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- How Depop utilized influencers to grow [02:07]
- How to measure the results of using influencer marketing [04:14]
- How to operationalize the influencer process [06:25]
- Engagement percentages that matter [07:44]
- Economics behind influencers [09:11]
- The best influencers to utilize [12:46]
- Strategic approach to influencer marketing [16:50]
- The art of the cold outreach [18:23]
- Why influencer marketplaces aren't effective [22:03]
Eduardo: [00:00:00] I think it really depends on what the company wants, right? Like if you want to do influencer marketing, because you think it's like a trend and you want people to know that you're doing influencer marketing and you want to be associated with the most famous people that have the largest amount of followers, like then just do that, right?
Like then it doesn't matter who you partner with because all you want is. To be associated with them. Not necessarily. Who's going to give you the optimal return on your investment, but if you're a company that really has slow budgets and really wants to use influencer marketing to grow, then you do have to do a much more specific and strategic approach to it.
Max: [00:00:38] What's up, everybody. Welcome to the Growth Collective Podcast. I'm your host Max Ade. Today on the show, we have a Eduardo Morales an influencer market getting expert. Now this is a topic that's been coming up a lot recently, especially with the rise and TikTok. And the Eduardo is the perfect person to talk to about this.
He previously scaled a startup called Depop by systematically recruiting the top influencers. I learned a ton from this conversation and I think you're really going to love it. Let's dive in.
Eduardo welcome to the show.
Eduardo: [00:01:19] Thanks Max. So happy to be here. Thanks for having me.
Max: [00:01:23] So let's just jump right into it. I was ecstatic when you joined the network because I've had so many conversations over the last few months about influencer marketing and we never had an awesome influencer marketer to send people to.
So, that's kind of the topic for today. I'd love to hear a little bit about how you got into this, how you got interested in influencer marketing.
Eduardo: [00:01:51] Sure. Well, well, first of all, I want to say that I'm also really happy to be here. Cause it's been a while since I got to just nerd out about influencer marketing, it's all just in my head and there's no one who's actually interested in hearing all of it.
So I'm just happy to be able to talk about it for a few minutes.
Max: [00:02:07] Love it.
Eduardo: [00:02:07] Well it all started when I started working at this startup called Depop around seven, six years ago. Depop if you don't know Depop, it's kind of like eBay meets Instagram. So the App looks like the layout is almost exactly like Instagram, but it has a buy button and it's, it's used mostly by like kids in high school.
You know, kids in college to buy and sell second half coats. But. In comparison to eBay or Etsy or any of these other ones, it's very visual. So it's all about how you curate your profile and the photos that you take and the style that you have, to kind of like, yeah, very much like the very internet people who are loved the internet kid, young kids who love being online, like to use Depop to buy and sell clothes.
Max: [00:02:57] I could see the connection here between, I could see where you're going. It sounds like the perfect candidate for an influencer marketing campaign.
Eduardo: [00:03:05] It was, we didn't know it was, but, well maybe also the way that it is now was because of that. So it's kind of like the chicken or the egg thing, but
Max: [00:03:13] Right.
Eduardo: [00:03:14] Well basically, well, what happened was, we Depot's already relatively successful in Europe. They were trying to move to America. The team was really small at the time. It was like two or three people and they were looking for a community manager and it was that sort of situation where we're all trying to just figure out how to grow the app as fast as possible with as little as possible.
And we started testing everything from like events to digital marketing, to paying like big celebrities to doing influencers on Instagram and YouTube. But what we were really obsessive over was just trying to understand the results that each of these, events or projects had. But we were lucky that, most of them are easy to measure, but actually influencer marketing was because in the app.
Max: [00:04:05] Wow. That's really surprising when you think about it, right? Like it's, it's sad. It sounds ironic to me because so many people have a hard time measuring that.
Eduardo: [00:04:14] Yeah, but I think we were lucky because we could search, we could see what people were searching on the app. And usually whenever, let's say a YouTuber talked about the app, we would see that YouTuber's username search terms go up.
And I don't think many companies have that sort of ability. So we started becoming really obsessive over, trying to understand, How to select influencers. So first, first level we figured out influencer marketing was the one that was the most, it provided the biggest return, right? And then once we started swimming in, on influencer marketing, we wanted to really focus on, on trying to pick the right one, because we, when we started doing an appointment influencer marketing, we realized that there was so many influencers and many of them have really high prices.
It was really hard to find a lot of them. We didn't know who was effective or not. It was just kind of like shooting in the dark. So we tried to understand who we should pick, right? Like, can we predict who we should focus our resources on to get the highest results possible, long story short after literally like.
Six months to a year of like every day reaching out to 20-30 people measuring, doing massive like spreadsheets and all types of things. we ended up getting to a place where we could relatively easily predict who was going to drive traffic.
Max: [00:05:45] Yeah. This is pretty, pretty amazing. And what I love about it is not only did you identify a channel, but then you operationalized it, it sounds like, right. It sounds like by the end, you guys had a process where you're reaching out to 20 or 30 people and you had a whole system behind it. And I think that's the goal for every, everybody on every marketing channel is to get to that point something that's repeatable and scalable.
So can you tell us just a little more about that process of, I guess, putting together the process and like figuring out how to operationalize that, that outreach.
Eduardo: [00:06:25] For sure. So I think the first part was okay. Trying to identify who were the people we needed to put through that funnel and.
The one thing that we realized mattered the most was the level of attachment or love you could say that the audience had with the creator, so to a degree it really didn't matter what the creator did. What mattered was, how much people cared about what that person said so if the creator was, it could be someone who talked about shoes or someone who talked about marketing, it didn't matter.
But because when they. Because their audience loves them when they said, Oh, I love this. Then their audience would go check it out. No matter kind of like the category that it was.
Max: [00:07:11] So how did you measure that? How did you measure the connection between the creator and the audience?
Eduardo: [00:07:20] Well, you could get really deep, but the metric that would probably get 80% of the results would be just engagement.
Right? How many likes and comments someone gets based on the total number of followers they had.
Max: [00:07:37] So that ratio less than just the number of followers actually looking at engagement over followers, basically.
Eduardo: [00:07:44] Yeah. And, and we noticed that there was a tipping point, right? Like people had, it was only after 10% engagement that it actually kicked in.
So you could have. Five in 5% engagement or 7% engagement. And it actually didn't matter that much between one or seven, not that big of a difference, but once you hit 10, the results started coming in. And 20 was like, that was kinda like the sweet spot, but it was also very, very hard to find people who had 20% of engagement.
Max: [00:08:12] Wow. That's incredible. That. That, that that's like one of those famous marketing examples, right? Like Facebook's, Oh, if you get seven friends and that means you're going to stick around forever, it's like, if you get this ratio of 20 engagements to over followers, then boom, you're crushing it. It's really awesome.
Eduardo: [00:08:33] Yeah. Yeah. It was, it was surprising to see that it was relatively a good prediction because. Everything before it's like, Oh, influencer marketing. So hard to measure. And we realized, Oh, well, it wasn't perfect. Of course, but it was relatively decent.
Max: [00:08:49] So were you paying these people or can you talk a little bit about the, the economics behind this?
And a lot of folks asked me, you know, how do I go about reaching out to these folks? How do I structure deals with them? Do I just send them free stuff? Do I. Pay them a bunch of money. How do I know if it's worth it? Can you speak a little bit to that
Eduardo: [00:09:11] For sure. So for us, we tried to get as many people as possible to not have to pay them.
And it really helped that within that group of people on the internet, Depop was considered kind of relatively cool. So people were relatively open to trying it out. I think the, the less, I guess the less people on the internet perceive your product to be cool or valuable or whatever that, or it is the more people are going to want to be paid.
But when it comes to paying, we had our, I forget the name of the board of the metric, but it was like our user's lifetime value. Right. So how much our user was going to be worth in the lifetime that they were going to be on the app.
Max: [00:09:57] So your app though, you guys were giving the creator a cut of the sales, right? Or was there, or no, there was no financial gain for them at all. They were just using it.
Eduardo: [00:10:10] Well, once they got into the app, whatever they made was their money. We took a cut from all sales on the platform.
Max: [00:10:19] Oh, okay. Yeah. That makes sense. That makes sense. Yeah. So I guess it, I guess it'll just depend just thinking about some of the people listening to this, I guess it'll depend what they have to offer to the creators.
It sounds like, you all offer them a way to monetize their audience in a really cool new way. And so you didn't have to pay them. well, what was your conversion rate on that kind of outreach with, do you get a lot of folks coming through.
Eduardo: [00:10:46] But we did have to pay some, like for the people that talk to your people who have like big YouTube channels and all that, like most of them we did have to pay.
And it was like structured deals with lawyers and agents and all of that stuff. but because we had really relatively good data, let's say, like, we knew that someone had a hundred thousand followers and we could relativity predict like, okay, they'll probably bring in 10,000 of those or 5,000 of those.
I would. Would we be able to get 5,000 downloads in another way, the cheaper way. And if not, then we would invest. Right.
Max: [00:11:24] This is really something that I've thought a lot about. do you consider influencer marketing a form of paid?
Eduardo: [00:11:34] Definitely. Definitely. Although I've never done much paid, so I don't know the intricacies of that, but, but you can't treat it like, at least from the example that I explained to you, like, is that paid, you know?
And we would also, like there would be a bracket of people that would, we would give a discount to, like, we wouldn't charge a fee whenever they sold something. Right. Like, so we were still paying, but. We're definitely doing the math on whether or not it was an investment that was going to be beneficial to us.
Max: [00:12:06] Yeah. I remember back in the day as influencer marketing was starting to get pretty popular, working with some gaming companies who were going after this as a channel and they were running a lot of paid as well. And, They there started, there was this period of sort of like reckless influencer spend blank checks.
Right. And then very quickly, it seemed like that inventory caught up to the market rate that they were already paying on the page channels. Is there any, any tips to, or any segments of influencers that you think are a particularly good value?
Eduardo: [00:12:46] Definitely. I think, I think YouTube burgers, I think, or in general, people who have a one-to-one connection with the audience.
So for example, like influences who aren't necessarily categorized as like fashion or gaming or anything, but. The people that follow them, follow them because exactly of who they are, you know, like there's no substitute product for that. Those are the influencers that tend to have the highest results in comparison to people who are like, I talk about this particular topic.
Max: [00:13:16] Yeah. Do you have any examples that come to mind when you think about someone that fits that?
Eduardo: [00:13:22] Oh my God, there's one that I'll never forget. This now very, very, very popular YouTuber called Emma Chamberlain. I don't know if you've heard of her massive she's massive, massive, massive massive. But basically just because of who she is, like, there's no like the people who love her, love her for her.
There's no where else, where they can get her. But funny story relates to this. So after being. Working, a couple of years, with the Depop team and learning, literally everything that I know through the whole process, I became slightly obsessed with this kind of like topic of trying to predict value to be driven by influencers.
So a buddy of mine and I, we started working on this after I left Depop. I wanted to leave Depop to work on this exclusively and, And we started doing big scrapes, like massive scrapes on Instagram to try and find, cause we figured out, let's say this, think about Instagram as a coffee cup. And the only people who made, who were worthwhile investing were like the cream, right?
Max: [00:14:27] Yes.
Eduardo: [00:14:28] But we could only find the cream if we had, if we knew the cup. and these, and these were the days before, Oh, what's the name of that big company that kind of like did all of this. Facebook's great big. And it was the whole,
Max: [00:14:40] Oh, with the election Cambridge Analytica.
Eduardo: [00:14:43] So it was before Cambridge Analytica and it wasn't too bad to be doing this.
but we were great. Like we knew exactly who we want to find. We thought we were going to be the most valuable people on Instagram and they were the ones who were, between five and 15,000 followers, but had engagement rates of 30% some, even 40%, because if, if we were able to identify them at that point, we would probably get them at the cheapest rate because no one had found them yet.
Right. And we would likely be a brand that they would love because we were one of the first people who would be in touch with them and offer them something. Because, but because we knew that they had really high longterm value and most people, even the influencers at that time didn't know that. Right. But we knew based on their metrics that they would have really high long-term value.
Max: [00:15:32] Yeah, that seems to be a big part of it. Right? It's as soon as the influencers get big enough and they're in the game long enough, they hire an agent, they join us syndicate of other influencers. And pretty soon they are it's it's premium dollar to, to hire these folks. so that, so then I guess that begs the question.
Do you then have to go out and find. Thousands of smaller up and coming folks. Is that the move in most cases, when you're doing influencer marketing?
Eduardo: [00:16:06] Well, you and I were talking about this a bit earlier. I think it really depends on what the company wants, right? Like if you want to do influencer marketing, because you think it's like a trend and you want people to know that you're doing influencer marketing and you want to be associated with the most famous people that have the largest amount of followers, like.
Then just do that, right? Like then it doesn't matter who you partner with because all you want is to be associated with them. Not necessarily to measure who is the optimal was going to give you the optimal return on your investment. but if you're a company that really has slow budgets and really wants to use influencer marketing to grow, then you do have to do a much more.
Specific and, strategic approach to it.
Max: [00:16:50] And so you were reaching out to 20 or 30 of these folks every day. was how did, how did you get into that rhythm? Was there like a, were you scraping to kind of fill the top of the funnel and then using some different variables and stuff to prioritize that list?
And did you actually manually. reach out to every single one of these people, or did you find ways to automate or outsource those things?
Eduardo: [00:17:18] Yeah, exactly. How you said that first we were scraping it mixed with scraping and manual, to trying to find just a lot of people that we think would be valuable.
Then we did start automating the process of reaching out with a Google. I forget it's a Google GMS. We would use the, we were just input the name. but we did that to a place like we did AB testing before, when it came to the sort of messages we would send. So we did like a classic marketing one and then more like a casual one and then like an Instagram DM version of one.
And we just measured, which ones gave us the highest, response rates. And then we automated it. Quick note on this one. Like I think people, and especially young people on the internet, like immediately, just the way you say hi and like the first few sentences of an email or a message they'll know if you're a marketer and that will like raise the antennas and be like, okay, if you want to do anything with me, you gotta pay me.
And you know, like, so it's really important to develop a voice that people can connect with. And it's just not like a. Standard. Like I'm a company sort of voice, you know,
Max: [00:18:23] so true. There's an art to cold outreach, whether it's B2B or influencer or SEO, backlinks, or PR media outreach, there really is an art to it.
And people hate to be sold to, they hate to feel like you're saying they know you're selling to them no matter what, but they hate it. Really feel like they're, they're falling for a used car salesman pitch.
Eduardo: [00:18:46] Definitely. And that's something too. That's very important. I think with influencers, like people know that they're worth that they're valuable that their audience is valuable and usually companies that are straight up and be like, we want to partner with you and we're willing to pay you. Let us know what your rates are. Like. I think people are much more open to starting that discussion when it comes to influencers because. They see that the company values what they do, and they don't want to get them into the three email chain where they want to get them to do it for free in exchange for like a small discount, like all that stuff, you know?
Max: [00:19:22] Yeah. It's true. Okay. So you, so your recommendation then is when you're doing this outreach is to be upfront about the fact that you're going to pay them or there's some benefit for them. I, it sounds like you were lucky enough to have another benefit on your platform. So just to kind of wrap this up, what are some of the top mistakes that you see people making with influencer marketing?
Eduardo: [00:19:47] Well, I think, yeah, one of the main ones is that a lot of companies that I've seen, I think that when they do influencer marketing, they need to do them within their category. So let's say you're a gaming company. You have to partner with gamers, or if you're a fashion company, you have to partner partner with fashion influencers.
And again, usually those sort of influencers don't have as much value because their content is based on one particular niche, instead of themselves. So what I would recommend is focus on people who, the people who follow them, love them because of who they are, not because of a particular thing that they do.
So that's one that I've seen happen a lot.
Max: [00:20:26] That is super interesting. Cause that, that is that I think goes against what most people would think. And until this conversation, I didn't think that way about this. Right. I thought if you were an apparel company, you should partner with fashion folks. but I really like this insight of, it's about the connection between.
That person and their followers. And, and it kind of makes sense. The more I think about it, if, if you were a really, popular influencer and you say I'm playing this new mobile game, it doesn't really matter whether or not you're a gamer. Like if you connect with your audience, in fact, it might even sound more natural because you're talking about your life.
And the things you like to do instead of, you know, peddling a product in your industry.
Eduardo: [00:21:16] That's exactly it. And that's, that's, that's why it is effective because it, it feels more natural. Like, let's say a fashion influencer, someone that people, the people love. Right. And they say, Oh, look at, check out these brand new sunglasses that I got like that first time that they say, check out these new sunglasses that I got, they're going to maximize.
The return that the sunglass category within their channel is going to get. So like every other additional mention of sunglasses is going to have diminishing returns on that for that company.
Max: [00:21:48] Wow. This is super interesting changes the way that I think about this, any last thoughts or, or tips for folks who are considering this as a channel?
I think it's something that a lot of people haven't tried.
Eduardo: [00:22:03] Well, I think first off, I'd recommend getting super clear on what people want from an influencer marketing. You know, what they want from influencer marketing. If they, if they really want to test it out as a legitimate way to do marketing long-term, then I think it's worthwhile for people to try and get something going in house.
If they think that they just want to use it for brand awareness, it doesn't really matter. What type of results they get, as long as they're partnering with the right people or the people that they consider to be right. Then, then I'd say, just do go talk to agents and, and it's just about money to that point.
So I think that get that first really clear because I think some people, want to get results and go the agent route and others. And the other way around, you know, so, so that's very important. another thing that are that I've noticed is, again, it's super important to try and use data. If you want to be effective.
One, one issue that I've seen on the internet a lot is, and this happened to me. It might not be the case for other companies, but let's say a lot of people try and use marketplaces, influencer marketplaces, and I've noticed that those tend to not produce. As much results, they're easier. but they're hard to get good results on because I think in general, let's see the people, the influencers who go into marketplaces are usually, and this is not for all, but like are usually influencers that don't get enough jobs by themselves.
So the, the pool of people that are already in this marketplace, it's already as a pool of channels that. Are likely not to be that valuable. And if you're only picket from that pool, you're like, it's just not going to get anywhere with that. so it's worthwhile to try and do some of that outreach and research yourself before just relying on influencer communities or marketplaces or agents, because they're not necessarily the most effective, but they do charge a lot.
Max: [00:24:03] That's great advice. And you're available to help people set up these kinds of influencer machines like you did for your last company. That's great. Well, I'm sure we're going to have plenty of folks that are hitting you up for this, after this goes live, so thanks for joining and I'm so stoked to have you in the Growth Collective Network.
Yeah. Maybe they will have me do some influencer marketing for us. I'll use it.
Eduardo: [00:24:32] I've never done. I've never done it for something like you're doing so you can try to experiment.
Max: [00:24:37] We'll figure it out. Thanks for listening to today's episode, just a reminder that you can hire Eduardo right now to create an influencer strategy for your business.
He's one of hundreds of incredible freelance marketers in the Growth Collective Network. So head on over to growthcollective.com and we will hand match you with the marketer who's the perfect fit for your business. Today's episode was edited and produced by my amazing brother-in-law David Reineike and we would be super grateful.
If you could give us a like, or a review in your favorite podcast app, we'll see you next time.