Influencer marketing is mainstream. Worth $1.6 billion and projected to grow to $2.3 billion acording to Statista, it is firmly in the sights of most marketers. What is it and how is it growing?
Influencer marketing is the practice of using a social media influencer- someone with a vast amount of followers and a strong reputation on social media- to support a brand’s content.
Kim Kardashian wearing Calvin Klein underwear on Instagram reached two million likes, compared to 142,000 on the brands Instagram feed. This is the impact of influencer marketing: more reach, more credibility and more consumer trust as products are presented personally.
In a survey of 181 marketers, Marketing Dive found that 86 per cent reported on using influencer marketing in 2017, and 36 per cent planned to increase their budgets in 2018.
The effectiveness of influencer marketing is premised on a brands ability to associate itself with someone who can raise its reputation and authority.
This might sound like celebrity endorsement, and there is a grey area between the two. The key difference is that influencers are social by how they promote things: content is presented as part of a dialogue with fans through social media, as opposed to in an advert featuring a celebrity which is designed to be seen or heard, not interacted with.
Fans of an influencer can comment, like and share posts from influencers, within a community. This isn’t the same for endorsements, presented as a one way message.
An influencer presents a brand as a part of their own message, and by doing so gives it a more personal kind of credibility than a typical advertisement.
Why is there such a discussion about it among marketers?
When anything takes off with as much speed and financial heft as this, it is always met with some skepticism.
The market was estimated to have been worth some $2bn in 2017, and is set to reach $10 billion by 2020. Its growth trumps that of even digital advertising thanks to the growth of the platforms consumers are engaging with.
YouTube and Instagram – the two main homes of influencers -have seen their usage grow. Some 800 million Instagram users “like” 4.2 billion posts every day, and a billion hours of YouTube are watched daily. With this level of usage, it is no wonder that brands are clamoring to get involved.
What is also considerable is the number of young people that are interacting with influencer-heavy platforms compared to traditional media.
In 2015, 18-49 year olds spent 4 per cent less time watching television but 74 per cent more time watching YouTube. Some 59 per cent of 18 to 29 year old internet users have an Instagram account.
What are the challenges with getting it right?
The stats present an undeniably strong case for influencer marketing, but there are concerns.
It is difficult to measure actual returns on the investments made in influencer marketing. This is especially important for brands that are using big name celebrities such as Kim Kardashian, who is rumoured to charge over $500,000 for an Instagram post.
An Instagrammer may have a lot of followers, but their post carries the risk of being forgettable on an endless news feed of content. A “like” doesn’t lead to a purchase, nor does it guarantee interest.
Pairing the right influencer with a brand can have significant financial and reputational costs for a brand if misplaced.
When the main selling point of using an influencer is authenticity, a brand needs to ensure that it is in a position of trust with consumers. This is usually achieved by aligning a brands vision with the right kind of person.
Marketers are also concerned with the level of creative control they have to hand over to an influencer. Influencer’s above anyone understands the sort of content that works best of their audience and this can result in inventive and genuine posts involving brands.
With the considerable fees paid by marketers however, this concern can be understood.
Keeping up with the Kardashians star Scott Disick, who has over 20 million followers on Instagram pasted the instructions given to him by a brand in his caption for an Instagram post, instantly losing any authenticity.
There is also the issue of approaching the influencers themselves. Many of the most popular receive thousands of offers from brands, and will only choose the products that they think are in line with their values.
Once an account is at a certain level, engagement is not as strong and these challenges are underlined.
Markerley analysed over 800,000 influencer Instagram accounts and found that as an influencer’s follower total rises, the rate of engagement (ikles and comments) with followers decreases.
This, factored in with the other challenges, is causing a segment of marketers to approach micro-influencers.
Defined as accounts with less than 30,000 followers, micro-influencers are said to deliver 60 per cent higher engagement in a cost effective way. Their influence is more concentrated.
2018 has picked up from where 2017 left off, continuing the trajectory of brands using the technique.
Performance metrics are likely to become fine tuned as a result of this growth, as brands look for more precision when planning campaigns.
Issue like fake followers- bots bought to boost the number of follows- have largely been sold, but a demand is increasing for stats to measure effectiveness and engagement that drives revenue.
Instagram will most likely continue to hold onto the throne as the choice platform of influencer, but it is not the only social network that people use. Several influencers operate on a variety of channels and brands will start to make the most of this by integrating campaigns across them.
As more people opt for tailoring their online experiences, influencer marketing will continue to prevail as a form of advertising most closely aligned to the habits of internet users.