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Industry Analysis / Tue 20 Mar 2018

What tech firms can learn from the Kylie Jenner, Rihanna and Snapchat debacle

With social media giving everyone a platform to share their opinion in seconds, market influence has never been more crucial to a brand’s success.

In February, a single tweet from reality star, beauty entrepreneur and social media personality Kylie Jenner resulted in Snapchat’s stock market value plummeting by a cool $1.3bn (£1bn). The star tweeted “sooo does anyone else not open Snapchat anymore?…”, followed by a hasty declaration of her remaining love for the app, once she’d realised what happened in the aftermath of her initial tweet.

Despite the headlines, recent data from marketing intelligence SimilarWeb shows that Snap’s share price was already falling way before the youngest of the Kardashian-Jenner clan tweeted – and actually dropped by 3.7% after Citigroup downgraded its stock and gave it a ‘sell’ rating. The reason? Concerns that anger and negativity about a recent app update and re-design would see users abandon it.

Jenner’s tweet may have not wiped off Snapchat’s market value singlehandedly, but user opinion was seemingly powerful enough to dampen Wall Street’s faith in the company.

Luckily for Snapchat, app downloads are still going steady, but users are unfortunately less than impressed with its recent redesign. In fact, 83% of the 1,941 reviews for the Snapchat update on the App Store are negative, featuring just one or two stars, according to data by mobile analytics firm Sensor Tower. The most referenced keywords in the negative reviews include “new update”, “Stories”, and “please fix”. 

Rihanna and Snapchat

Fast forward a few weeks and Snap finds itself in hot water again, after world-famous singer Rihanna criticised the company after it added a ‘Would you rather’ feature, which asked users if they ‘would rather slap Rihanna or punch Chris Brown’, seemingly alluding to a domestic abuse incident between the two, which took place in 2009. 

The star posted a message directed at Snapchat on her Instagram story, condemning it for being insensitive toward domestic abuse. “You spent money to animate something that would intentionally bring shame to DV [domestic violence] victims and made a joke of it!!!,”she wrote.

Snap said the ad should have never appeared on its service, but it was a little too late to repair the damage. The company’s share price fell by as much as 5% – that’s a loss of about $600m (£429.88m) – after the star shared her concerns with her 61m followers.

Rihanna’s (@badgalriri) Instagram stories directed at Snapchat

The importance of influencers

So, what can small tech businesses learn from this? Fredrik Andersson, the CMO and co-founder of influencer marketing company Tailify, told UKTN: “The Snapchat incident shows how we live in an age where influencers decide how much something is worth.”

“I think Warren Buffet’s quote ‘It takes 20 years to build a reputation and only five minutes to ruin it’ has never been truer, because of social media. An influencer or an influencer tribe can control the perception of a brand, but ruin it in minutes.”

Social media allows celebrities and influencers to voice their opinions to the masses in real-time at a time where consumer opinion is perhaps growing increasingly more fragile and fickle. Snapchat is proof that if there is enough negativity about a company on social media, investor opinion could be wavered and important sums of money lost.

Since Instagram launched Stories, Instagram has been the go-to platform for influencers, sparking and ending trends on social media, Andersson said. “Of course, a great product is always at the root of a successful company,” he admitted. “But just as influencers can ruin it, they can build it up. Success is uplift in brand value.”

How to lead a successful marketing campaign

With this in mind, Andersson shared his advice to help companies avoid following in Snap’s footsteps: “Stay close to your influencer tribe. Listen to them and establish an honest and open relationship where the goal is to give something back to their followers and your target audience.”

Tailify is credited with helping some of the world’s largest brands and agencies build influencer strategies, find influencers, manage campaigns and measure the results. Andersson suggests that when it comes to selecting an influencer, companies should push feelings and impulses aside and focus on the facts.

According to data from the company, 95% of influencers selections are done wrong because they are made without data insights. Andersson references a brand whose specifically targets males aged between 18 and 30 in Sweden – yet the majority (95%) of the influencers’ followers are located outside of Sweden and 60% of these are female.

With a perfect influencer team on board, exceptional content is at the root of any successful campaign, Andersson added. “The content should inspire, entertain and feel authentic and should be in line with the influencer content the followers decided they wanted to see on a regular basis, and clicked ‘follow’”.

“We’ve seen startups boom in the last years because of effective influencer strategies,” he noted.

From Daniel Wellington – who started with gifting out watches to a few influencers and now sells over 2 million watches a yea – to Kylie Jenner who launched her own cosmetics brands and reached $420m in sales within 18 months, we are at certainly at the peak of influencer and brand collaboration.

Most startups aren’t able to tap into A-lister influence from the ‘get-go’, but Andersson explains investment in this area does not need to be expensive. “In many cases it is still just a fraction of what you pay for the ad-space on TV or in magazines, where you’re not able to engage with the content.”

“It’s a cost-efficient way for startups to get their brand in front of their target audience. In conclusion, companies of all sizes need to leverage the power of influencers to win.”

There’s no denying that influencer marketing can be extremely valuable to help businesses gain exposure among their target audience, but if done badly, it can result in long-term reputation damage and that’s certainly something startups and scaleups should avoid at all costs.