Why do DTC brands prefer micro KOLs?

More and more direct-to-consumer (DTC) brands are building marketing strategies around micro-influencers to create value through their unique word-of-mouth and personal recommendation marketing , according to brand marketers and industry analysts.

Micro-influencers are niche social media influencers with between 1,000 and 10,000 followers who often have a close connection with their audience and can help DTC brands carry out more powerful marketing campaigns.

While the epidemic has promoted the development of DTC e-commerce brands, it has also caused the promotion income of micro-influencers to rise sharply. According to data from influencer company Izea, a sponsorship position that cost only $5 to $10 in 2006 soared to between $1,500 and $1,600 in 2020.

DTC brand Spotlight Oral Care has been working with micro- influencers since its founding in 2016, and according to co-founder Dr. Lisa Creaven, working with micro-influencers has become an important part of the brand's marketing strategy in 2020 as the pandemic has caused people to stay at home for a long time and increase the frequency of mobile phone and social network use.

DTC brands often choose paid partnerships and giveaways in exchange for micro-influencer posts. Spotlight Oral Care did not disclose how much it spent on micro-influencer marketing, but it is certain that this marketing method accounts for 25% of its overall KOL marketing budget.

Creaven said: " We found that micro-influencers can generate higher conversion rates and are suitable for long-term partnerships. " The brand is currently planning to increase the proportion of its budget spent on micro-influencers to 50%.

But working with micro-influencers can also come with its own set of challenges.

Greg Manago, president of Mindshare , said that typically, micro- influencers need to go through a learning curve because they are new to the field and don’t have the support of a larger influencer , but they also need to attract a larger audience for the brands they promote .

However, Manago also believes that these micro-influencers will eventually adapt to new promotion needs and their ability to influence audiences will continue to improve.

Currently, companies engaged in micro-influence marketing include AspireIQ, Upfluence, and Grin. Among them, the Taipei-based startup Influenxio just received a $2 million Series A funding led by DCM Ventures on March 9. Currently, 80% to 90% of the company's customers are small and medium-sized enterprises, and well-known customers include Shiseido, Shopee, iHerb, and KKBox.

Therefore, sellers who want to try micro-influencer marketing also have some relatively mature agencies to choose from. Sellers who are interested in joining can continue to pay attention!

Micro-Influencers

DTC Brands