Is Influencer Marketing Dead In 2019 ?
Influencer marketing was a thing unheard about just five to ten years ago. Brands are authenticating their presence in the social media sphere by moving beyond the boundaries of the corporate strategy. 86% marketers have ventured into influencer marketing. This is due to the crazy fact that 71% millennials look towards their trusty mobile phone ads to make any purchase decisions.
We have all seen how SEO, Facebook marketing and email marketing pushed brands out of obscurity and turned them into household names. But will influencer marketing be able to hold up for long or just faze out like all the other marketing techniques? 67% of brands are focusing the full impact of their influencer marketing techniques on their intended target audience with the main objective of boosting their online presence and hitting mainstream bubble of popularity with little effort. What was once an obscure concept, unbeknown to the consumer, has now become quite real. Most influencers are flaunting their endorsements with staunch honesty and their followers are seemingly enjoying that.
Influencers are becoming increasingly popular. But that still leaves the questionable doubt in our mind if it is here to stay?
Financial handshakes behind the scenes between brands and influencers are becoming a reality. It may lead us to believe if there is a major change coming in the influencer world. It is quite natural for marketers and researchers to assume that because any marketing tactic peaks for a while and then loses its popularity with a gradual decline. Will that happen with influencer marketing? That is the only question in our mind, which we will explore in detail in this article.
Giving Credit To Critics
Influencer marketing is doomed. The prestigious Harvard Business Review was the hailer of this bad news in 2014. They explained in detail why this new trend was going to fail. According to the finer points of their research :
“…there’s good reason to believe that it’s all a waste of time and effort. While the idea of influentials may be intuitively convincing, there is very little, if any, evidence that they actually can improve performance—or even exist at all.”
This article, alongside many others, made several good arguments that needs to be addressed. Namely, the measure of the ROI and the actual influential power of influencers.
The ROI Argument
Can we really measure the ROI of influencer marketing ? Well not exactly, or may we say accurately. The efficiency of influencers marketing on the popularity of a brand or a product is a tough thing to measure. We have all heard that brand pays Kylie Jenner a cool $1 million for each of her Instagram post. Who is to say if she really brings a million worth of business to these brands?
A simplistic way to calculate your return on investment as a percentage of your marketing budget is this:
ROI = (Revenue growth – Ad budget)/Ad budget
The main problem with this approach is correctly attributing the revenue to the one caused by the marketing effort (and thus loss of revenues if marketing effort are not undergoing). You need to understand how your business organically grow, how your customers naturally churn, the seasonality of your revenues, competing businesses and their marketing efforts … it is quite a headache to take everything into account, and even then, there is no guarantee of accurately measuring anything.
To simplify this calculation, it is a much better to move the argument towards a comparison of marketing budget between channels. We can simplistically assume that an impression (or an ad view) for a targeted demographic has the same revenue potential and just compare the cost of one thousand of these impressions, or CPM.
We conducted a study consisting of 200 influencers and 5 diverse brands, and here was the average CPM variation of either using influencers or simply boosting posts across multiple social media platforms for a given demographic.
The result is quite striking, with a micro-influencer costing up to 7 times less than a more traditional marketing channel. The reason being that influencers, or rather micro-influencers dealt 9 out of 10 times with gifts from the brand. While these gifts have certain value for the customer and the influencer, its cost is much lower for the brand. Not only that, but influencers generally did multiple content for the same campaigns. Doing in general at least one post and two stories in the sample we analyzed.
This gap widens further when you consider that cold advertisements are now at the bottom of the list where the quality of impression is concerned, with influencers topping the board with their huge and specially targeted followers.
Regardless of the ROI argument, you can be assured that if you invest your resources with the right influencer, it can be an excellent market strategy. It can be much more effective than if you would choose an Instagram or a Facebook ad. In simple terms, a company with a similar budget as yours might eventually steal your market share and popularity by accessing more consumers through influencers.
That is of course not to say that any influencer is good for you and will create a return. A report done by NeoReach in collaboration with InfluencerMarketingHub showcased that the median return per 1$ invested in influencer marketing is 5.2$. But as you can see on the graph below, there is a humongous spread in the distribution of this return.
Influencer marketing is complex, throwing money at influencers won’t just do. A careful vetting and selection of these influencer to make sure that their audience demographics, location and engagement is in line with the brand is necessary. Only then you can ensure that you are not wasting your money and effort. And there are many tools that can help you in that task, the Snikpic app being of course one of them.
The Influencer’s Authenticity Argument
A recent study by Harris Interactive stated that 19% consumers value influencers due to their authenticity and reliability compared to 21% for cold advertisement. This should definitely mean that influencer don’t actually influence anyone right?
Well not exactly. It is true that Gen Z consumers often form their own opinions on a product or service. It is also true that younger audience are becoming less and less naïve about brand and influencer collaboration especially if they feel that their feelings are being exploited. But this doesn’t mean that their purchasing decision and opinion cannot be influenced. This is why the main shift in influencer marketing is not too much about how efficient influencer are becoming but rather who are the actual influencer, which is precisely the topic we will consider in the following sections.
Taking A Good Hard Look At The Market
When looking at the statistics, it is doubtful that influencer marketing is going to die out soon. Influencer marketing spending by companies is estimated to reach $13.5 Billion by 2022, with an immense compound annual growth rate of around 40%.
Over the last 3 years, there was a whopping 1500% increase of the keyword search “Influencer marketing” on google alone, with more than 61,000 research per month. This is of course considering only English based search alone. In the coming years, more than half the companies have plans to increase their budgets for influencer marketing. The main reason being that it has the power to boost ROI considerably more than any other traditional marketing strategy currently in use. When interviewing more than 800 marketers, more 92% of them considered influencer marketing as an effective form of advertising.
Brands are spending more and more money on influencers and when you have brands like Daniel Wellington, who have influencer marketing to thanks for his business empire, you cannot ignore the allure of why businesses are dying to align their brands with influencers with major fan following.
Not Dying. Evolving.
A Study by Harris Interactive found that while 19% do trust influencers’ opinions, 50-70% lean towards recommendations and reviews that are unbiased and presented by close acquaintances and other customers of the brand
For Gen Z, the voice of the common man carries much more weight than a celebrity who wouldn’t think twice about the product they were endorsing the moment they stepped out of the studio. Gen Z proceeds to transform consumer behaviors and marketing strategy, intent on needing social proof before spending money on even a donut. This millennial influence has given rise to a new breed of influencers with authentic voices, who provide unbiased reviews and high-quality content. This new form of engagement has completely evolved the influencer circle with people gaining popularity in the social circle due to the acutely specific content that they choose to promote
This idea of massive usage of micro-influencers is not new. In early 2001, Jonah Peretti (creator of Buzzfeed) and Duncan Watts (sociologist and Microsoft researcher) published in the prestigious Harvard Business Review with the idea of Big Seed Marketing, in which they were not really interested in influencers but rather gaining power through ordinary people. They hypothesized that to reach common people, they had to target the masses and encourage them to share. Only then a viral chain can be born and as people generally tend to lean towards the recommendations of close friends and acquaintances more, there is a potential of success with marginal improvement. Buzzfeed was born from this collaboration and this idea.
So What Does It All Really Mean?
With new trends emerging every day in the marketing industry, it is only natural for some tactics to go extinct. Influencer marketing has exploded with the influence of social media boom since 2004. 15 years later, it is still as relevant as the first day but not without some failures and controversies for some brands. For instance, Kat Von D’s stance on vaccination didn’t win her any awards and while Jeffree Starr’s beauty empire continues to flourish, his stance on racism and previous statements remain a mark on his reputation. That’s doesn’t necessarily mean that influencers are going to die out. Although the arguments presented by critics are quite compelling to consider, they are much more steeped in personal opinions than in hard facts.
So does that mean influencers are a dying breed? When looking at the exposes and opinionated rants, the booming and upward climbing trends indicate a simple answer: NO.
Influencer marketing is far more complex than any other marketing strategy. However, companies needn’t throw their money blindly away at influencers and pray that it works. It is an intricate process of choosing the right influencers with the right following and an aura that resonates with your brand. Only then can success be ensured.