A rumored $20–30 million dollar exclusivity deal with a single, major esports personality, among others, failed to drive enough user adoptions for the platform. Could a different influencer marketing strategy have worked?
Article Summary: Micro-influencers are often much more worthwhile for a brand than A-List, macro-influencers are. It’s also important to integrate social and community aspects into your product from the start.
Influencer marketing has changed a lot in a short amount of time. What typically was always considered “celebrity endorsements,” and a convenient add-on to any marketing plan has become essential for many brands in 2020 and beyond.
While we have suggestions at Werner and Media on influencer strategy, ultimately there’s a lot of factors that dictate whether or not a partnership between brand and influencer will be a success. This article considers some alternate influencer marketing strategies and tactics, as well as imagines different scenarios for Microsoft that brands can apply to their own influencer strategy.
What Happened? A Recap of Events
Esports star Ninja made waves in 2019 when he announced he was permanently leaving Twitch for Microsoft’s streaming platform Mixer, [first reported by Polygon.] Twitch, a streaming platform that is dominant in the gaming world and owned by Amazon, is where Ninja primarily hosted his streams up to that point — to an audience of over 14 million. This announcement rocked the media industry for a variety of reasons. First, neither Ninja nor Microsoft disclosed the deal size, although it was rumored at the time to be between $20–30 million, (with some reports speculating up to $50m.) This is a large amount for an influencer deal in general, let alone within the up-and-coming esports industry, and piqued much interest among legacy tech brands the likes of Microsoft.
Second, Microsoft’s Mixer continued to poach high profile streamers from Twitch, including Shroud and KingGothalion in the following months, all on rumored exclusivity deals, (the streamers announced they were leaving Twitch completely to focus on building their channel at Mixer.)
Afterward, it was noted that extreme tension existed between all parties, with Youtube’s H3 Podcast (who has 2.17M subscribers and has worked with both Twitch on their own deal, as well as hosted Ninja as a guest on their podcast,) speculating about cryptic Twitter posts from Twitch’s leadership in the weeks following the deal.
Oh yeah… Microsoft also created this interesting promotional video, which took the concept of a press conference as entertainment literally.
In July 2020, almost a year later, Microsoft announced it was closing up shop at Mixer amid cost and operations concerns, (and heated competition from Amazon’s Twitch, Facebook Gaming Creators, and Youtube’s own effort to push livestreams to the forefront of their platform. For comparison: during the height of the pandemic shutdown in April 2020, Twitch had an average of 1.5 billion hours viewed for a time period, while Mixer had a flat 37 million for the same period.
According to CNBC’s Jonah Novet, “Microsoft tried various tactics to help Mixer grow. It wove Mixer into the Game Bar on Windows 10 and delivered a Mixer app for Microsoft’s Xbox One console.” Microsoft has history of operating products at a loss until they become profitable, however even Mixer’s then 18-year-old cofounder noted that the barriers to profit were too great and that he agreed with Microsoft’s decision to close operations.
Let Go and Let Influencers Lead
Obviously, the closing of a platform like Mixer is very complicated and can’t simply be attributed to just bad influencer strategy alone, however for the sake of discussion today, let’s pretend that is it was solely responsible and in fact, bad.
Influencer marketing is something that just about every consumer-facing brand in the world is better off with in a social media-driven world. Not only do consumers trust the influencers they subscribe to inherently, but they react to their authentic content in a more engaged fashion than they do with sponsored advertisements from the same influencer.
This means: pay an influencer to promote, and then let them run with their own content ideas. It’s important that they intertwine your brand message into their most authentic content, in order to be truly received by their audience.
Microsoft’s over-the-top, high end production with Ninja’s PR announcement felt phony, and not the content that Ninja’s own audience had grown to expect and love from him.
Another noted issue with Microsoft’s user acquisition plan in terms of influencer marketing is the over reliance on major streamers.
Sometimes, marketers overestimate just how much an A-List celebrity DOES NOT drive conversions. Kylie Jenner may have upwards of 200 million Instagram followers, but also likely an extremely abysmal conversion rate for any sponsored ads, outside of her own cosmetics brand, because she doesn’t have that sort of relationship with her viewers.
Similarly, it’s possible Microsoft could have benefitted tenfold from a diversified influencer strategy by bringing on micro-influencers (those who have circa 10,000 subscribers or less,) who tend to have much higher conversion rates and intimate relationships with their viewers.
Not only that, but often micro-influencers will work with an established brand like Microsoft for free or near-free, given the propensity to build their brand and leverage the PR.
Let’s Do The Math
Consider this mathematically: If Ninja has 16 million subscribers, and 1% of them follow him to the new platform, (a somewhat generous and aspirational conversion metric,) he would have driven 160,000 new users to Mixer.
Alternatively, let’s say you have 100 micro influencers who all have 10,000 subscribers each, (for a total of 1 million subscribers.) Each of these influencers manages to convert 20% of their followers into Mixer users. These micro influencers would drive 200,000 new users to Mixer — 40,000 more than the major tier, single influencer.
From a cost perspective, we know that Microsoft paid Ninja somewhere between 20–30 million dollars for an exclusivity deal. Let’s say instead, they paid the micro-influencers $3,000 each.
Using our example, that means they would have paid 100 influencers $3,000 each, resulting in a final cost of $300,000. That is a whopping difference of $25 million in influencer spending for a larger user adoption conversation rate anyway!
In A Perfect World
Of course, this is assuming that conversion is even across the board and everything goes according to plan, (our 20% conversion rate for micro-influencers is likely a bit high; I would recommend closer to 10–15%). However, you can see that the massive difference in cost alone would make a diversified, micro-influencer strategy more worthwhile for a brand to consider.
An expanded micro-influencer strategy, backed by referral rewards or a social media challenge to drive word-of-mouth marketing would be our first recommendation at Werner and Media for a major user adoption campaign for a new consumer technology product.
Build A Community, and Integrate It
One other consideration that Mixer could have benefitted from, (again, in our scenario where marketing was the problem and not operation costs,) would have been integrating social aspects into the product in a more “must-have” way for end users.
We asked Khunshan S. Ahmad, Co-founder at InsideTechWorld, who noted: “Microsoft’s Mixer is a platform for gamers to stream their play. The platform failed to perform up to its expectations and eventually shut down. It’s not that Mixer lacked technological advancements, but it lacked a significant component compared to other platforms like Twitch and Youtube when it started. It wasn’t social enough for followers to communicate with streamers. It did not focus on building a community.”
Consumer technology companies must focus on building out both IRL community that coincides with community ON their platform itself, for ideal user adoption and marketing fulfillment. Want to figure this out for your own brand? Get in contact with us here.
Although Mixer was plagued by operational costs and internal issues that couldn’t have been solved by marketing alone, it’s a fun case study of how influencer marketing done poorly can fail to drive user adoptions, and how you don’t need a massive marketing budget (like Microsoft,) to be able to leverage influencers for your brand.
Remember, consider micro-influencers first, let them run with their own content ideas when it comes to integrating your brand message, and offer them alternative payment methods such as giving them free PR, or otherwise free content or goodies they would love to share with their audience.
Need more inspiration and ideas for your media plans? Follow us on Twitter for more media industry news and how-to’s.
Did you like this content and find it useful? There’s a whole lot more where that came from, and it’s coming to your inbox once a month. Subscribe here! 📩💥
Werner and Media is a media consulting firm that helps entrepreneurs and founders, marketing leaders, and media investors make wise decisions. Get in contact with us here.