When investors told a startup owner to carve out 50k+ US dollars from her tight budget for Influencers, her first reaction was shock: It felt “literally like the mafia” said Sahara Lotti, founder of a lash extensions startup, Lashify. Lotti’s reaction may ring true with many small business owners that struggle to make ends meet, and are deterred by the potential expenses of running Instagram influencer campaigns.
Small businesses spent on average only between 1% to 4% of their annual budget on advertising, according to Sageworks data. Consequently, when startups, local businesses or self-employed are struggling to carve out funds for its ‘core’ operations, marketing and advertising on Instagram may seem like an expensive gadget that is ‘nice to have’, but not ‘necessary’.
Yet with a bit of creativity, social media and especially Instagram can help small businesses thrive – even on a tight budget.
Cost driver No. 1: Influencer marketing
Undoubtedly influencers are a new hype on Instagram. Especially in the beauty and lifestyle segment, the league of the hip, stylish and above all, popular, offer to open their shiny feeds and host sponsored content – at a hefty fee. The most common pricing model among influencers is pay-per-follower. Average price for a sponsored post is usually anywhere from $5-$10 per 1000 followers, and most influencers count a six- to seven-digit fanbase – we let you do the math.
As with any hype, it pays off to take a critical look at what influencers really bring to your business. First of all, trust one golden rule of social media marketing: You do not have to create content for everyone.
Consequently, the relevance of an influencer will not (only) be revealed by browsing through its Instagram content, but by looking at who his fanbase really is. Even if you are sure that the followers are legitimate – meaning no automated bots are included – you want to make sure that they are a good fit with your target group. And remember that not all groups like influencers in the first place: A study found that millennials, for example, tend to prefer a more direct brand-to-consumer approach than younger segments that follow influencers.
Second, be realistic about the ROI. Yes, we may have all heard of exciting surveys (say, for every $1.29 spent on beauty influencers, brands are able to generate $11.38 in revenue). But these are averages found in one specific sample, and in one specific segment – nothing is there to guarantee that the same will be true for your company. And ROI is not only about maximizing return, but also about minimizing the investment.
Workaround: Ditch the mainstream and go exclusive
If influencers are key for your marketing mix, a cheaper workaround is to look at micro-influencers. This means seeking out individuals that have a much smaller niche of followers – but are often highly engaged with them. The price tag? According to a recent study from Marketing Technology Insights, more than 80% of micro-influencers charge less than US$ 250 per Instagram post, and almost no one hit more than US$ 500 – a much more reasonable expense for many small businesses.
“The quality of engagement is crucial”, says Joe Carrozza, Instagram marketing expert and co-founder of bidpin. “Especially small businesses fare much better if they focus, meaning properly defining their target groups and creating meaningful engagement with them.”
Smart businesses identify their core group of highly-engaged clients, but don’t stop there: They give them an exclusive treatment with content and campaigns specifically offered to this ‘inner circle’.
This feeling of ‘exclusiveness’ can be created by inviting the most important clients into a closed Facebook group, for example. But also Instagram just launched a new feature called the “close friends circle” , which allows you to create a list of priority followers and share stories only with them.
Cost driver No. 2: Content Creation
Startups and small businesses often feel to lack the time or talent it takes to create professional-looking photographs or videos – yet the costs of sourcing them externally might simply be above budget.
For example, a professional video shot might cost between US$ 5,000 – 10,000, and this would be only a single post fed to your content-hungry Instagram feed. However, while Instagram clearly has its root in sharing beautiful photo images, the app allows you to be much more creative on how to produce content that makes your followers gauge.
Workaround: Gifs, Guerrillas and user-generated content
For startups, it is time to re-frame what Instagram content really is. It does not start with your brand’s look, but with your message – and that message might be told in a variety of cheaper ways than hiring a creative agency and a bunch of expensive photographers.
In fact, you don’t even need a camera for a lot of Instagram content: For example, many brands use quotes or memes that resonate with customers and can be put together in minimal time.
Furthermore, Instagram stories invite everyone to drop the polished content for the fun and engaging: Born to disappear in 24 hours, people expect creativity rather than perfection from your stories. Think Gif’s, stickers and hashtags, combined with a link to your webpage or a different call to action – the Instagram campaign of the day put together at no cost.
While startups don’t have the deep pockets of corporate brands, they have much more liberty to experiment: This is where Guerrilla marketing enters the scene. Elevator floors, zebra crossings or exit signs: Guerrilla marketing often involves the creative use of public spaces to bring across a strong message in unexpected places – the result not only being shared by your company, but also those surprised passers-by who stumble across the content. Not surprisingly, a lot of street art today is signed with an @-Instagram account.
If spraying or gluing provocative messages on tarmac sounds too radical, it might still be worth considering reaping the benefits of linking your message on social channels with a message you have in the real world. For example, local events can be combined with a competition on social media, inviting your followers to submit their own content to your feed. And to make even far-away customers feel like they are part of your local ‘tribe’, Instagram Live offers the possibility to livestream anything from a ‘meet and greet’ with your product team to a Q&A session with the the CEO (which might, in the startup world, all be the same person).
The countdown for 2019 has begun, and while everybody is thinking about their new year’s resolutions, startups and small business owners may be reassessing their marketing strategies. And rather than fretting about expensive Instagram campaigns, brands should stop following the cash – and start to follow the creativity.
Disclosure: This article includes a client of an Espacio portfolio company.