Influencer marketing, as we know it is relatively new. Emerging in the early days of the World Wide Web, and gaining popularity with the rise of social media platforms, influencers are now present in all industries and have made a significant change to the way we understand marketing.
As traditional media outlets struggle to make ends meet, influencer marketing services have been growing steadily, with many companies opting to advertise on popular social media profiles.
Figure 1: The Global Instagram Influencer Market. Source: Statista
The global Instagram influencer market grew from $1.3 billion in 2018 to $2.3 billion in 2020. Brands wouldn't be spending so much on influencer marketing campaigns if they didn't see positive returns on their investments. Most professionals say collaborations with social media stars have helped them generate brand awareness and boost sales.
But, while these numbers indicate that influencer marketing is booming, it’s difficult to ignore murmurs that the industry is in danger of bursting. So, is influencer marketing a safe bet for 2020 and in the future? In this post, we will explain the state of the influencer marketing industry and what can be done to minimize the risks involved.
What does the influencer bubble mean?
Influencer marketing is such a stronghold of the marketing industry and a staple for many brands. It has become so popular and has such powerful effects that everyone from enterprise-level brands to local businesses invest in it. The impact, reach, and ability to drive conversions that influencers have is what has made it so powerful.
The accelerated growth has led some experts to believe that industry has exceeded its intrinsic value. They argue that influencer marketing cannot sustain the high returns that customers are currently witnessing. Projections that the value of the influencer marketing industry will grow to $15 billion by 2022 paired with the fact that nearly two-thirds of marketers plan to increase their influencer marketing budgets this year have led to talks of an economic bubble occurring.
Such stats point to a crowded market, and when this happens, it's easy to worry that people aren't considering the real value. It can also be challenging to quantify influencer marketing. Influencers work to improve brand awareness, but what's the numeric value of awareness? If an influencer marketing campaign isn't linked to sales, then how are brands measuring success?
These arguments favor the concept of an influencer bubble where the sums brands are playing for endorsements exceed the perceived inherent value.
Why are people saying it will burst?
Just like all marketing strategies, influencer marketing has its drawbacks. The craving of influencers to generate an income for themselves has, to some extent, diminished their authenticity. Consumers are now wondering if their favorite social media stars advocate for a product because they like it or are getting paid.
The seeds of doubt are also coming from poorly run campaign reports where bottom-of-the-funnel marketers are only concerned with conversions. This has shifted the focus to the efficiency of partnering with influencers, with many asking what impact social media personalities have.
Does it actually positively impact a brand's sales and image in a measurable way? This is the question on most people's minds, and the truth of the matter is that yes, it does. The reality is that influencer marketing is an advanced form of word of mouth marketing, where influential figures on social media help consumers filter the brand options they come across.
When leveraged properly, social influencers can bring tangible value to a brand in different ways, such as authentic content creation, brand awareness, and comprehensive performance reporting on metrics that go beyond their audience's size.
Why it could burst
Influencers are still doing well regardless of COVID-19. The pandemic may have brought about social distancing measures, making it difficult for influencers to create engaging content for their followers. Brands have also reduced their marketing budgets, and this has also affected influencers.
Influencer marketing trends show that the number of influencers has also been rising throughout the years. There are now so many influencers to choose from, and many of them don’t meet brand standards. The idea of “anyone can become an influencer” has led to people using the term to get more famous and acquire free products without putting in the work.
Businesses appear to be growing tired of endorsement requests from influencers in exchange for exposure. In one of the influencer marketing examples below, a California-based ice cream shop owner vowed to double the prices for influencers having been fed up with their pitches for free products.
Figure 2: Source - Instagram
In his post, ice cream businessman Joe Nicchi said, “We truly don't care if you are an influencer, or how many followers you have. We will never give you free ice cream in exchange for a post on your social media page. It's literally a $4 item…well now it’s $8 for you #InfluencersAreGross.”
There are other failed influencer marketing examples marketers are using to explain why the influencer bubble is going to burst, and one of them is the case of an Instagram star with more than 2 million followers who couldn't sell a mere 36 shirts. Instagram star Arii, real name Arianna Renee, wanted to launch her clothing line with T-shirts as the initial release. Arii assumed that her large following would translate to sales, and she approached a clothing brand for a partnership.
The company told her that she needed to sell 36 T-shirts for her clothing line to be continued, but she didn't hit the target. Following the failed product launch, Renee said that those who had placed orders would be refunded since they wouldn't be making any more T-shirts. She also cited the lack of support (her friends didn't share her posts as much as she expected) as another reason for the failed launch.
Figure 3: Source - Twitter
Her post (which has now been deleted) wasn't met with much sympathy, with many people offering opinions on the marketing fail. One user on Twitter suggested that “influencer marketing is bursting” as the reason for failure.
Upon closer examination, it emerges that the T-shirts didn't really fit with her style, and this rules out the influencer marketing bubble bursting as the reason for failure. The T-shirts were poorly created, and there was nothing unique or creative about them.
As an innovative and inspiring social star, the clothing line didn't match Arii’s brand, and as such, her followers could not connect with the T-shirts. The marketing was also weak and immature, which is why the uptake was low amongst her followers. Therefore, the failure has nothing to do with the influencer bubble bursting as some naysayers believe but has everything to do with poor strategy and marketing execution.
Will it burst?
The world is still struggling with the fallout due to COVID-19. Although this has impacted the market, experts agree that there are still opportunities ahead. Many influencers have used this time wisely to produce content that keeps them exposed to their audiences. Most have pivoted the situation to create content that reflects the current state of their lives. Imagination has prevailed during this time, and brands have been impressed by the quality of the content – so the time spent at home will yield dividends from now on.
Having managed to remain relevant during one of the worst economic times in recent years, it's unlikely that the influencer bubble will burst anytime soon. There have been reports over the last few years that guarantee the bubble will burst soon, but it hasn't. The Wall Street Journal is one of the publications that made this claim, citing the reduced engagements and lower returns on influencer investing as reasons for the collapse.
The article went ahead to point out that influencer fraud – where influencers inflate follower counts with fake accounts – and the consumers’ increasing cynicism when they come across products or services endorsed on an influencer marketing platform as the major factors that brought the golden days of influencer marketing to an end. The brand marketers interviewed for the post said they had pulled back their influencer programs and worked on user-generated content to convert customers and fans into nano-influencers.
The Wise Marketer also wrote about the death of influencer marketing in 2016, citing declining ROIs as the reason most marketers are ditching this tactic for other marketing methods. The article cautions brands that just because people enjoy watching a YouTube gamer playing the latest games on their channel doesn't mean they will buy whatever product he endorses. For this reason, brands are re-thinking this strategy – which means influencers will not be needed anymore for brand endorsement.
The article quotes an interview with an anonymous social media marketer who spent lots of client funds for an influencer campaign that did not yield the desired results. In 2014, the marketer paid influencers $500 to take photos for brand endorsement. The amount rose to $1,500 a few days later, but every time they sat down for a meeting and asked the influencers what they do, they'd say 'influencer.' They decided to end the campaign, and it's at this point, the marketer realized that just because someone has a lot of followers doesn't mean they can translate it into sales for a business.
The article advises marketers to bypass the influencers and build a direct relationship with the customers. They argue that since their customers are on social media, letting go of their influencers will help them save millions of marketing dollars that can be invested elsewhere in their businesses.
But even with these predictions, brands still haven’t given up on the tactic just yet. The amount spent on influencer marketing has been rising ever since, hinting that brands are still seeing the benefits of working with an influencer marketing agency. A recent study estimates the profits made from influencer marketing between $2 and $20 for every dollar spent. This shows just how profitable influencer marketing can be when appropriately managed.
You just need to work with the right influencers who have the right fit audiences for your brand. When you get it right at this stage, you will end up with influencers who will help you tell real and authentic stories about your brand. It would be best if you also took the time to vet the influencers you are working with to ensure they have real followers and that their engagements are authentic.
There are “influencers” who use pods to artificially enhance their numbers to get noticed by brands and earn money. Any campaign with such an influencer is based on skewed data, and this means that the brand will be backing a dud with no real-life audience or actual influence to endorse their products.
Engaging an influencer marketing agency will help you avoid these misfortunes. They can spot fakes from afar, which will ensure you don't waste your marketing dollars on people with no social influence.
Potential to tap into
The reach of influencer marketing is unlike anything else that is available. The right influencer will put your brand before a large and passionate audience, and this will ensure more people get to know about the fantastic products you are offering. This process also takes a relatively short time since the influencer has already done the hard to create a receptive audience that can be tapped into for your brand awareness.
The ROI from influencer marketing is also high, with data showing that businesses can see a return of $6.50 for every $1 spent, which is much better than other marketing methods. This effectiveness has seen influencer marketing emerge as the fastest growing online customer-acquisition method ahead of organic search, email, display advertising, and more.
Figure 4; Source - Tomoson
But for influencer marketing to work for your business, you'll need to understand your business goals, needs, image, and audience before you can find the right influencers to work with. Your influencer posts should come off as authentic for them to impact the audience, which is why you should take the time to find an influencer who matches your brand image and goals. When you find the perfect influencer, it would not be right for you to restrict them with unreasonable brand guidelines as this could limit their ability to have a meaningful conversation with their followers about your brand.
You should remember what attracted you to the influencer in the first place and trust their creative instincts since this is what their audience likes consuming. If you genuinely selected the right influencer, your brand naturally fits into their lives, and their creative approach will definitely be a natural fit. You can have a phase for approving the concept and content, but don't overthink it as this could make it difficult for the audience to connect with what the influencer is offering.
You’ve also got the ability to create brand ambassador partnerships, which act as a public facing entity for your business. Influencer marketing is still changing, just because you understand it today doesn’t mean it’ll be the same in a year. Initiating brand-influencer partnerships is one of the forward-thinking approaches that you should be working to implement.
This strategy will help the influencers feel like part of the brand instead of treating them like tradable commodities. They will develop a genuine enthusiasm for your products, making them great ambassadors for your company. By working with the influencers longer, they'll develop a practical and measured approach when endorsing your brand. Their passion will come out clearly when interacting with their followers.
Influencer marketing also helps counteract ad blockers, which is proven to drive engagement, conversions, and brand connection. With marketers opting for online advertising to reach more people, online users find themselves bombarded with all kinds of ads when surfing the internet. Adblockers have been developed to eliminate these annoying ads, but influencer marketing has not been affected since people willingly follow their favorite social media stars to get their latest updates.
When people love the content of the people they follow, then they come to love their recommendations. This makes influencer marketing a great way to reach consumers with highly targeted endorsement content.
How to make your influencer marketing matter
At atsify, we understand the power of influencer marketing. That’s why we’ve created a new to the world influencer marketing platform that helps businesses make the most of their influencer marketing and influencers become their own bosses.
atisfyreach connects brands to the right influencers with the right audiences at the right prices and times. We use our sophisticated AI, atisfyreact, to do this in a fraction of a second, and give you full control over your campaigns from one centralized location.
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The influencer bubble isn’t likely to burst any time soon. For now, it can form a viable part of your marketing strategy to help you reach more users and improve your brand awareness. The industry is still booming and has proven to be profitable in many cases. There may be a few cases of failed product endorsement campaigns, but these are isolated cases attributed to the lack of proper vetting when choosing the influencers to work with. Brands should steer clear of fakes and frauds, and engaging an influencer marketing agency will help you do this since they know what to look at when choosing an influencer for a brand endorsement campaign.
Influencer marketing, when done well, can be incredibly powerful. It generates higher returns than other marketing methods, making it an excellent option for your marketing. Working with authentic influencers who your target users trust will bring more conversions and sales your way.
The team at atsifyreach can help you create powerful influencer marketing strategies with our database of influencers with over 10 million followers and 30 trillion content views. We will help you define your goals and accurately measure success to ensure you are getting value for money. Get in touch today and let us find you the best influencers to promote your brand.