The Influencer Industry
There’s a lot of different information you need to take in when it comes to influencer marketing. From understanding when to use micro-influencers, to detecting bot fraud…it’s a hot, growing and complicated space.
Yet, it’s the main tactic marketers are focusing on, as a way to give their company’s revenue a boost. According to Business Insider Intelligence, it’s set to be a $15Billion industry by 2022. So let’s take a look at the challenges and trends within the Social Media Influencer Industry.
It’s no wonder the majority of marketers are moving the majority of their spend to support influencer marketing. It appears the ROI is better than any other channel or tactic. For example, take a look at the retail beauty giant Estée Lauder.
In a recent article in Adweek, they explain how the brand is spending 75% of its marketing budget on influencer marketing (Article Link). That’s their total marketing budget, not just digital spend. And they believe it’s directly driving a 9% increase in sales from the previous year.
But as more money is being spent with influencers, it only shines an enormous spotlight on the problems within the social media industry. These aren’t just issues we can sweep under the rug either.
The influencer industry has an enormous $1.3 billion problem according to. Adweek. This is the estimated total amount supposedly thrown away on fraudulent influencers in a single year.
It’s a number we are sure Unilever is looking at too. Their Chief Marketing Officer Keith Weed declared in 2018, whilst at the Cannes film festival, that they are refusing to work with influencers who use bots or have bought followers. It seems harsh, but there is a solid rationale for these actions.
If you allow influencers to falsely boost their ‘influence’ by purchasing fake followers and engagement by bots, you’re driving up the cost on a sub-par influencer with an inflated NPR (net promoter score). For example, it may appear as if they have a reach of 20M plus followers, but if it’s truly closer to 1-2M, you won’t see the same ROI as you would with an authentic influencer. It’s just that simple.
It’s one of the biggest concerns in the industry but it’s yet to be fully addressed. And this is only one of a few challenges marketers and brands need to tackle to make it work for them.
Other Challenges with Influencer Marketing
- Legal Concerns and Issues (FTC Regulations)
- Useless Metrics and KPIs for tracking ROI
- Picking the right platform (avoiding overcrowding)
- Finding the right influencer with the right audience
- Staying up to date on the latest trends/channels to target (ex: Twitch)
- Rising costs due to high demand
As you can see, brands need to tackle more than just trust and transparency for influencer marketing to succeed in the long term. Marketers must find the right people, on the right platform, with the right audience to succeed in driving revenue and ROI. And they need to figure out the best methodology to pay them, given the prevalence of fraud and bots (that doesn’t appear to be going away).
Therefore, what can the average marketer or brand do to help optimize their influencer spend? Forbes hits the nail on the head with their latest article Five Ways To Optimize Your Influencer Strategy. (Especially with number 1!). It’s worth a read in its entirety but here are a few highlights:
- Use performance-based influencers
- Diversifying your channels (blogs, twitter, youtube, etc.)
- Qualify your Influencer Content
- Amplify Influencer Content
- Ensure you have the right metrics and make sure you are continuously monitoring them
So whether you’re just dipping your toe in the influencer ecosystem, or you’re thinking about increasing your spend in this space, there’s a lot to digest before finalizing a strategy.