Meet Mike Sharman: Advertising visionary helping to spark a revolution

This is the Rational Perspective. I’m Alec Hogg and in this episode, the online influencers who are revolutionising advertising. Marketers have long known that we listen more carefully to the advice of those we trust than the messages of corporates trying to sell us their wares. So, for decades they’ve drawn on endorsements by celebrities, primarily movie stars and athletes to generate additional sales. As anyone who has watched the latest series of the hit TV show and my favourite Strictly Come Dancing, we’ll be able to agree that the look and feel of those personalities has changed dramatically. The digital age is ushered in a fresh army of influencers, authentically independent individuals including previously unknown YouTube video heroes or Twitter superstars. As their influence mushrooms, so has their ability to turn this newfound fame into cash. Some South Africans were amongst the world’s first to spot what has now become a global trend. Five years ago, Webfluential was launched in Johannesburg, a business which now represents 35,000 global influencers with a reach into well over a billion people. They have 35 agencies around the world that they work with. I caught up with co-founder Mike Sharman in Sandton.

So, the one piece of marketing jargon that gets thrown around a lot is storytelling. And for us we talk about it as story selling because we feel that you have to tell an emotional story to connect with the target market and stories can follow all sorts of different means. It can be humorous. They can be traumatic. They can be something that resonates with you as an individual. We’re seeing it a lot recently with the types of marketing that’s coming out, the stuff that was so well received by Nike last year and how the ‘just do it’ has kind of evolved to where it is now and actually leveraging people that are outspoken characters within each of their industries and each of their disciplines. The most recent furore has been around Gillette and talking to men in particular about being better men. So, those are all emotional drivers that aren’t engaging with target markets and where the brands are using an influencer to tell that story or using that person within the storytelling process. There are new ways to reach your target market and your customer. And as a businessman, you ultimately want your target market to feel something for you so that when someone is standing in the grocery store looking at your FMCG product, they make the choice of your deodorant or your milk product because there’s something in your communication that has made me feel like I’m aligned and your brand resonates with me.

Business people just want people to buy more of their products, that’s kind of the bottom line, but take it to the next step.

Back in 2010, I came back to South African from the UK and launched Retroviral. So, Retroviral’s focus was a very niche part of advertising. We were focused on amplification and what is known as earned media. So, what we did was we worked with brands such as Nando’s, which was one of our first clients back in the day. And in the past when something topical happened, Nando’s produced a poster and that poster was paid for to go into a newspaper e.g. Sunday Times, City Press, The Sowetan or whatever it may be and what we suggest to them was, there’s a huge untapped market within the social space on the Internet. So, why don’t we take those posters and seed them via important characters in the online space? So, this was like the humble beginnings of influence and marketing before the category existed. And on a Friday afternoon when they launched one of their first posters – that was around the time Julius Malema was making comments around shutting Twitter down because there were all these fake Julius Malema profiles on Twitter. And Nando’s came out with the poster ‘WTF Juju? LOL’ and we put that on the Internet. We shared it via social media influencers and one of my personal blogs alone got 10,000 unique views on that afternoon. And collectively, with some of the influencers who had shared it, we pretty much got more than about one hundred thousand eyeballs on that poster without them spending a cent on paying traditional means to distribute that content. Now with the Internet you can go a lot quicker, you can be a lot more topical, you don’t have to wait for the Sunday print run or a specific date deadline or date. Now you can just push it out immediately and we know that since then those posters now only exist in the social space and, and customers expect it. And fast forward to three months later when we worked on the first video campaign for Nando’s, we seeded that content to online eyeballs, hundred thousand views in six days and then a year later, it was the campaign that we’re most famous for was that ‘last dictator standing; campaign’. So Black River made the content. Then we needed to come up with a solution to get it out there to be seen by as many people as possible. So, we took three Mugabe lookalikes and they delivered the campaign to 50 online influencers across South Africa, Joburg, Durban, and Cape Town. And that created such a snowball that the brand got 2 million views in the first week of that campaign being live. And that was without a cent being spent on media. Then the ad got banned on TV because it sparked some questionable utterances about Mr Mugabe and that then aided in the support of getting more and more eyeballs in the online space because obviously it couldn’t be banned on the Internet. It still exists on the Internet.

And the great thing about that was that there was the formula of eyeballs, but then there was also the emotional connection with the brand and driving people and feet through stores. So, at the time Nando’s could measure that the campaign led to a 25% increase year-on-year in actual sales. So, here we have an actual piece of communication that drives back to dropping cash into the top line and having an effect on the bottom line. And that for me is the most fascinating thing about this world that we play in.

So, hence Webfluential where you’ve spoken about influencers.

So, initially to start off with Retroviral was an ad agency or digital agency that focused on amplification. And this is the business that still exists today. But while we were working within the Retroviral agency space, Murray Legg, David Philip and I were the co-founders of Retroviral and something that we learned from Zuckerberg and the early days was that his mantra within Facebook, and it’s something that’s quite widely documented, is that he was always looking for ways to make Facebook compete with itself. So, there’ve been learnings of forcing people to do presentations only on mobile or throwing laptops out the window if a presentation was done on PowerPoint. It must be done on mobile. And that was one of the things that we looked at. Where can we grow as Retroviral the agency and what can we create as a product that could live alone? And it’s something that could be agency agnostic. So, some of our competitors could use that tool. So, effectively we’re looking at ways to create our agency model as a redundant process to generate something else that could live industrywide. So back in 2013 we launched Webfluential as an MVP, a minimum viable product that effectively collated all of the details of influencers that we worked with at the time and that allowed brands to log on or agencies to log on and to connect with influencers, to work with them on their campaigns, to offer them briefs to allow those influencers to manage their budgets, to manage their commissions and ultimately become more commercialized creators.

Explain that, because it has gone viral in its own sense. It’s all over the world now.

So, influencers will log onto webfluential.com. They’ll create a profile. Their profile then has a media kit, which in my instance is webfluential.com/Mike. I can send out that link to any brands that I want to work with or any potential agencies. Now, I as a creator, don’t have to worry about the work coming to me. I can put myself out there and if someone sees the content that I’m creating on any of my social platforms, they can commission me to work with them on their brand campaign. And the great thing about that is we are using the API’s of the existing social networks. So, there’s an Instagram API, there’s Facebook, there’s Twitter, and by pulling in that data now there’s pure transparency in terms of how valuable you actually are as an influencer.

Because there was a period where people were worrying about followers being bought and likes being attained, but Webinfluential has its own algorithm and that algorithm is based on reach, resonance and relevance. So now the system can look… Oh, Alec Hogg has signed up. You’ve plugged in all of your channels and we can see from there that you actually are relevant within the business space and you have your greater resonance because people are coming and looking at your content and you’re being qualified as an actual influencer in the business space.

Now, you’re qualified as an influencer. Are you then expected to give out the message that Nando’s…? Nando’s is a pretty easy one because it’s very easy to like Nando’s Chicken.

Let’s talk about BrightRock because they sent you to Davos and you know they’re a sponsor of yours. BrightRock would come onto the platform. They would punch in the criteria that they’re looking for the business sector. They’re looking for someone who’s based in South Africa or has an audience in the UK or in America or whatever that may be and they put in all these details. What is your age? Maybe they want 25 to 34’s because they want more millennials taking on their insurance product for example. So, they’d plug in all of those details at the start of the journey. And then when they hit search, the system will generate from most high to least high relevance for that job and for that brief potential people that they could work with. So, Alec Hogg a name that would pop up. You might get one or two other business guys that are in your space. And from there you have the decision to shortlist people you’d like to work on the brief. So, if I’m an agency I can show my clients these are shortlists of people who are relevant and talk to that audience. Or ultimately, I can pick and choose as I like and I can start a conversation with you. Hi, Alec. We’ve seen your profiles because you can click through on all of these elements within the platform and I can say I really like what you’re doing on Twitter. Really like what you’re doing on Facebook. We’d love to commission you to work on a piece for Davos – talking about x, y, and z and then you can have the conversation. The system suggests a rate card for you based on your relevance within a market and based on your peers – what they are charging – and from there, the brand can say, “Cool, I’m happy to pay per tweet or per campaign or whatever that may be”. Or, you might have a negotiation and say, “Listen, I’ve got R100 budget and I’d like you to do x, y, and z” and you can have that backwards and forwards. So, the platform really becomes the facilitator and you’re commercialising these arrangements. The client pays with a credit card. They’ve got their credit card details loaded and once you’ve done the job, you put your links up of the stuff that you’ve posted. We encourage people to share with ad or sponsored so that there is transparency for advertorial over editorial and then from there, you get your payment once you’ve uploaded your links.

How many people do you have on your system?

We have 35,000 influencers from across the world and collectively with all of their networks combined, that’s more than 1.4 billion people.

That’s extraordinary. From a little South African business, as you say, five years ago that you, Murray and David were scratching your heads about.

And you know what’s a great stat, is that 8 millionaires have been made in South Africa from the amount of jobs. Eight people have earned more than R1m each from the briefs on the platform since 2013.

Can you tell us a bit more about them – the kind of people? Obviously, you don’t want to be indiscreet, but just to give us some insight.

So, it’s a mixture really. Some of them are as diverse as photographers and Instagrammers who’ve created beautiful content in that platform and they’ve understood the importance of the mix of still content with video content as that network has grown. One or two business people who straddle the world of agency, freelance and create (so they almost know what sides of the fence they need to play and how to nurture that content accordingly. There’s also been a fashion curator, so they are creating a whole bunch of fashion and lifestyle content and that’s the kind of… the key focus of these people that are getting repeat business. They may be models in some respect, but they have the real understanding of what the audience wants and what their audience in particular is after.

And those are generally the influencers that work the best and get repeat business – is they know their audience so well and they know exactly how to tailor the content that’s come from a brand. So, it isn’t just a copy paste on what the brand wants, but it’s a real negotiation and real understanding that, hey brand, you want x out of this relationship. I understand my audience the most and this is how I’m going to mould content to make sure that it works the hardest for you.

How has the business community taken to this?

The business community has taken pretty well to this. I think if we look at different audiences, there’s always scepticism from journalists because of the breakdown in editorial versus advertorial. But I think that since the early days, we’ve really focused on people being as transparent as possible. Influencers is now an occupation. It’s now a potential way of earning money. And for me, a lot of the stuff that we saw in hours at university in the early 2000’s, a lot of our jobs didn’t exist when I was even at university. So, you can imagine what the world is going to look like in the next five to 10 years. There’s going to be jobs that we could only imagine out of science fiction movies or minority reports and those kinds of things. And there’ve been a lot of people that have gone in with open arms and have said, “Cool, this is an amazing opportunity because now we’re levelling the playing field. We’re showing the transparency. We’re whittling out people that have just bought followers to sell themselves as influencers when they really aren’t. So, we’re giving agencies and brands and businesses the opportunity to log on and work with influencers.

And if you look at how Facebook has done it with a self-serve model, you can be a small business and SME, you can go on and can boost your own product, you can boost your own brand. And that’s what we’re trying to give back to the business community is whether you’re a mom and pop shop, one male/female band and you’re a small business up to that extent or if you’re a large multinational, anybody can use it. And that’s the great thing about the platform.

And the advertisers themselves: how much advertising, how much money is moving across to being focused on social compared with more traditional avenues?

So South Africa’s always one of those markets that are kind of in between your more developed markets and your emerging markets. So, here it’s been a little bit slower in terms of that revolution that you would have seen in the likes of the UK and the other developed markets that you work in but what’s fascinating from a South African perspective is now we’re looking at about 25-30% of budgets going and being dedicated solely to digital. There are clients that we work with at the agency at Retroviral where 100% of their budgets are being spent on digital and they’re not considering the real world anymore because that’s where they’re seeing their best returns. We are working with brands that are launched purely as digital native brands and eventually we’re seeing more and more of the traditional guys thinking less about their TV spend but more around if we spend on TV, how are we working on marrying that content or developing and evolving so that the social spend gives us legs in a different way? It gives us the opportunity to run a campaign with these multiple touch points.

Mark, just explain it. If 30% of your budget is going into digital, how much of that comes to an organization like Webfluential and how much would go to Google and Facebook?

It all depends really. I mean it’s very much case by case. Some brands will find that search is invaluable, some of them will put most of their eggs in the search basket because of what people are looking for, whether it be a food or a product that you’d be looking for on the go in your specific area. In other brand instances, some people just spend on Facebook as there go-to because they know that from a South African perspective, we have almost 20m people on the platform so there, it makes absolute sense. For us, Webfluential spend is always seen as a complimentary or support spend on the back of that. So, we will never suggest just using Webfluential in isolation but rather looking at your marketing mix from a digital perspective. What are you doing from a Facebook or Twitter perspective? What are you doing from a search perspective and optimization thereof and what are you doing with influencers? Because like influencers who sold you perfumes on a billboard or on a flyer at the mall, social influencers aren’t the holy grail. They’re just one touchpoint in an ecosystem of potential spend and I think that’s why we’ve always done well in the space is that we are very transparent and very honest with our clients. We say to them, “Listen, if this is not the right time for you to invest in influencers, let’s rather hold back. If you need to do your social, internal or in-house while it’s cheaper for you to do, then use an agency. Rather build up that spend using your own resources and then once you’re ready to spend more, then let’s talk about all these other touch points, whether it be from Retroviral, the agency or from Webfluential – the influencer support side.

What I’m trying to get at here is again your almost unique, global focus point in Webfluential where you have managed to get, as you said earlier, 35,000 influencers. How many international clients have worked there? And is it like most other parts of the global economy, the biggest in the United States, followed by Western Europe, China, etc.?

So here are some interesting stats for you on this. So obviously, we have an emerging market focus. We’ve just signed a partner in Russia and Dubai last week, but so far, we have 25 partner agencies around the world and of that above and beyond that, we’ve had 3,600 self-serve customers. So, that’s people from small SMEs all the way to the large multinationals or agencies logging on, adding their credit card details and then closing a deal to work with an influencer. So, those partners also pertain to agencies in areas and countries such as Brazil, Nigeria, Kenya, South Africa, India, the UK, USA, Canada, and Slovenia. So those are just some of the highlights from the platform from around the world. And we spoke off-air about it that South Africa is the perfect test bed for start-ups. We have an attractive time zone and we also have this very varied market between your high affluent user and then your lower LSM. And for us, what’s been really interesting is how we’ve seen a real mix of people. Twitter in particular in South Africa, it started out in the early days as being generally your more affluent platform. Someone had a degree or greater in terms of their actual education. Now we’re seeing a lot more of the levelling of the playing field and we’re looking at ways in which people of lower LSM’s have started engaging with Twitter in particular. Because now you have access to cheap byte-sized data via text and it’s almost like it’s the glorified text world of 2019 if we look at the implosion of platforms such as Mxit, which was the be-all and end-all in the early days of smartphone and even pre-smartphone technology (feature phone technology). Now Twitter is the thing that connects so many people. That’s why we look at politicians trying to own that stomping ground from all sorts of parties, all sorts of shapes and sizes and backgrounds and for me it’s been a fascinating growth on that front that now we see people emerging as influencers across these different platforms. Instagram, Twitter, and Facebook: they all have their own personality and their own users off the back of that.

How do you see things developing?

Well, there is a project that we’re working on at the moment and it talks to one of the most important trends that we believe for 2019. If you think about it, who are the most important customers to a brand? The answer is your staff. Internal people. Think about one brand that has 10-15,000 employees. If those employees are happy and they’re spreading positive messages in the market about what your brand is doing, (and we’re busy implementing one of these in a Beta phase with the financial services brand at the moment) … Here are 5,000 or 6,000 people, behavioural change and behavioural economics is a huge part of 2019. We’ve seen it with the launch of brands such as Discovery Bank and the imminent launch of Flow to change rental behaviour. Now, with this financial services business that we’re working with; imagine if you could post content within a closed platform that allows your staff to post and share content across the social media to their one or two degrees of separation network and you can reward those people with good behavioural change with a smoothie or a coffee from your canteen that’s already been subsidised for that brand. Now, you’re giving people almost lack of Vitality experience within the organisation out and you’re telling the world out there how great the organisation is to work with. So, that’s one trend that we’re working on at the moment and a second one, which we’re incredibly excited about is based on the number of images that we have access to with the influencers who are connected via Instagram, for example. There are six million images being uploaded every week onto Webfluential. Imagine we could take that opportunity and now we can commercialise influencers’ images so they can make money off their own stock that they’ve created.

That’s a huge revenue driver. That adds to the creative economy like nothing ever before and those individuals now have the ability to sell product in ways that they never thought they could. And if you think about the one challenge on the African continent, it’s good stock imagery especially when it comes to black consumers. We know how each market in Africa has to be looked at in isolation because of the nuances, because of the backgrounds, the shapes and sizes of all those different individuals. The existing stock sites don’t have images that are truly representative of the different African markets and now we have the ability to plug into… Here’s a Kenyan base of influencers. Here’s a South African base. Here’s a Nigerian base. Here’s a Ghanaian base, etcetera. And that gives us the opportunity to help these creators create more monetizable opportunities and revenue streams.

You’ve mentioned Instagram a few times. You’ve also mentioned Twitter and Facebook. Google Plus seems to have fallen off the tail.

Yeah, they’re shutting it down.

Are you expecting then, that of those big three that are left…which are going to be the big ones in five years’ time? When we look back in five years’ time, will Twitter be the dominant player, or Instagram, Facebook, perhaps even YouTube.

I think Twitter is always a challenge because of the up and downs with their internal politics. And then there’s always the rumours on who’s going to acquire. What’s going to happen next? And I think if we look at all of the platforms, Google’s always hit or miss. That’s why things like Buzz and Google Plus didn’t necessarily survive, but YouTube has got a solid showing and it continues to grow in Africa. Twitter’s kind of flatlined a little bit. Facebook’s growth is incremental obviously, because when you’ve hit your mainstream tipping point, there’s only so far you can grow. But for me, I think there’s a lot more opportunity on the YouTube phase still. Also, Facebook video in particular continues to grow. And then Instagram… Instagram is still on its hockey stick, especially for the South African and African growth and the access now to cheaper data across the continent. The excitement with players like Rain coming to the mix and data and the presentation thereof, so I think that we’re going to see a lot more action on Instagram and Instagram stories in particular, over the next few months. But, you know, it’s this crazy world where something that existed today won’t exist tomorrow. It will be dead. So, for me, I’m not a huge fan of predicting five years in the future, but it’s one hell of a ride and we’re constantly buckling up and listening to the ground in terms of what the developments are in order to pivot and create tomorrow what didn’t exist today.

A young person in the UK Joe Sugg has come from nowhere and he’s now a well-known star through Strictly Come Dancing that he participated in.

He’s working with Caspar who’s from Knysna. Did you know that? Caspar Lee, Joe Sugg’s business partner. It’s an incredible story. There’s a potential podcast for you.

Thank you.

Caspar’s from Knysna, originally and his breakout was becoming a YouTuber. He moved to the UK and he and Joe were involved in all of this buddy-buddy influencer stuff. He and Joe created a lot of the content. Then Joe’s obvious rise to mainstream fame, but he and Casper on this huge trajectory together. Caspar’s sister Theodora-Lee – big influence out of Cape Town herself. Even their mom, now – she’s gained a huge following.

So, who are the biggies here in South Africa? You’ve mentioned a couple. Who’s the Joe Sugg of South Africa?

I’d say Maps Maponyane. He’s one of our big dogs because he’s devilishly handsome. He’s been on the cover of GQ. He’s making absolute waves in terms of his business interest and also from his influencer perspective. He has more of a traditional model approach but geez, he’s got an incredible start-up brain on him and he’s involved in quite a few different projects that are going global. He’s doing a lot of stuff in the US, so he really is one to watch and admire. You know, the likes of Khaya Dlanga: he’s been creating content for what feels like an eternity and across all different platforms.

He started out getting a lot of notoriety and fame from his YouTube sessions. Now he’s a marketing manager at Rain. So, it’s quite interesting to see the things that are coming out of our local market and those different influencers. A lot of the artists and the AKA’s of the world – the Bonang’s. There’s a whole bunch of cross culture and crossover between being a star in one genre, whether it be modelling or TV or film and then moving into the social space. Black Coffee – obviously, he’s doing incredible things across the world, taking his own brand of music and working with the best artists on the planet. I mean, he has the credibility of being one of the best producers in the world right now and that’s hugely exciting.

So, these are role models right here in South Africa for ambitious young talent.

That’s it. Also, Ricky Rick, I mean, now he’s a judge on, on the voice in South Africa, but he’s also one of those guys that really leveraged his success off the Internet. If we look at Cassper Nyovest fill up the dome… So many of these campaigns leverage social media as the wildfire to get action and create talk, the ability to fill things up and to change consumer behaviour. It’s wild. What a time to be alive.

That was Mike Sharman, c-founder of the influencer marketing network Webfluential.

This has been The Rational Perspective. Until the next time, cheerio.