AI in Influencer Marketing

Guy: [: 00:00:00

Pro relevant.com. Today I'm interviewing Luke Yarnton and he's with the Rave, and let me tell you a little bit about him. Luke is the co-founder of The Rave, and that is a tool that helps brands uncover influencers already in their customer base with a FinTech and e-commerce background. Luke previously scaled part pay across multiple global markets before his acquisition by zip.

about helping brands unlock [: 00:01:00

Luke: guy. Really excited to be here. Excited to be a, a, a part of the pod. I I did a, a good bit of listening, um, before joining the POD summit, your previous ones, and, uh, particularly found the one with, uh, Jeff recently.

Um, super, super helpful. And although it's not my area of expertise, I found a lot of parallels to speak, um, with what he was saying specifically around sort of how important impressions are in modern day marketing. So anyone listening to this, I'd suggest you go through the archives and some absolute gold hidden in those previous podcasts that guys are recorded.

hatever it is, and, and his, [: 00:02:00

And, and I kind of look at it as, you know, building the, the, the, the layer cake. You need to have impressions, you know, across the board and. Exactly. And influencer and including, uh, influencers. So, um, well tell us a little bit about your backstory on AI and marketing, and then tell us a little bit about the rave and, and the, uh, the business of, uh, soliciting and winning, uh, uh, you know, customer influencers.

Yeah.

the story is, uh, in the year: 2018

Beautiful views from the office looking out over the harbor. Um, if you get in early enough, you see the sun rising over Rangitoto Island. And what we were doing is building a buy now pay later platform, the first buy now pay later [00:03:00] platform in New Zealand. Um, the founders had seen what was happening with, uh, Afterpay in Australia.

So we were the, the New Zealand, uh, alternative to that and took on the New Zealand market, um, surrounded by a bunch of really incredible, clever people. And my role was effectively a generalist. That includes marketing, that includes operations that include. It's, uh, everything, everything in between. Um, some days I'm picking up the phone and speaking to customers for customer support, and some days I'm doing technical onboarding.

Um, but long story short, the business grew really well. Eventually there was an opportunity for the business to expand beyond New Zealand. The founder looked around the office and was looking for someone to help. Opened the new office in, uh, London and everyone else had a wife and kids. And the most expensive thing that I owned was a surfboard at the time.

alian publicly listed, uh, a [: 00:04:00

They had pretty aggressive, um, growth plans, um, which involved me opening office in Mexico City, in Toronto, in Singapore, and assisting with, uh, another business that they acquired in the US called Quad Pay, which they, they later acquired the, the full rights of that business as well. And they're, they're continuing to do well to this day.

Um. Towards sort of the, the end of the COVID time. Um, me and someone who was working with me on this global growth team, um, decided it was about time to step away. There's only so much you can learn within that sort of environment. And as financial technology businesses at time found money, raising money was, was significantly more difficult.

been speaking to E-Commerce [: 00:05:00

Um, their cost per acquisition has skyrocketed. They need new and innovative ways, um, to acquire new customers, uh, in order to keep the business running sustainably. Um, so we said. Based on what we've learned from Buy Now, pay later, uh, which is the core principle of like why Ba Buy now, pay later has been, uh, successful or one of the core principles is that previously it was applying for point of sale finance, effectively at a, at a business or at an e-commerce site.

you'd be approved to make a [: 00:06:00

We turned that really, really arduous, boring process into, you have to enter three or four data fields. We'll automatically assess the customer at the point of transaction and then give them some purchasing power based on a risk profile that we know that. There's a very, very, very low risk that they're gonna default in the payment and that they can purchase at our store, and we'll spread the cost over a four fortnightly, biweekly period.

Um, so we said, cool. So what we did is took something really complicated and drawn out and made it simpler. Uh, so the original. Idea of, uh, the rave, which is what I'm doing now. Version 1.0 was something that has existed for a long time, um, that's really clunky and annoying and inefficient is influencer marketing.

[: 00:07:00

24 to 48 hours on average to think about it. And then you might get approved, uh, and then you're able to represent that brand and maybe you'll get an affiliate link or gifted some goods if you're lucky. And we said that sounds like a pretty easy thing to solve. One of the key issues with that is that it was really hard for a brand to process funds back to a customer.

Pal transaction every single [: 00:08:00

They refer a friend, family, a follower in real time, would that make people share more and help them acquire more customers? And the answer was yes. Um, so we did this with, we've probably got to about a hundred brands using that technology. The best case we found was there was a, uh, there's a luggage brand we, we partnered with.

When we integrated with them, they were doing $8 million a year in transactions by including our democratized affiliate solution, um, and the customer journey. We added a million dollars worth of transaction revenue at effectively no cost. Um, they were, they were given away less to the new customers acquired by our platform, um, than they were spending on the equivalent clicks via any of the platforms that they were marketing on.

they have this process, uh, [: 00:09:00

Within a, a very few clicks you get your credit approved. It's just amazing as opposed to waiting a day or a week or a month or whatever it is. Yeah. It's, it's ready right there. And, and, uh, and, and I can see then where, you know, in, in this influencer marketing where a brand. Uh, you know, wants to hire these influencers and pay them for what they're worth.

Exactly where I could imagine it's, you know, it's very difficult on both sides. You've gotta get all the banking stuff done and mm-hmm Then purchasing's gotta get in the way and legal's gotta get in the way and whatever. So, makes a lot of sense. Yeah. So what do you see as next in the, uh, influencer model?

Luke: Yeah. So in terms of how we got to where we are now, working with all these brands that were using our, uh, referral and affiliate technology, uh, we found out that they actually really got most excited about one thing, which is when we could show them that there was an influence that was talking about their brand.

I. And, [: 00:10:00

So we said, how can we do that more effectively and get a significantly higher. Uh, level of accuracy, uh, in making sure that they don't miss these opportunities of influencers who make a purchase every day. So we threw together a really, really simple solution off the bat, which was every single time a customer made a transaction, um, we are able to see based on our integration, uh, a very simple customer profile, which gives us sort of their name, their email address, and a couple of other details.

o then we say, based on this [: 00:11:00

And if yes, then we have some fun with it and we can help them capture that influencer. And encourage them to join their creative team, their ambassador, army, their influencer program, whatever it might be, uh, and get them sharing, talking about the brand as much as possible. So there are a couple of small, clever little AI solutions that we've got embedded into that to make sure that we're hitting them at the right time.

We're hitting them with the right message, uh, in a way that feels authentic and genuine, um, but captures that value of a influencer has just made a purchase from you, which means a. They actually care about your brand and your brand is top of mind for them at the moment. Um, so anything that they say about your brand is gonna be authentic because they've made a purchase with their own cash.

Guy: Right?

that makes. This influencer [: 00:12:00

Cut through the noise in a way that it's super efficient.

Guy: Yeah. Now one thing though with, uh, with influencers, uh, especially paid influencers mm-hmm. You know, do they really, you know, are they really being truthful, so to speak, and authentic? We spoke about that before the call, uh, when you know, you're, you're the influencers getting paid and, you know, so really they're, they could almost be a paid sponsorship as opposed to a true kind of.

at trust, uh, side of things [: 00:13:00

Luke: Yeah, look, so there, there's a couple of levels to it and I, I think this also speaks to a very interesting trend that we are seeing at the moment, which is brands are moving away from these larger macro creators that have more than 500,000 followers and are really, really interested in working with the, the micro influences and the nano influence from the smaller end of the scale.

The reason for this. Is that there's, there's a, a really good chart that I saw the other day that I should have brought to this where it sort of shows that as the, the follow account increases, the level of trust decreases and whatever that influencer has to say. Um, so these smaller influencers have a stronger trust in their audience and they care more about what their audience feels because there's, there's a more sort of close contact and.

ly on what they have to say. [: 00:14:00

So even the best brand is, is still not going to cut through. Where there's micro influence or influencer that doesn't really believe in the product because they're not gonna risk their small audience on something that might be a dud. There's also like, I suppose in, in terms of what our approach is, we try and make it feel as se, serendipitous and authentic as possible.

You never want, uh, an influencer to promote something that they're not genuinely excited about because it tends to make for pretty low quality content. Mm-hmm. Audiences are. Are getting better at sort of judging just how truthful and just how authentic a lot of these Yeah, and I

Guy: think you can, I think you're right.

, so to speak. So, uh, yeah. [: 00:15:00

Luke: I, I think that these influencers sort of catching onto the fact that the trust that they have is the currency that they play in.

Uh, and by that I mean people are seeing that. Uh, brands are starting to use AI generated avatars to create false user generated content at the moment. Um, yep. I believe that's a very shortsighted approach. Um, well,

Guy: plus it's, uh, I think, uh, I think the FCC frowns upon it because it's, uh, you know, it's, it's your stuff trying to influence and that's, uh, that's, uh, I, I don't know what the actual regulation is on there, but it's, it's frowned upon and I, I think it might actually, you know, lead to a.

You know, at least in the US anyway, some kind of a fine or something like that. So how is, uh, ai, uh, how is AI affect affecting the, uh, influencer side of things?

nd it's impacting us. Uh, so [: 00:16:00

To reach out to thousands of influencers who've never heard of them before via, via email typically. And they'll just blast them with a seven step drip campaign saying, Hey, promote my product. This is us, this is our product. Promote us. This is the problem we might solve as a product. And um, so there's a lot of fatigue, uh, from the influence perspective around like sorting through these offers that are coming through.

And trying to make sense of them. Um, so that, that's where our approach is slightly different in that we are saying, look, we are only going to help you reach out to a customer that already knows and loves your brand. They've heard of you, they already have the product, they're using it, and they have a very high likelihood of them wanting to interact with you as a brand because a, they've already received an order confirmation from you.

g exactly where they need to [: 00:17:00

Is significantly more effective as an incentive than the exact same amount of money as like a would you pay to post about us for, let's say they, an example is they've, they've just bought $120 worth of, uh, fitness apparel offering someone a refund of $120 for, for just popping you on your Instagram story, for example, is.

more authentic and a little [: 00:18:00

Guy: Yeah, that is kind of weird. It's a interesting perspective and uh, maybe it's. Maybe it's the, uh, the connection that the person has with the product and the purchase and stuff like that. Mm-hmm. It's kind of interesting, you know, but one of the things though too, is, uh, when I, so we do ROI marketing, ROI, and, and we look at what kinds of programs work better than others, and then, you know, the ones that are really working well, then you wanna invest more in.

The ones that aren't working so well, then they get invested less in. So where do you see, you know, and one of the challenges too, when you're measuring effectiveness, it may also be that you're creative or your target or something else may be missing and needs to be diagnosed. So, uh, for influencer marketing, and especially as it relates to ai.

So where do you think brands are wasting money in how they're, uh, approaching, uh, influencer marketing?

Luke: Yeah, so I, I [: 00:19:00

Um, and, and, and second to the, if you speak to any brand, uh, particularly in like the e-commerce space and, and similarly in like the consumer SaaS space, which is where we're sort of increasing our, our coverage there, the amount of gifting and seeding that. Goes wasted is astronomical. Um, so I was speaking to a brand the other day that as part of their influencer program, they gift someone a product that has the value.

It's, it's not crazy experience. If it was like a, the standard gift is a a $45 product. It's in the supplement space. And they were telling me that on average. For every product they gift, only 20 to 30% will actually post about it. And all of those, probably only, only half of them are actually half decent.

way a bunch of product. With [: 00:20:00

Guy: Yeah.

Luke: If they post at all.

Guy: Yeah. Yeah. That's, uh, not really a very issue, I guess, you know, I guess it, it also depends though, on.

Y you know, the, one of the things about a giveaway is even though the product might be worth $45 at retail, it may only cost mm-hmm. The brand maybe five bucks, or maybe this is true, seven bucks or something like that. So yeah, it's relatively inexpensive to, uh, to giveaway product.

Luke: I, I think in speaking to that previous discussion we had around the shift away from these big macro influencers towards the nano influencer and the micro influencer level of the spectrum is that brands up until now have been cutting these massive checks to get, um, a big influencer posting about them and can be up to like $50,000 per post is the higher scale of what we've worked with.

in, those. Those influencers [: 00:21:00

We'll get a, a conversion rate. So someone who used one of our, our, our links to click onto a page and then make a transaction is consistently above 8%. So the level of trust they have, if, if they've got a link from a micro influencer that they trust, they'll convert higher than 8%. And then when we've had someone that has more than 50,000 followers, um, so towards that, that macro end of the scale, the conversion rate is consistently below 1%.

So there's that massive divide and just how effective they are. Yeah. Getting their audience to, to listen to them and how much they trust what's going on in that promotion.

you know, you're using, um, [: 00:22:00

Yeah. But in, especially if you've got a pretty, uh, strong brand. Mm-hmm. And, uh, you know, the. Even a positive, you know, recommendation or referral that might come from your influencer also may get them to purchase another channels. And I think, you know, it's kind of like this, this, uh, I like it, call it the layer cake effect because Yep.

You know, all of those things kind of add up. And if you leave off one ingredient or if you leave off the icing mm-hmm. Or something like that, then the cake just doesn't, you know, fly very well. It might exactly, it might fly, but it isn't gonna taste very good. So quite often if you get a really good recommendation, you know, from a, a true believer in the product, then it can really drive the, uh, the brand in other ways and through other channels.

e, uh, influences. Yeah. Uh, [: 00:23:00

Guy: Yeah, absolutely. So, uh, we haven't really talked though too much about how AI influences.

Tell me, tell me a little bit more of what, what's really going on there and how, you know, AI can be a, a big part of this, uh, of, of a brand's influencer strategy. I.

Luke: Yeah. So I suppose, let me speak to our stack in terms of how, how we are using, uh, AI to help, uh, brands connect with influence that matter to them.

So for one, we are using, uh, our solution that a tidies up the customer profile and allows us to match it against an influencer profile that exists globally. And in the second key element is that we've got an AI agent that will send an Instagram DM to that influencer. That's gonna be sent a long time, the exact same time we've got a, an email going out to that influencer.

t is it's taking a very time [: 00:24:00

Uh, where the beauty of some of these clever little AI agents is that they're indifferent, indistinguishable from a human, using the same tool, um, where you can reach out to them in a natural and organic way, acknowledge that they've made a purchase and that you like their content, uh, personalize it to a level that.

Won't be picked up, uh, by the Instagram sort of monitors and deliver, uh, a really high value message. At the right time.

Guy: Yeah. Um,

Luke: so, so that's another key element of how we are using ai, particularly in our stack, uh, when it comes to influencer.

e things we were, we've been [: 00:25:00

Exactly. Just amazing how it, it makes such a difference and, and can really drive the. The business

Luke: 100%.

Guy: Yeah. And so something, sorry, you go No, no, no, go ahead.

Luke: I was gonna, something that we're really excited about that's still, it's still in beta testing with us at the moment. Um, is that, again, using a, a similar sort of AI agent style approach?

Is that, we'll, we'll be using it to view the most recent six posts of a creator, perform a quality score against that, that content. Specifically referencing who is the brand, who is their ICP, what type of content they're looking to have creators, uh, share on their behalf. And then based on how strong that quality fit is, generating a unique offer for that particular influencer based on how valuable we think their post will be.

d this is still very much in [: 00:26:00

So having that automatic logic that says This person is a perfect fit for your brand, we see that they've purchased, that could be. Automatically offering them $300 for them to post about you on their Instagram story. Um, or it could even be as clever as automatically initiating a bunch of free gifts sent from your Shopify store to that particular person, because we know their delivery address already as like a surprise and delight to someone who's super high value versus for [00:27:00] someone who's not as helpful.

But we still want that top of funnel awareness offered to refund their most recent order in exchange for a an Instagram story or a reel.

Guy: Yeah. Yeah. Interesting. That is, uh, you know, and, and it is that personalization and when I think about what you're doing is basically your customer is the influencer.

And so anything that I can do to, you know, personalize my message and timing exactly, and offer to that individual is gonna make a lot of sense. Mm-hmm. Uh, Luca, as much as I'd like to, we, I could go on for a long time with you, but I think I'm gonna have to, uh, we're gonna have to do one last question here, and I, my o my last question is always.

Uh, about up and coming new marketers and what advice you would give to, uh, an up and coming new marketer that wants to come outta college and, uh, break into marketing. What, what kind of advice would you give? I.

Luke: Yeah, so look, I, I studied marketing in college as well at the University of Auckland, um, a great school.

my marketing degree, but now [: 00:28:00

Um, but, but the core principles of marketing remain true. And for, for me personally, where I've found the most value, and I think any young marketer should be doing the same thing, is having as many. Long form conversations with actual users or actual customers informs so much about. The way that your product or service is gonna be perceived.

ns. Uh, and asking all sorts [: 00:29:00

Just believes that they understand the world without speaking to the humans who exist within it. So your ability to get as many hours of, of listening time in and learning and reflect on what you've heard, drawing patterns is, is the ultimate, uh, way to get ahead, in my opinion.

Guy: Yeah, absolutely. And, uh, you know that, well, I, I hope the universities are encouraging, you know, new graduates to, to do that is to really.

Spend time with their, uh, with the chat GPT or the research and really understand what it is that they, they wanna do, what it is they might be able to do, and, uh, you know, and how they can then break into that market. Mm-hmm. So, uh, um, you know, and, and I, I think that's, I think that's gonna be one of the new.

now, help them to really get [: 00:30:00

Luke: Absolutely.

Guy: Yeah. Yeah. Well, Luke, uh, really appreciate it. Thank you so much. You know, influencer marketing is, uh, one of the critical channels, uh, for all of our customers and clients. We've seen how successful it can be. And so it's great to hear what your story is and how, you know, you're helping brands basically treat influencers as a customer, so to speak, and how they a, uh, acquire them.

Uh, thank you and, uh, really appreciate it. So, where can folks, uh. Uh, reach you and your company to learn more about, uh, what you do

ssibly using the technology, [: 00:31:00

Guy: Fantastic. Well thank you for that and, uh, thanks for, uh, being here and very, uh, informative. So, um, for the audience though, certainly, uh, please stay tuned for many other videos in this series of the backstory on the market, on marketing and ai. And please visit marketing machine.pro relevant.com and learn more about, uh, my upcoming book, the AI Marketing Machine.

Luke, thank you so much. I really appreciate it. Thank you. Be I'm good.