Tony Phillips admits being perplexed about his old pal Henry Tajer taking an equity stake and becoming executive chairman of The Influence Group earlier this year. It wasn’t what he was expecting from Tajer, a veteran media agency boss who handled the Coles account at UM when Phillips was CMO and the supermarket was still outflanking Woolworths and enjoyed darling status from stock investors. But that fairy tale ended in 2015. 

Now they’ve reunited with Phillips spearheading the company’s plans for the Melbourne market loaded with untapped opportunities across banking, automotive and sporting codes. Phillips says the biggest quandary for influence marketing is that despite word of mouth being the “most powerful form of communication”, it’s been notoriously difficult to measure. Equally, influence has been dominated by social platform influencers but it’s only part of the story – real word conversations among peers, friends and families and even in-store carries more clout. 

“This is not about Kim Kardashian,” said Phillips. “So it's not kind of thinking about the wags holding up the product to the camera on TikTok. There is some strategic intent – and by the way I've seen examples where that can actually work brilliantly well. I’ve been doing some work with certain companies where they've utilised footballer’s wives and they've done extremely well as influencers for brands. So it's not saying it's one thing or the other. But when Henry popped up at The Influence Group I was quite surprised. Maybe, like a lot of clients when I put that hat on, I probably didn't have a huge opinion of what influence was," Phillips admitted, other than "Kim Kardashian holding up a product to Instagram or whatever.

"To me it was a little bit superfluous and not quite brand building. But the more I dived into it, you realise word of mouth and influencing word of mouth via platforms and beyond is the single most powerful form of communication we have ... but it’s been ignored because it’s been very difficult to know where to place.”

Measurement remains a sticking point, mainly for the agency sector, per Tajer. Brands, he said, are figuring out new ways to measure the impact of influence marketing by isolating direct business impact rather than traditional audience reach and brand metrics.

“There's a lot of naysayers, a lot of people trying to punch us in the nose with measurement and interestingly, a lot of the commentary or the criticism isn't coming from other media. It's actually coming from other agency and service offerings who maybe are seeing that it's really difficult to build the capability – because it is a very specialised area and it might not be accretive to some businesses and it's been ignored for a long period of time," said Tajer. 

"Some are rushing to play catch up and and that is really difficult for them. We could talk at length about measures that have hurt certain areas of the media and marketing industry because they just measured something that really doesn't matter," he added.

"One of the big misconceptions is that it’s the platforms which facilitate influence. But influence is a force that everyone has and that force lives on a platform, it lives in the physical state when people are together and when people are communicating and engaging. If we look at retail as an example, it happens in store and online. So it's not just selfies on Instagram or videos on TikTok. It's real human interaction and human influence on others. And we've been doing that for forever in a day.”

Tajer reckons some agency groups are using measurement as a trojan horse to stymie client testing on influence marketing.

“There's been a lot of questions around measurement – at times posed by some as a defensive question. In some parts of marketing and media, they're not measuring what matters, and it's actually hurting the client and the media. So we're not going to go out and try and have a stoush about measurement with those who are trying to poke holes in our approach of measuring what matters to that client."

Instead, he said the firm is trading on outcomes. 

"If the outcome or the output of this activity is to generate reviews, we measure things like the number of reviews, the quality of the reviews, and then what the reviews then go on to generate in terms of sales. Then we can have a robust conversation with a client around the investment in a program – here's what it actually generated based on the plan – and what's the by-product of that versus what's the awareness or what's the CPM, which is an irrelevant measure. So we're going to continue down that path of talking about the need to measure what matters in and around influence and influencers.”

What would Tony do?

So if Tony Phillips was still a CMO, how much should be allocated in a marketing budget and where does that budget likely come from? Phillips said the first priority is to experiment in a test market, perhaps Adelaide, to build confidence in what can be delivered and then expand. The the social platforms and some of their ad formats would likely underwrite a broader influence strategy budget, per Phillips, although Tajer said dollars are also moving from production budgets as well as PR and corporate affairs.

“We're working with some of the independent media agencies and partnering with them with their clients and they've asked how much should we allocate? We say allocate something in the order of 4-5 per cent of a campaign budget to start with, and we set out some parameters and we design an introductory test and learn pilot program. Clients that go in at those levels get a meaningful campaign that has a meaningful outcome," said Tajer. "We're seeing clients go from about 4 per cent to about 10 per cent over the course of about 12-18 months, as well as bringing influence and influencer marketing into an always-on mode.”

And the outlook for next year for the business?  Tajer claimed the business is up double digits on last year and is gunning for 20 per cent. “We're quite happy about that," he says. “As we look into 2023, we're really optimistic. We think our second half of the financial year is going to be significantly stronger.

“We’ll potentially exceed that [20 per cent] for a lot of different reasons. We’ve got new capabilities but also the level of marketplace engagement and curiosity to understand influence and influencer marketing is increasing quickly.”