While it may seem quite shocking to many Americans, there was actually a time in the not-too-distant past when it was more than socially acceptable to smoke inside bars and nightclubs. As a result, even if you yourself were a non-smoker, you'd leave a place smelling like you just rolled around in an ash tray.
Although the move to a smokeless environment has surely saved many on dry cleaning bills, the days when your neighborhood bartender had a carton of cigarettes behind the bar reveals something that is decidedly a contemporary phenomenon — the rise and subsequent analysis of "influencer" marketing.
By now, we seem to have a basic understanding of how influencer marketing works. A brand approaches a person who has a certain number of followers on Instagram and gets them to hock a product. And unlike traditional advertising streams like commercials, there's a much more tangible way to gauge how effective the media buy was because a brand can track the number of likes a post got, the influencer's reach, and weigh those factors against any increases/decreases in sales. It's not exactly a chicken and egg thing; moreso, it's can you get enough people invested in the life of a chicken that the egg becomes interesting?
Back when the bar was awash in a grayish, newsprint-esque hue of smoke, Michael Blatter was running the China Club in Chicago. As Blatter tells it, in 1994, Americans had a disdain for corporate culture — particularly alarmed at institutions ranging from Enron to Starbucks. What was perhaps the last segment of culture that seemed to still have a rebellious streak was the nightlife sector. But rather than buying one's way into the space, Blatter wanted to weaponize the bartenders themselves.
"If you needed to bum a smoke, bartenders would always have an ample supply of their own favorite brand, or if you needed a recommendation for a cocktail, bartenders are always ready to tell you what to order,” Blatter says. "They were the natural influencers. They didn't consider themselves influencers, but they had the most influence over the nightlife community."
In the spring, he was approached by someone with connections to tobacco company, RJ Reynolds. This person outlined a plan that was being hatched to open Joe Camel Nightclubs — where the brand would have direct access to consumers. It was at this smoke filled meeting where Blatter made the simple suggestion not to open Joe Camel clubs, but to still utilize that massive amount of investment to support nightlife and the arts.
The puzzled RJ Reynolds executives asked Blatter how that would help their brand get more Camels in the mouths of Marlboro smokers. Blatter thought about for a moment and reasoned, “You could replace all the free Marlboros that bartenders give out with Camels.” He went on to add that by supporting nightlife and giving bartenders free cigarettes, this "trend influence marketing" would install the bartenders as the primary influencers. Influencer marketing was officially born.
Blatter and a partner launched KBA Marketing. In four short years, they grew to hundreds of employees across 30 field offices before being acquired by agency holding company Interpublic Group. According to Blatter, over the next seven years, Reynolds dropped over $100 million into nightlife and influencer marketing.
Th usage of "trend influence marketing" was not simply a one-off idea that only worked in the tobacco space. He sold-in massive programs to both Coca-Cola and Audi — albeit in two different forms that we recognize today as both influencer strategies, and celebrity endorsements.
With Coke, the brand wanted to make inroads in what they defined as the "urban marketplace." In the mid '90s, it was a focal point for both Coca-Cola and Pepsi. But whereas Blatter saw that Pepsi was using "big, audacious, ridiculous, mobile vehicles" that were being brought into African-American neighborhoods, he knew that Coke needed to utilize the community just like Camel had used the bartenders. By using these so-called "community leaders," Blatter had Coke at gatherings that felt organic to the community — despite being paid for by the beverage company.
"There was a phone number that just got passed around the neighbors like, "Yo, there's a party going on. Coke will bring the DJ rig and we'll bring some Coke and we'll be there,'" Blatter recalls. "It was really genuinely community support at the most influential levels."
This is a key point for Blatter — specifically as it relates to brand strategies in a post-Instagram world. While he doesn't see the influencer bubble bursting any time soon — identifying people with large social media followings as being like the loudest person in the room — he believes brands themselves need to get back to a place of cultural relevancy where they are aligned with the people who may not talk a lot, but when they do, it's important.
"You have to touch it all," Blatter says. "Just taking the cream off the top, and trying to get media reach through influencers, is a failed fucking strategy. I think that is the important thing."
If according to Blatter influencers aren't going anywhere, but they're no longer as viable as they once were, how are brands forced to reconcile with the new state of the game? For one, Blatter believes it comes down to "cultural relevancy."
A recent study by MagnaGlobal revealed that 25 percent of product purchase decisions are led by cultural relevance that "align well with cultural events, promote trends that define today’s culture, and support social issues that benefit everyone.” Additionally, the perception of a brand pushes 31 percent of the decision-making process. This is why buzzwords like "inclusivity," and "sustainability" have come to mean so much in modern marketing because brands have seen the value in telling a story beyond just what makes their products unique and special.
This data is not a new idea to Blatter. In 2017, he wrote about this very issue.
"We focus on the commonality between a brand’s values and the passions of their consumers," Blatter stated. "We build relationships around these cultural situations to influence perceptions and consideration by supporting the organizers, zealots, artists, and entrepreneurs that make that particular sub-segment of fringe culture happen."
While companies have certainly pivoted to address the growing importance of cultural relevancy, this need to fulfill a mission in terms of quarterly goals to appease shareholders creates a whole new set of problems. Since publicly traded companies and their CEO's are "beholden to shareholders" — a-not-so subtle way of saying "to make money for" — there often isn't enough time to establish actual legitimacy in a pocket of culture. As a result, we've seen brands become title sponsors for events that they have no business attaching their names to. It's the equivalent to playing a short game when only a long game can truly pay dividends.
"Culture is nurtured," Blatter says. "You can't just buy in day one. It just doesn't fucking work because people don't buy into that."
In a dream scenario, a cultural relevancy program can both adjust a perception of a brand, and increase sales. Blatter describes the upward ascent as looking like a hockey stick. The blade of the stick represents the status-quo for sales. As cultural relevancy is achieved, there's a sharp spike upward that looks like a hockey stick handle. According to Bobby Martin, author of The Hockey Stick Principles: The Four Key Stages to Entrepreneurial Success, the blade years can last as long as 3-4 years. In a world where social media fuels immediacy, hearing years probably sounds ludicrous to many brands. Yet, Blatter assures this is the path forward.
"Stop thinking about what you're going to do this year and next year, and start thinking about the cultures you're going to support," Blatter says. "Make sure the people that are working on the brand teams are passionate participants in those cultures. You can’t have a suburban dad with no credible experience in the arts running a street art program or a skater program. It can't be fake. You can't fake that shit."
Many people have made the argument that the influencer model is particularly susceptible to the changing opinions of young people. Whereas Facebook was once the preferred social media platform, we've seen tech like Snapchat and Instagram come along to threaten their supremacy. As such, a person'a influence is only as strong as the platform itself. Thus, if Instagram were to see a sharp decline in usership, an IG influencer's reach would be crippled. We've recently seen an example of an influencer with over 2 million followers couldn't persuade 36 people to purchase her newly launched clothing venture — indicating that viewership is not the same as influence.
"I offer no hate," Blatter admits. "I'm just saying it's not the get rich quick scheme for brands anymore. It's a get rich quick scheme for the influencers."
If and when more brands start thinking long term about cultural relevancy, it will certainly be interesting to watch as the influencer model shifts as well. Perhaps that's the very reason why Instagram is hinting that it may hide a person's likes in the near future, or why Kanye West and Twitter founder, Jack Dorsey, have discussed stripping the importance of follower counts on the platform.
"Brands really need to do their homework on culture," Blatter says. "They need to understand who the real influencers are and how they can support culture. Winning favor is a complicated game and consumers are getting smart to influencers that sell their reach for a fat check."