Back in 2012, unless you were part of an elite circle of need-to-know marketers and exclusive brands, the term “influencer marketing” fell on deaf ears. The general population hadn’t caught on to the trend and marketers were still slow to learn about the industry that was teeming with opportunity. Even in the past few years as influencer marketing gained momentum, it has been considered an arbitrage, meaning that the return on investment has been far greater than the price tag of influencers. Word spread like wildfire during 2016 and early 2017 that influencer marketing was the darling of marketing and a worthwhile investment, and the influencer marketing exploded. In fact, between 2013 and 2016, interest in influencer marketing increased 90x according to Google Trends (Source).
Now a solid decade into its evolution, influencer marketing is embraced as a go-to strategy by the marketing industry as a whole. This comes as no surprise; as of last year, the average ROI for every $1 spent on an influencer campaign in 2016 was $11.69 in earned media (Source). Additionally, 73% of marketers say they have influencer marketing budgets (Source), and brands spent an average of $51k on influencer campaigns in 2016.
In all of its glory, not everyone is convinced that influencer marketing is all that. Has the facade begun to crack and is the genuine nature of this industry starting to emerge? Some experts are predicting the industry’s ever-expanding bubble – predicted to reach crashing down. What are somewithin the next five years – will come
Influencer Marketing Vulnerabilities
Is influencer marketing teetering on edge?
One of the many reasons that word of mouth marketing is appealing to brands is that it is the power packing punch of consumer purchases and retention it holds for them. These gems are appealing, but is the cost of an influencer’s services worth the gain in business, and what are the real costs of this type of campaign?
Like I mentioned above, years ago not many people had caught on to what we now know as influencer marketing, and what the FTC now regulates with requirements of #ad or #sponsored accompanying branded content. Back in the day so-to-speak, brands could offer influencers product in exchange for rendered services such as social media posts or even product reviews, without pushback. Today, however, influencers are recognized as professionals, as they should be, and the cost of services matches their work.
In fact, experts are saying that the cost of influencers has skyrocketed in the past 12 months (Forbes). Although these numbers are rare, “Two top-tier lifestyle Instagrammers, each with a total reach of around one million followers, charge $15,000 and $20,000 respectively for one post.” Cost often ranges anywhere from $100-500 per influencer on a campaign, but some charge up to $1,500 for just one post. Style blogger Danielle Bernstein, for example, demands $5,000-$15,000 per Instagram post. Some of the most extreme numbers come from celebrity influencers like the Kardashians, who are reported to charge $400,000 per Instagram post.
Currently, there isn’t a cap for setting influencer fees. Will the scales tip, or will the whole industry bust if companies can’t afford the services?
WOMM: Stable, Growing, and a Worthy Investment
Nothing could be further from the truth. It’s important to remember that influencers have been around for eons, but social media is the new game in town. Influencers have replaced traditional advertising which turned the influencer of the past into celebrities. Now, influencers are rising in ranks slowly through social media. A select few make celebrity status, and they can demand a high premium for their services because companies who hire them will see a huge return on investment for social posts. Plain ‘ole influencers, micro-influencers, and your everyday peer influencer are abundant, seeking brand collaborations, and charge far less than mini-celebrity and full-on celebrity influencers demanding high premiums for their work.
Younger Generations: Key to the Influencer Machine
Keep in mind that Millennials are vital to consumer culture, retail experience, and brand campaigns. “Millennials have come of age during a time of technological change, globalization, and economic disruption. These factors have given them a distinctly different set of behaviors and experiences” (Forbes). Because of this fact, their access to technology 24/7, and penchant for social media, there is a particular focus on Millennials and Gen-Z in regards to influencer marketing. In fact, 73% of Millennials see it as their responsibility to guide friends, peers, and family toward smart purchase decisions (Fleishman-Hillard PR & Hearst Magazine).
By 2020 Generation Z will account for 40% of all consumers, and they have the average attention span of about eight seconds, yet the entrepreneurial spirit of Millennial innovators, which means that companies need to find unique ways to engage these digital natives. Luckily, 81% of teenagers are on social media – YouTube and Snapchat rising as favorites – so brands know where they can target this audience. The key is “how.”
A recent article on Mashable suggested that the cost of engaging the younger generations through influencer marketing does not need to be high. One of the tactics is to empower teenagers and young adults to “do things themselves.” In other words, get them involved in brand community events, or inspire “DIY influencers to create goods and services that benefit all those involved.”
There are many ways to keep the cost of an influencer program down without having to sacrifice quality. The industry is not going to crash and burn, and it will only keep growing, morphing, and changing with the needs of consumers. Will it look different five or ten years from now? Of course, but so will social media, the platforms and apps available, our relationships with them, and technology as a whole. I say, “Buckle up for a fun ride and utilize this incredible marketing opportunity while it’s available!”