- 1. Definition of influencer marketing industry
- 2. Advantages and disadvantages of influencer marketing industry
- 3. Facts and figures
- 4. Current best practices
Table of contents
Influencer marketing steadily grew during the last three years, with its market size projected to more than double from 2017 to 2019. In just three years the industry has grown from supporting a rising technique to a must-have of most marketing budgets.
Definition of influencer marketing industry
What began as a technique for advertising via word of mouth (WoM) on social media grew into an industry encompassing its own influencer management companies, agencies, professionals, and federal legislation. Influencer marketing refers to the utilization of a social media influencer to provide advertising or endorsement of a brand to its customers or potential customers. The accounts used generally carry a strong reputation with a relatively large following of 50,000 to 100,000 followers minimum.
Purchase of celebrity endorsements on social media are also common, especially on Instagram. According to research conducted by Activate of Bloglovin, 67 percent of marketers believe influencer marketing campaigns aided them in reaching a larger portion of their target audience.
Overview and development of the influence marketing industry
The formalized concept of this form of marketing began as WoM marketing but then grew very quickly. Originally as simple as asking frequent users to tweet a pre-scripted message, it blossomed into formal agreements for influencers to create original content within brand guidelines. It essentially moved the position of brand ambassador from the in-person promotions field to social media.
The whole industry grew dramatically from 2017 to 2018, with 39 percent of marketers increasing marketing budgets to accommodate the trend. The growth signaled a number of industrial developments:
- The diversity of influencers by follower count. An influencer can have fewer followers, but more clout due to recently joining a social media outlet.
- Influencer cliques that include a brand or topics professional influence marketers
- Increased need and demand for authenticity because honesty is everything in marketing and life
- Increased barriers to entry
- Federal regulations from the Federal Trade Commission released in April 2017
- Co-functioning social media platforms, such as the ability to cross-post from Instagram to Twitter or Twitter to Facebook.
- Quantitative and qualitative assessment tools that let brands view an influencers follower numbers, follower growth, quality of audience, and interactions including how an influencer engages with their followers
Advantages and disadvantages of influencer marketing industry
The main advantages of this modern WoM marketing strategy are extended reach and the authenticity of the brand's messages. This marketing method allows the brand to reach more members of its target audience. It provides honest, original influencer's authored posts, which trigger the emotional buying motive of the audience better than traditional social media advertising posts.
The main disadvantages include increased costs and barriers to entry of both sides - influencers and brands. Increased competition for the highest level influencers created a need for additional compensation. Increased competition for brand ambassador positions created barriers to entry for those internet bloggers interested in becoming social media brand ambassadors/influencers. Additionally, influencer marketing is still an emerging method. Thus, B2B brands at the moment are still hesitated to invest their marketing budget in this new industry. Instead, they are looking for case studies and best practices coming from the B2C sector.
Facts and figures
The blossoming of the field itself creates the relevance. Its growth has become proverbially “off the charts” in nature. For example, in 2017, the global Instagram influencer market stood at USD $1.07 billion. By 2018, it grew to USD $1.6 billion. 2019 projections based on future budgets put the market size at USD $2.38 billion. Its rapid growth has some sources estimating a market size of $10 billion by 2020.
Current best practices
The field now includes cross-channel social campaigns and cross-influence area projects. An influencer in fashion may work with a restaurant chain or traveling resorts, for instance. Cross-promotion also extends the audience reach.
The FTC issued regulations, including those related to brand and partnership disclosure. Blogs commonly include a line at the beginning or end of each partner post indicating their relationship and admitting to any compensation received.
Marketers continue the strategy evolution. This includes continued development of new success measures and analytics that can scale with campaigns. Campaign scaling has become a necessity. Both technology and quality influencer numbers must be able to quickly grow and scale. Leaders in the field have moved from a one-off method to a continual strategy. They now continually use brand influencers to reach customers and improve brand awareness and reputation.