Blog
General
August 21, 2024
Share

The Contagious Purchase Model: Redefining Influencer Marketing for a New Era. No more shilling products we don’t believe in.

Explore the future of influencer marketing with the Contagious Purchase Model, introduced by Kaeya Majmundar in the August 2024 white paper. Learn how this revolutionary approach rewards creators for genuine purchases and shares, aligning perfectly with today's digital ecosystem. Discover a sustainable, transparent model that ensures authenticity and measurable ROI, setting a new standard for brand advocacy.

Table of Contents

Abstract

Influencer marketing, the digital marketing strategy that involves using social media influencers or content creators to share a brand, product, or service on a platform like Facebook, YouTube, or Instagram, was once a powerful tool for brand promotion. However, it has become outdated and is in need of significant disruption. Traditional influencer marketing has increasingly become forced and inauthentic in today's saturated digital landscape. This white paper explores what caused the shift in influencer marketing from genuine advocacy to transactional engagements, driven by the explosion of content creators since the pandemic. With over 200 million creators globally and 90% of influencers admitting to promoting products they don't use, the need for a new approach is evident. The Contagious Purchase Model emerges as the necessary evolution of influencer marketing, flipping the script by rewarding creators for their natural behaviors—purchasing and sharing what they genuinely love. This paper argues that the Contagious Purchase Model is the future of brand advocacy, offering a fresh, sustainable approach that aligns with the evolved digital ecosystem and delivers clear, measurable ROI.

1. Introduction

1.1 The Early Days of Influencer Marketing: Authentic Influence When influencer marketing first gained traction around 2016, it was rooted in authenticity. Influencers were seen as trusted voices who genuinely advocated for products they loved. With a relatively small pool of influencers—primarily on Instagram and YouTube—brands could leverage the genuine connections these creators had with their audiences. According to a study by Influencer Marketing Hub (2016), there were approximately 3.2 million influencers globally (Influencer Marketing Hub, 2016).

1.2 The Pandemic Effect: The Explosion of Creators Then the pandemic hit. With people staying home and turning to social media for entertainment and connection, the number of content creators exploded. Platforms like TikTok surged in popularity, bringing a new wave of influencers into the spotlight. Streamers, bloggers, and podcasters also saw significant growth. Today, there are over 200 million creators worldwide, according to a report by SignalFire (SignalFire, 2023).

1.3 Saturation and the Decline of Authenticity With this massive influx of new creators, the authenticity that once defined influencer marketing began to wane. The market became saturated, and the pressure to monetize grew. As a result, many influencers started promoting products they didn’t genuinely use or care about. A survey by HypeAuditor found that 90% of influencers admitted to promoting products they don’t use (HypeAuditor, 2023). This shift has led to a landscape where influencer marketing feels increasingly forced and inauthentic. Consumers are quick to detect when a post is more about the paycheck than genuine advocacy. The use of #ad and #sponsored tags has become a red flag for many, leading to immediate disengagement or skepticism.

1.4 The Need for a New Approach: The Contagious Purchase Model Given this fundamental shift, it's clear that the old model of influencer marketing is no longer as effective as it once was. This is where the Contagious Purchase Model comes in. It acknowledges that creators inherently share what they genuinely buy and love—something that has always been true, even before the rise of social media. By flipping the script, the Contagious Purchase Model allows brands to reward creators for their natural behavior, rather than paying them to post about products they might not even care about. This shift not only improves authenticity but also eliminates many of the risks associated with traditional influencer marketing.

2. The Bottom Line: ROI and Financial Impact

Before diving into the problems with traditional influencer marketing, it’s critical to understand the significant economic advantage of the Contagious Purchase Model. Here’s a breakdown.

ROI Calculations: Comparing Costs and Returns Let’s break down the financial impact of the Contagious Purchase Model versus the traditional influencer marketing model.

Scenario A: Traditional Influencer Marketing

  • Cost: $50,000 for 50 sponsored posts
  • Estimated Revenue Generated: $40,000 (negative ROI)
  • Financial Risk: Dangerously high

Scenario B: The Contagious Purchase Model

  • Cost: $50,000 for 25,000 discount unlocks ($2 per unlock)
  • Estimated Revenue Generated: $625,000 (12.5x ROI)
  • Financial Risk: N/A

3. The Problem with Influencer Marketing

3.1 Forced and Inauthentic Content The traditional influencer marketing model often involves brands paying influencers large sums of money to post about their products. While this can create short-term visibility, it often feels forced and lacks authenticity. A study by Stackla found that 86% of consumers say authenticity is important when deciding what brands they like and support, yet 57% feel that less than half of brands create content that resonates as authentic (Stackla, 2023).

3.2 High-Risk, Low Reward The effectiveness of influencer marketing is increasingly unpredictable. Brands may pay thousands of dollars for a single post, with no guarantee of success. According to a study by InfluencerDB, only about 36% of influencers reach their targeted engagement rates on sponsored posts (InfluencerDB, 2023). This creates a high-risk, low-reward scenario that can be difficult to justify.

3.3 Audience Fatigue and Reputational Risk As audiences are bombarded with sponsored content, they become desensitized to influencer posts. A report from Trust Insights revealed that engagement rates on Instagram influencer posts dropped by 39% between 2019 and 2020 alone (Trust Insights, 2023). This not only reduces the effectiveness of the marketing but also risks damaging the influencer’s credibility and the brand’s reputation. Moreover, brands face significant reputational risks—such as inadvertently sponsoring influencers whose personal views or actions later conflict with the brand’s values. Additionally, there are legal and compliance concerns related to FTC regulations, music copyright violations, and potential false claims made by influencers.

4. Introducing the Contagious Purchase Model

4.1 Definition The Contagious Purchase Model is a self-sustaining approach that replaces the transactional nature of influencer marketing with a more genuine form of brand advocacy. It acknowledges and rewards creators for doing what they already do—sharing what they genuinely buy and love. Instead of paying influencers to post, brands offer exclusive, gated discounts to a broad network of creators, ranging from TikTokers and YouTubers to bloggers and podcasters. These creators can then choose to share their purchases and experiences with their audiences—voluntarily, with no obligation to tag or promote the brand. This simple shift from sponsored to voluntary sharing significantly reduces legal, reputational, and compliance risks.

4.2 How It Works

  • Brands Offer Gated Discounts: Through the integration of the SwayID button on their websites, brands continuously offer personalized, gated discounts to a broad network of verified creators.
  • Creators Unlock Discounts: Creators unlock these discounts while shopping, tailored to their influence level, and use them instantly at checkout. Research shows that 91% of consumers are more likely to shop with brands that provide personalized offers. (Gartner, 2023).
  • Voluntary Sharing: Creators can share their experiences with their followers, but only if they feel genuinely compelled to do so. This eliminates the need for #ad or #sponsored tags, reducing the risk of legal issues, negative audience reactions, and reputational damage.

5. The Potency of the Contagious Purchase Model

5.1 Authentic Engagement The Contagious Purchase Model ensures that any content shared is genuine, resonating more with audiences and leading to stronger brand loyalty. According to a study by Social Media Today, 90% of consumers say authenticity is important when deciding which brands to support. (Social Media Today, 2023).

5.2 Sustainable and Scalable Because creators are motivated by their own experiences and not by payment, the Contagious Purchase Model creates a self-sustaining cycle of advocacy. This approach is also easily scalable, as it taps into a large and diverse network of creators, rather than relying on a few high-profile influencers. A report by Business Insider Intelligence found that micro-influencers with smaller, more engaged audiences drive 60% higher engagement rates than macro-influencers (Business Insider Intelligence, 2023).

5.3 Clear, Profitable, and Risk-Free ROI The Contagious Purchase Model offers clear, measurable, and profitable ROI. Unlike the variable and often fuzzy returns of traditional influencer marketing, this model is straightforward: brands pay a flat $2 per discount unlock plus a base monthly platform fee. This not only reduces costs but also provides a reliable, scalable pathway to profitability.

5.4 Eliminating Risk for Brands The Contagious Purchase Model significantly reduces the risks associated with traditional influencer marketing. Brands no longer have to worry about sponsoring influencers who might later harm their reputation, as the model doesn’t require paid posts. There are also no FTC compliance issues, as there’s no need for #ad or #sponsored tags. Additionally, concerns about music copyright violations or false claims are minimized because communication is voluntary and not sponsored.

5.5 Scalability and Long-Term Brand Loyalty The Contagious Purchase Model is inherently scalable. Brands can expand their reach by tapping into an ever-growing network of creators, ensuring long-term visibility and engagement. By fostering genuine connections between creators and their audiences, the model builds long-term brand loyalty. As creators continue to engage with the brand and share their experiences, the brand message spreads organically, leading to sustained growth and customer retention.

6. Comparative Analysis: The Contagious Purchase Model vs. Influencer Marketing

6.1 Engagement Metrics Content generated through the Contagious Purchase Model sees higher engagement rates than traditional sponsored posts due to the voluntary nature of the advocacy. A study by Sprout Social found that 57% of consumers are more likely to engage with brands that post authentic, non-sponsored content (Sprout Social, 2023).

6.2 Cost Efficiency Brands using the Contagious Purchase Model report significantly lower costs per engagement compared to traditional influencer marketing. This is because the model eliminates the need for large payments to influencers and focuses instead on rewarding genuine interactions. Brands that focus on organic engagement strategies see a 70% increase in long-term ROI compared to those relying on paid influencers (HubSpot, 2023).

6.3 Longevity of Impact While influencer marketing campaigns often have a short lifespan, the impact of the Contagious Purchase Model is long-lasting. As creators continue to engage with the brand and share their experiences, the brand message spreads organically, without the need for continuous input or payment. A study by Edelman found that 63% of consumers trust influencer recommendations less now than they did in the past, underscoring the need for more authentic, sustainable marketing approaches (Edelman, 2023).

7. Competitive Landscape: Where the Contagious Purchase Model Stands

The marketing industry is crowded with various strategies, each claiming to offer the best ROI and engagement. Traditional influencer marketing has dominated for years, but it comes with significant downsides: high costs, inconsistent ROI, and the risk of inauthentic content that can damage brand reputation. As the market evolves, new approaches like the Contagious Purchase Model are emerging, challenging the status quo and offering brands a more sustainable and effective alternative.

Traditional Influencer Marketing

  • Strengths: Established method, broad reach, familiar to brands and marketers.
  • Weaknesses: High cost, unpredictable ROI, potential for inauthentic content, brand reputation risks, FTC compliance issues, and difficulty in measuring long-term impact.

Affiliate Marketing

  • Strengths: Performance-based, measurable ROI, cost-effective for brands.
  • Weaknesses: Focuses on conversion rather than brand loyalty, limited impact on brand advocacy, and can still feel transactional rather than organic.

The Contagious Purchase Model

  • Strengths: High authenticity, consistent and measurable ROI, reduced brand reputation risks, voluntary and organic content creation, scalable, and fosters long-term brand loyalty.
  • Weaknesses: Requires brands to shift their mindset from traditional methods, initial setup may involve integrating new technologies like the SwayID button.

In this competitive landscape, the Contagious Purchase Model stands out as a forward-thinking, sustainable alternative that addresses the shortcomings of traditional influencer and affiliate marketing. Its focus on genuine creator engagement and voluntary sharing positions it as a future-proof solution for brands looking to build long-term relationships with their audiences.

8. Risks and Mitigation Strategies

As with any marketing strategy, there are inherent risks associated with the Contagious Purchase Model. However, these risks are significantly lower than those posed by traditional methods.

8.1 Creator Saturation

  • Risk: As more brands adopt the Contagious Purchase Model, there’s a potential for oversaturation, where creators are overwhelmed with discount offers.
  • Mitigation: Brands should focus on personalization and exclusivity in their offers to stand out. Regularly updating discount structures and tailoring them to individual creator profiles can maintain interest and engagement.

8.2 Initial Adoption Hurdles

  • Risk: Shifting from traditional influencer marketing to the Contagious Purchase Model requires a change in mindset and potentially new technologies, which might pose challenges for some brands.
  • Mitigation: SwayID offers seamless integration and support to help brands transition smoothly. Additionally, SwayID’s Satisfaction Guarantee can help convince stakeholders of the benefits.

8.3 Measuring Impact

  • Risk: While the Contagious Purchase Model offers clear ROI, measuring long-term brand loyalty and engagement might require new metrics and approaches.
  • Mitigation: Implementing a robust CRM and analytics platform alongside SwayID can provide deeper insights into creator behavior, allowing for continuous optimization of the strategy.

8.4 Maintaining Authenticity

  • Risk: As more creators engage with the Contagious Purchase Model, there’s a risk that some may attempt to game the system, potentially leading to inauthentic content.
  • Mitigation: By focusing on a broad network of creators and leveraging data analytics, brands can identify and reward only those creators who genuinely align with their values and audience.

9. Conclusion: The Future of Brand Engagement

As brands seek more sustainable and effective ways to connect with their audiences, the Contagious Purchase Model offers a compelling alternative to traditional influencer marketing. By focusing on genuine advocacy and voluntary sharing, it creates a more authentic and scalable approach to brand engagement. The transparency and predictability of its ROI, coupled with the elimination of the risks associated with paid influencer posts, make the Contagious Purchase Model a safer and more reliable investment for brands.

10. Future Outlook: The Evolution of Marketing

As the digital landscape continues to evolve, brands that fail to adapt to new forms of engagement will be left behind. The Contagious Purchase Model is not just a trend; it represents the future of brand advocacy and customer connection. By 2026, brands that embrace this paradigm shift will lead the charge in creating long-term, scalable, and authentic relationships with their audiences. The future of marketing belongs to those who can navigate the complexities of digital authenticity, build trust with their audiences, and leverage scalable solutions like the Contagious Purchase Model. Those who don't adapt may struggle to maintain relevance among increasingly discerning consumers.

References

‍

About the author
Kaeya Majmundar
Co-Founder & CEO, SwayID
Join me in this movement. Together, we can kill the toxicity and revive marketing with authenticity, honesty, and real human connection.

Oct 14 FTC influencer crackdown. $43k fine per violation. CYA or see ya.

AboutFor BusinessFAQFor ShoppersBlogSatisfaction GuaranteeData DeletionCompliance Guarantee
Terms of ServicePrivacy Policy

© 2024 SwayID
Swaypay It, Inc