and tech platform with a specialty in nanos. "A nationwide brand opening a new store in Dallas would do better working with 50 nano influencers who live there than a Kim Kardashian who only has a small portion of followers in that city."

Nanos are also useful for smaller companies with a limited budget. Recently, after startup Loco Coffee introduced its new beverage, a cold-brew coffee with coconut water, its co-founders were looking for a cost-effective promotion strategy. They decided to focus on nanos in their targeted demographic of fitness-oriented 18- to 24-year-olds. "We wanted to create a user-generated marketing plan," says Sean Schiloski, a co-founder of Loco Coffee. An outside agency in the midst of developing a nano platform offered to work at no cost and found 20 influencers, all of whom were delighted to receive a free product and post about it. The engagement rate was 9.4 percent compared to the normal influencer rate of 2.8 percent, according to Schiloski.

Because individual nanos' followings are small, however, brands have to work with a lot of them to reach a sizable population. The agency Obviously, for example, uses on average 50 to 300 per campaign. What's more, followers are likely to become alienated if a nano posts too frequently. At DiversyFund, a platform that gives unaccredited investors access to alternative investments, marketers typically put nanos on hold for one or two campaigns after they post before using them again. "We don't want to be always in front of the same people and getting on their nerves," says Hortense Soulier, senior marketing manager at DiversyFund.

It all means that finding, qualifying, and keeping track of all those nanos is tricky. One way to locate good ones is to use those who have already worked with other brands, although previous experience is by no means a requirement. Another option is to pinpoint top customers with the appropriate number of followers. In addition, after an initial campaign launch, potential nanos frequently reach out directly to brands and agencies.

Also, a growing number of digital media agencies are racing to offer their own proprietary platforms with which they can identify, contact, and manage nanos. About four years ago, five-year-old Obviously built its curated platform which now has, according to Karwowski, "a community of thousands" of nanos in a variety of niches, from automotive to personal care. After contacting and choosing the right influencers, most of whom are thrilled by the opportunity, according to Karwowski, the agency then gives each influencer a creative brief describing the type of content, sends them the appropriate products, and tracks performance.

A Loose Leash

In some cases, brands provide suggested text and hashtags and a timeline for posting. Others keep their nanos on a looser leash. Consider a recent campaign by Dunkin' for a new espresso beverage. While the brand provided hashtags, influencers were allowed to create their own, personalized messages, according to Talkwalkers' Seavers. A nano named Vanessa, with the fewest followers in the Dunkin' campaign, experienced outsized results — all from a single post: With 732 likes and 63 comments, she achieved an engagement rate of 26.1 percent, a performance more than five times the campaign average. One cardinal rule, however, according to Karwowski: Direct nanos to post only if they genuinely like the product.

The hands-off approach has another benefit. Nanos often devise unexpected content that wouldn't have occurred to the brand. Some marketers leverage such posts by using the material in other venues. Tea startup Hojicha Co. generally works with 20 to 25 nanos at a time, initially discussing their concept and then stepping back to let the nanos work. One post from earlier in the year of an influencer's cat inspecting a tea setting was a particular hit. "Our audience really likes cats and dogs," says Hojicha Co. co-founder Francois Mathieu. So Mathieu not only reposted it on the company's social media accounts, but also ran it as a paid ad on Instagram.

While brands sometimes use only nanos, more often they include a mix of other channels, as well as influencer categories able to reach different types of followers.

In fact, the nano world is still a work in progress. "Everyone's testing it and trying to figure it out," says Drabicky. "Nothing is standardized yet." It's good to start small.



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