FINANCE

Partnerships – there are some that work, and there are some that do not. Yet, like all partnerships, it takes a while to figure out exactly where you stand.

Published

4 years ago

May 19, 2020

While relationships between influencers and brands have long been a thing, it’s the digital age which has posed a new challenge; freedom. Freedom for people to say what they like with an infinite reach, posing the questions as to whether brand partnerships are the match made in heaven that they once were.

When you scratch the surface, influencer marketing works. It provides 11 times the ROI when compared to traditional digital marketing, and 83 per cent of consumers say they trust peer recommendations over advertising. Importantly, influencers have a niche, engaged following which brands are often unable to target without investing into an influencer campaign.

A new form of advertisement

Influencer marketing has risen to prominence as consumers become savvier to traditional advertisements and switch off. Audiences simply do not want to be bombarded with messages day in day out, and it’s estimated that 11 per cent of the global internet population use some form of ad blocking software, with 615 million devices registered as running ad blockers.

As consumers switch off from ads, marketers have changed their approach too – using influencers to target audiences with a subtler approach.

Audiences may skip an ad on YouTube, for example, but if an influencer is then talking about a product in a sponsored video, it reaches consumers in a more natural advertisement form.

Advertisements often have negative connotations to them and are associated with mistrust and the notion that brands are just trying to sell a product. While influencer marketing is also used as a sales tool, it has a more trustworthy element to it.

Building a brand, trust and engagement

Relationships are built on trust, and for consumers to buy into a brand trust needs to be the foundations on which the partnership is formed.

Traditional media is deemed as a less trustworthy source by consumers, yet the same product could be included in an advertisement and an influencer, and it’s highly likely that a consumer will trust this source more. Essentially, influencers are the bridge between taking a brand and turning it into a trusted brand.

Are businesses falling out of love with influencers?

In fact, one study found that 74 per cent trust sources such as blog and online communities more than brand advertisements when it comes to sourcing product information.

Which leads to the question, why? It’s the notion of recommendation and hearing someone share a product or service from somebody who consumers feel is just like them with the same lifestyle, values, and needs.

In the era of fake news, consumers think why would the ‘boy/girl next door’ falsely advertise a product? What benefit does it have to them to lie? Of course, influencers are often paid for their work and ASA requires them to disclose on their channels when they have been paid to talk about a brand or product. However, not all follow this guidance and disclose their ads, and it has led to calls for greater transparency and regulation over influencer campaigns.

There is then the need to balance transparency with disclosure. If the point of an influencer campaign is to target consumers in a non-ad way, then giving it advertisement status could then have reverse effect.

The fear of losing control

Traditional advertising forms can be controlled – brands are able to oversee the whole process and control it from start to finish, yet when it comes to influencer campaigns it’s often only the initial brief which a brand has control over.

It is this balance that brands need to get right – providing freedom to influencers to create content which stays true to their personal brand and is content which their audience will engage with, but also reaches the brand’s goals and desired outcomes.

Influencers know their audience. They know the types of content they like and dislike, whether a blog post, video or social media posts works best depending on the product or service being promoted and have the creative ideas on how to execute campaigns in a unique way. Similarly, companies know their brand. They know the tone of voice it needs to maintain, the goal that needs to be reached and how their brand should be positioned.

Restrict how an influencer creates their content and it’s likely that it won’t engage their audience and look out of the ordinary when compared to non-sponsored content. The beauty of an influencer campaign is that it is intended not to stand out, and designed to look like any other recommendation, sponsored or not.

Unbiased recommendation with fact

Consumers are turned off from hearing about how great a product or brand is, and there is the need for unbiased, informative recommendations – a job for an influencer. There is also the need for fact – something which brands can provide.

It is this balance between recommendation and fact that can make the relationship between influencer and brand work, and the campaign a success.

Influencers should have creative control over how the campaign looks – they know their channels and audiences best – and brands should be able to inform the campaign goal and provide the factual basis of what is required.

How important are influencers to your product or brand?

Brand and influencers – a relationship with trust

Influencer campaigns are still a relatively new marketing strategy, so it’s no wonder that it is a process and partnership that isn’t without its differences. Yet, this relationship is a work in progress and one which should be bound by trust by both parties.

Trust in an influencer that they will execute the campaign according to the set goal and deadlines, and trust from a brand that an influencer will create content which aims to engage their audience and meet the set goals.

For an audience to engage with an influencer campaign, then the content needs to be relevant and of the highest-quality, and for this to happen the initial relationship needs to be strong.

This is a guest blog and may not represent the views of Virgin.com. Please see virgin.com/terms for more details.

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FINANCE

Global debt balloons to record highs

Published

12 months ago

May 25, 2023

The San Francisco Telegraph

It’s now $45 trillion higher than its pre-pandemic level and is expected to continue growing rapidly, a top trade body has warned

The global debt pile increased by $8.3 trillion in the first quarter of the year to a near-record high of $305 trillion amid an aggressive tightening of monetary policy by central banks, the Institute of International Finance (IIF) has revealed.

According to its Global Debt Monitor report on Wednesday, the reading is the highest since the first quarter of last year and the second-highest quarterly reading ever.

The IIF warned that the combination of such high debt levels and rising interest rates had pushed up the cost of servicing that debt, prompting concerns about leverage in the financial system.

“With financial conditions at their most restrictive levels since the 2008-09 financial crisis, a credit crunch would prompt higher default rates and result in more ‘zombie firms’ – already approaching an estimated 14% of US-listed firms,” the IIF said.

Despite concerns over a potential credit crunch following recent turmoil in the banking sectors of the United States and Switzerland, government borrowing needs to remain elevated, the finance industry body stressed.

According to the report, aging populations and rising healthcare costs continue putting strain on government balance sheets, while “heightened geopolitical tensions are also expected to drive further increases in national defense spending over the medium term,” which would potentially affect the credit profile of both governments and corporate borrowers.

“If this trend continues, it will have significant implications for international debt markets, particularly if interest rates remain higher for longer,” the IIF cautioned.

The report showed that total debt in emerging markets hit a new record high of more than $100 trillion, around 250% of GDP, up from $75 trillion in 2019. China, Mexico, Brazil, India and Türkiye were the biggest upward contributors, according to the IIF.

As for the developed markets, Japan, the US, France and the UK posted the sharpest increases over the quarter, it said.

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FINANCE

Nigeria takes step to combat fuel shortages

Published

12 months ago

May 24, 2023

The San Francisco Telegraph

The West African country has built a giant oil refinery to cover domestic demand

Nigeria will commission its new Dangote Petroleum Refinery on Monday in hope of alleviating the chronic fuel shortages that have turned Africa’s biggest oil producer into a fuel importer.

The processing plant, which has capacity of 650,000 barrels per day, is expected to cover all of the country’s fuel demand, according to Nigerian media.

Built by Dangote Group, a conglomerate owned by billionaire industrialist and Africa’s richest man Aliko Dangote, at the Lekki free trade zone near the city of Lagos, the refinery is being touted as a way to end the country’s reliance on imports for nearly all of its refined petroleum products.

The giant complex is one of Nigeria’s single largest investments. It comprises a 435-megawatt power station, a deep seaport and a fertilizer unit. Initially, $12 billion was earmarked to build the refinery, but the project ended up costing $19 billion after years of delay.

Crude processing is scheduled to begin in June, although the research consultancy firm Energy Aspects said that commissioning was an intricate process and that the facility may only start operating later this year. It is expected to reach about 50-70% of processing capacity next year and full capacity by 2025.

The refinery will produce Euro-V quality gasoline and diesel, as well as jet fuel and polypropylene, the company said, adding that the facility was “designed to process a large variety of crudes including many of the African crudes, some of the Middle Eastern crudes and the US Light Tight Oil.”

Despite being Africa’s biggest oil producer, Nigeria imports petrol, diesel, and processed petroleum products because many of its own refineries have dilapidated over the years.

Russia accounts for lion’s share of India’s oil imports – Reuters

Dangote expects the new plant to cover Nigeria’s domestic fuel needs and produce extra volumes for export. It is also expected to boost the market for Nigerian crude to $21 billion per year, the company added.

The Nigerian National Petroleum Corporation has a contract with Dangote to supply some 300,000 barrels of crude per day. However, theft, pipeline vandalism, and underinvestment poses a threat to achieving full output, economist Kelvin Emmanuel told Reuters.

In April, Nigerian oil production slumped under 1 million bpd, below Angola’s output, data showed.

According to Emmanuel, Dangote might be importing oil from international trading companies such as Trifigura and Vitol, as the refinery has not yet signed agreements with oil majors in Nigeria.

Meanwhile, Energy Aspects expects the Dangote refinery to not only solve Nigeria’s fuel shortages but also to reshape the gasoline market in the Atlantic basin.

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FINANCE

US will default if debt deal fails – treasury secretary

Published

12 months ago

May 24, 2023

The San Francisco Telegraph

The current borrowing limit is a constraint on Washington’s ability to meet its obligations, Janet Yellen insists

America’s chances of paying its bills after June 1 are “quite low,” US Treasury Secretary Janet Yellen warned on Sunday in an interview with NBC’s ‘Meet the Press’.

According to Yellen, if Congress fails to reach an agreement on raising the country’s $31.4 trillion borrowing limit by that time, it will be forced to default on “some bills” shortly after.

“There’s always uncertainty about tax receipts and spending. And so it’s hard to be absolutely certain about this, but my assessment is that the odds of reaching June 15, while being able to pay all of our bills, is quite low… My assumption is that if the debt ceiling isn’t raised, there will be hard choices to make about what bills go unpaid,” Yellen said.

The treasury secretary did not say which ‘bills’ she had in mind, but noted that the government’s most immediate obligations range from paying interest on outstanding debt to “obligations to seniors who count on social security, military, contractors who’ve provided services to the government.”

She added that “there can be no acceptable outcomes if the debt ceiling isn’t raised.”

The administration of US President Joe Biden and Republicans led by House Speaker Kevin McCarthy have been at an impasse over raising the debt ceiling for several months, despite warnings that the US could face its first-ever default unless it is raised by June 1.

Republicans are refusing to agree to the move unless Biden agrees to government spending cuts and curbs on social programs.

Some lawmakers have called on Biden to invoke his powers under the 14th Amendment to the Constitution and bypass Congress and unilaterally raise the debt ceiling. However, Biden told reporters on Sunday that while he has considered doing so, there is likely not enough time before the deadline.

Biden and McCarthy are scheduled to meet again on Monday to discuss the matter.

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