The Surprising ROI of Small Online Influencers

Sparkling water brand LaCroix has been available in the U.S. since 1981, but it took off to become a go-to drink for millennials about 10 years ago. Its creative flavors and candy-colored packaging were part of the reason, but so, too, was the company’s strategy of working with a large number of relatively small social media influencers who talked up the brand to their audiences.

In 2016, Inc. noted that “while some brands pay thousands of dollars for Instagram users with large followings to feature their products, LaCroix has adopted a reverse approach to finding and rewarding influencers”: looking for people who tagged LaCroix online, engaging with them, and maybe offering them a free case. LaCroix’s strategy of working with promoters who have small numbers of followers is much the same today — and likely helped it earn a No. 1 ranking earlier this year on Newsweek’s annual list of the most trusted brands.

Traditionally, research and best practices in influencer marketing have favored big (or macro) influencers for their extensive reach, expecting the wider scope to lead to a higher return on investment. However, two recent studies conducted by this author group paint a more nuanced picture.

The first study, which used data on sales generated from influencers primarily on Instagram, revealed a surprisingly high ROI from nano influencers — those with small but devoted online followings — with significantly higher sales conversion rates compared with the rates for more prominent influencers. The second study, which looked at livestreaming influencers on TikTok, largely confirmed those results. Additionally, we found that there’s value in thinking about exactly how influencers with different follower counts should be strategically combined in a marketing campaign.