What is an Influencer?
  

Influencers seem like all the rage now on social media channels. Chances are that if you spent time online recently, you most likely heard someone self-proclaim themselves as an “influencer” promoting a product or service.  Nevertheless, what exactly is an influencer?  The definition states that any person can influence potential buyers of a service or product by discussing, promoting, or making recommendations on social media.  Does this make everyone on social media an influencer?  We all can influence online, right?  Not exactly.  According to industry experts, influencers are made up of different people.  They can be celebrities, experts on different topics, people who impact social media, bloggers, and content creators.  Not only that, but most people agree that a minimum of 1k followers is needed on a specific channel to be considered an influencer.  Many have millions.  The most followed influencer who is not a celebrity is a Brazilian comedian @whinderssonnunes, with a whopping 58.7 million followers.  Wow!  

 

How do Influencers affect marketing? 

With the substantial growth of social media, influencer marketing is becoming necessary.  According to Forbes, 90% of people are more likely to trust a recommendation, even from a stranger on the internet. Influencer marketing goes hand in hand with Word-Of-Mouth Marketing. 13% of all annual global spending is due to Word-Of-Mouth Marketing, roughly about $6 trillion.  In 2021 alone, $3.7 billion were allocated to influencer marketing, a more than 30% increase from the previous year.  This tactic is rapidly growing and becoming one of the most effective social media strategies in effective marketing.

Furthermore, 26% of people will avoid a brand if someone they know tells them about a negative experience.  Those who choose to participate in some sort of influencer marketing tactics must make customer experience a top priority.  This means addressing any complaints in the most efficient way possible.  How many of you have stopped supporting a brand based on poor customer service you received?  Or have you continued to purchase more items after receiving outstanding customer service?  For example, I filed a warranty claim with two sneaker brands because I felt the shoes fell apart too soon.  One brand did not respond to my claim or comment on my Instagram post.  The other evaluated the claim quickly, and politely said it was not covered under warranty, but offered a 20% discount on a future purchase.  Guess where I purchased my new pair of sneakers? Speaking of Instagram,  89% of marketers selected the platform as their preference, followed by YouTube.  This new way of reaching customers can vastly affect their purchasing decisions.  Brands have to know their target audience and ensure they are partnering with influencers who align with their values and can connect with these people. 

Influencer vs. Celebrity Marketing

As previously detailed, Influencer marketing is marketing efforts through online influencers. This includes social media users and content creators with a relatively large following and, as the name suggests, can influence their followers’ thoughts and thus buying behaviors. Companies have recognized the power of these creators’ posts and the level of influence they have over consumers, so they created a new form of marketing that is innovative and relevant to our technological society, utilizing social media influencers or SMI for short. While influencers are often perceived as having celebrity status, companies are explicit when it comes to influencer marketing versus celebrity endorsements. One main difference between the two is the level of influence these users reportedly have over their followers. 

Influencers are viewed as “regular” people who have gotten a large following on social media; they aren’t in Hollywood films nor topping the billboard charts. They are relatable and are viewed as credible due to their relatability. Social media influencers have taken the digital world by storm and have become consumers’ most trustworthy spokesperson for brands and products. The divide between Hollywood’s 1% and the everyday consumer leads to a disconnect when consumers see celebrities endorsing products that they more than likely do not use.

Companies and brands do not view celebrity endorsements the same as SMIs as the two strategies return vastly different levels of consumer reach. Influencers are commonly content creators on multiple platforms, refer to What platforms do influencers use the most and Why for more information, while celebrities typically stick to one or two channels that their team or the brand chooses. Influencers have the advantage of an audience at their fingertips whenever and wherever they may be. An influencer can commit to a brand deal on Monday and have the sponsored content posted by Saturday. There aren’t extravagant photoshoots, video shoots, inflexible schedules, etc. that need to be worked into the timeline, unlike many celebrity endorsements.  

Source: https://www.businessofapps.com/marketplace/influencer-marketing/research/influencer-marketing-costs/ 

Not only are SMIs gaining more reach and influence with followers, but these strategies and campaigns are more cost-effective for brands. It is not uncommon for celebrity endorsements to cost brands upwards of $50 million. Beyonce famously signed a contract with Pepsi worth $50 million, David Beckham landed a $160 million deal with Adidas, and Taylor Swift earned $26 million when she endorsed Coca-Cola. These are just a few of many celebrity endorsements that cost brands millions of dollars, often with less reach than influencer endorsements. In comparison, Mega influencers with over 1 million followers charge approximately $10,000 for sponsored posts. Macro influencers charge between $5,000 and $10,000, while smaller influencers charge anywhere between $100 to $5,000. The rates charged compared to the content’s overall reach lead brands to choose influencer marketing over celebrity endorsements as they are more effective and cost-efficient.

How to Develop an Influencer Marketing Strategy 

So what are the four key steps to developing a successful influencer marketing strategy? 

1. Research Your Platforms

First, you must research to determine which social media platforms to focus your strategy on. In many cases, it is recommended to align your platform to the industry in which you are in. For example, Facebook is an excellent platform for lifestyle brands, Instagram excels in targeting travel and fitness consumers, Twitter leans more towards technology and finance enthusiasts, Pinterest caters to design and beauty consumers, and LinkedIn has proven to be an effective platform for legal and IT industry professionals. 

Source: https://www.insightsmediasolutions.com/social-media-marketing-services/ 

2. Establish Your Objective, Set Goals, and Create Metrics 

Take a look at what your brand’s needs are. Do you want consumers to align with your brand values? Are you looking to increase visibility to a new demographic? Is your brand launching a new product or service? Influencer marketing can be incredibly helpful as influencers can reach both broad and niche audiences depending on their followers. Consumers see influencers as more relatable than celebrity spokespeople because they can appear relatable and conversational to their target audience. 

Once your needs have been identified, set goals around your campaigns and determine key performance indicators (KPIs) so that you can track the success of your influencer-driven marketing campaigns. For instance, you can track affiliate link clicks, sales revenue, or traffic streams to get a better understanding of whether or not your traffic is being driven by your influencer campaigns. 

3. Set a Budget for Campaigns 

Unlike automated campaigns, influencer-driven marketing requires time and effort to develop relatable and organic content. This may mean that your influencer spends hours creating multiple deliverables such as stories, grid posts, or video material for your requested campaign. Depending on the influencer’s target audience and follower count, you should consider a rate that coincides with the level of engagement that the influencer typically garners. Many brands also include affiliate commissions based on a certain percentage of sales that develop as a result of the influencer campaign.

Source: https://99firms.com/blog/influencer-marketing-spend/#gref 

4. Conduct Outreach to Find Your Target Influencers

Take a closer look at influencers on the platforms you wish to market on. Who are the influencers that sell similar products or services to your offerings? Which ones seem professional and trustworthy? How successful is their engagement? Once you have determined influencers that resonate with your brand and target audience, proceed with your reach-out. For smaller level influencers, known as micro-influencers, this can be via direct message. If your chosen influencer is more established, you should consider reaching out to their business email or website contact link. 

How has Influencer Marketing Made an Impact Within the Industry?

Influencer marketing has increased tremendously over the past decade, with brands and influencers collaborating to enhance the company’s growth. As previously mentioned, influencers are individuals with a significant following who work with different brands to showcase new products. According to Influencer Marketing Hub, the influencer marketing industry has reached a total of $16.4 billion in the year 2022. From 2016 to 2022, there was a 711.76% market increase. The reason for this growth is due to the popularity of the following social media platforms such as Tik Tok, Facebook, and YouTube.

With the growing popularity of influencer marketing, companies that support this growing industry have also increased. In an article written by Jacinda Santora from Influencer Marketing Hub, Santora states that “influencer marketing related companies grew 26% in 2021 to 18,900 worldwide.”

With Instagram being the preferred social media platform for brands to engage with their customers through influencer marketing, in 2021, the company Zara was the most mentioned brand on Instagram. Zara reached over 2 billion people and has over 300,000 mentions on Instagram just through influencers. Also in 2021, Netflix was the highest mentioned brand within Tik Tok with over 10,000 mentions, while Steam was the most mentioned brand within the YouTube platform. Steam reached over 76,000 mentions and over 1.1 billion views in the year 2021. Brands are leveraging working with influencers because they say it is relatively more affordable. Influencers charge far less compared to the average famous person. 

As we can see, influencer marketing has made a positive impact throughout the years on many different brands. Attributing factors are the reliability of social media platforms through the advance technology, affordability of micro and macro influencers vs. your average famous person, and the authenticity factor of the product to the customer. Many consumers rely more on influencers because they view them as genuine and not fake. 

Influencer marketing has made a positive contribution to the lifestyle niche such as beauty, music, photography, shows, fitness, etc. Influencers with a big following work with different brands that align with their values to increase the influencers’ following along with increasing company growth. In turn, the influencer is providing product reviews by testing the product life or publishing recorded content, to increase brand awareness and sales. Santora is projecting the value of social commerce sales to reach a total of $2.9 trillion by 2026 through all the technological advancements. 

The Value of Influencer Marketing

Many people are flocking toward becoming an influencer not only for fame but to be part of a booming industry. The influencer marketing industry was worth $14 billion in 2021 (a 42% year-on-year increase from $9.7 billion in 2020) and is projected to exceed $16 billion in 2022. Influencers are broken down into five categories strictly based on their follower count on social media platforms. This is tricky for some brands because many accounts that appear to be legitimate are actually run by bots or the content creator has paid for their followers and like count. However, an influencer with authentic and engaged followers will generate a better Influencer Media Value than a content creator who is lacking in content and engagement.

1. Nano influencers: between 1,000 and 5,000 followers

2. Micro-influencers: between 5,000 and 20,000 followers

3. Power or mid-tier influencers: between 20,000 and 100,000 followers

4. Mega influencers: between 100,000 and 1 million followers

5. Celebrities: more than 1 million followers

The next steps: Evaluate your influencer marketing strategy. (KPIs- ROI)

Influencer Marketing Strategy KPIs are brand awareness, engagement rates, website traffic, lead generation and conversion rates, sales, and return on investment. The ultimate goal of collaborating with influences is to create brand awareness and have higher traffic toward engagement and purchase. The best way to measure engagement rates is to keep track of several different metrics which include: 

• Clicks

• Likes 

• Shares 

• Reactions 

• Comments 

The same goes for website traffic; as an influencer creates content about a specific product, consumers will likely research the brand by visiting the website, reading reviews, or even purchasing the product. A brand must gain an influx of website traffic after a paid advertising campaign is posted. Conversions can refer to sales, subscriptions, downloads, or newsletter sign-ups. Brands want to stick with and invest in influencers that bring in the most revenue so it is important for brands to constantly adjust their campaign to pinpoint the collaborations that are proving more effective. This will aid in investing in the right channels to improve conversion rates in the future. Conversion rates can be tracked through:

• Promo codes – influencers use a unique code.  

• Affiliate links – use to track sales generated by each influencer.

• UTM links – create a unique, trackable URL. 

Source: Influencer Marketing ROI:: How to Calculate (contentmarketinginstitute.com) 

Is influencer marketing a sustainable strategy for the long term?

There’s no doubt that influencer marketing has had a positive impact on various brands across the market. Up and coming brands as well as popular ones have created brand awareness and revenue through social media influencers. In the next year, 63% of marketers will increase their marketing budget and will spend over $4.62 billion per year on influencer marketing resulting in a 25% increase between 2021 and 2023. Brands will always continue to use influencers as long as they continue to add value to their business. The influencer marketing landscape is constantly changing and many consumers are starting to distrust the content influencers are posting. The amount of social media ads from influencers has skyrocketed over the past decade as brands target specific influencers based on their type and price. 

However,  paid advertisement posts can consume social media platforms which can be upsetting for some as the brand’s authenticity is questioned. If an influencer is constantly sponsoring different brands, their loyalty towards a specific product is questioned as consumers try to understand if the content they post is genuine and authentic and not a ploy to accumulate money. It is estimated that 7 in 10 users are likely to unfollow an influencer for disingenuous endorsements. Another factor that brands must be aware of is spotting the difference between an actual influencer’s page from one that is controlled by bots. About 55% of Instagram followers are real people and the other 45% are bots or inactive users. Identifying these inauthentic users has been a rising struggle for brands as it makes it difficult for brands to gain new consumers or increase their revenue by collaborating with an influencer that has no reach. With these factors involved, it is safe to say that influencer marketing might not be a sustainable strategy in the long term.