With over 133 million followers on Instagram, Selena Gomez is a hot ticket. Charging a reported $550k for a promotional post, an endorsement from Gomez is one of the most sought after in the business world. It is a signal of a new age in marketing, and one in which brands are bypassing traditional methods of advertising in favour of newer, online methods.
Influencer marketing is a type of marketing in which the focus is placed on influential people (celebrities, journalists, industry analysts etc.) as opposed to the overall market. While celebrity endorsement is not a new phenomenon, its advantages have become more acute in the age of social media. Through ‘liking’, ‘sharing’, and more complex data analytics, businesses are now able to identify popular response towards their product or service with greater accuracy.
Over the past five years, influencer marketing has established itself as a core tenet of most business marketing platforms. According to a report by Linqia entitled ‘The State of Influencer Marketing 2018,’ 86% of marketers incorporated influencer marketing into their strategies last year: 92% of whom found it to be effective. Moreover, 39% of marketers intend on increasing their influencer marketing budgets this year, compared to 5% that plan to decrease. The overwhelmingly positive response among businesses towards the adoption of influencer marketing suggest that these changes are not a trend but a transformation in the marketing landscape.
The dominance of social media means that there are now more channels by which a company can engage with consumers. Influencer marketing agencies facilitate this engagement by offering ‘campaign management’ services on popular platforms including YouTube, Facebook, Pinterest and blogs. Among the most popular of the new-age influencer marketing agencies include Blogfoster, a Berlin-based company that has since expanded into the UK and tallies over 32,000 bloggers and influencers in its database. It appears that expansion is the name of the game for these agencies, many of which have received multi-million dollar investments from outside investors.
Why has influencer marketing proven to be so popular? For one, there is an organic connection between the influencer and their following. As a result, marketers can tap into a pre-existing foundation of trust between consumer and influencer, and one in which the business may not yet have. Another factor is consumer fatigue towards traditional marketing campaigns; print placements, television advertising and outdoor billboarding are becoming increasingly ineffective because of their inability to capture consumer attention anymore.
However, as the industry matures and more players join the field, influencer marketers will be facing greater challenges this year. As part of the broader pivot towards digitalisation in marketing, observers predict that more businesses will automate their influencer marketing in a bid to separate themselves from the pack. While automation may reduce marketing costs for a brand, it can be wasteful if it is does not target the right demographic. Automation would also diminish the personal element of influencer marketing and therefore risks a loss of consumer trust in the same way that traditional advertising has faced.
This year will provide the clearest indication yet as to whether influencer marketing can withstand the tumultuous changes occurring in the marketing sphere. Strong global recovery is, however, a promising sign and companies with more dry powder will likely reinvest into such marketing strategies.