That’s the number that brands are prepared to spend on influencer marketing in 2020, according to a study by Mediakix. And it’s not going to stop — according to the same report, the number will keep rising, as brands spend up to $15 billion on influencer marketing by 2022.
Influencer marketing — specifically the efforts done on social media platforms like Instagram and Facebook — is a barrier-breaking way for brands to market to consumers.
Brands want to stay at the forefront of consumers’ minds and one way to do this is by seeking out innovative ways to market and advertise to customers. Influencer marketing, which has skyrocketed in popularity, seemed like a win-win for brands. Here was a new channel for advertising and marketing and it didn’t feel like the old, stodgy ones. There weren’t big ad agencies and enormous budgets behind these ads, it was simply a friend sharing a suggestion with their....thousands of other friends. In fact, according to the Edelman report In Brands We Trust, two out of every three consumers say they trust influencers’ messaging about a brand more than the brand’s advertising. That’s a shocking statistic and one reason many brands continue to invest in the influencer strategy.
Why influencer marketing continues to grow
Though it may be feeling growth pains, influencer marketing continues to grow for a reason. The consumer today is more complex than any persona can reflect. With channels like Instagram, a consumer has already aligned themselves with a lifestyle by following the influencer, so brands have a jumpstart on understanding them and hence, can target them better.
According to Forrester’s Beyond The Tipping Point: A Call To Action For Marketers report, consumers are “sceptical of institutions, including established brands.” For big brands, marketing through influencers could seem more authentic to consumers than traditional channels.
Additionally, when brands work to connect with consumers, consumers are more open and willing to share information. Communicating their message through an influencer can feel more personal than through a website or advertisement.
Lastly, the same report states that modern-day consumers are “steadfast stewards of their identity and lifestyle.” Nothing reflects an aspirational lifestyle more than those reflected by an Instagram influencer. Consumers seek to live the same lifestyle of their “tribe” and what better way to do it than by purchasing the same products used by the influencer they follow.
“Google searches for influencer marketing grew 1500% over 3 years.” The State of Influencer Marketing 2019: Benchmark Report
So, influencer marketing continues to be as popular as ever with seemingly great results. But how brands are measuring those results is where we start to see the cracks in the strategy.
The downside of influencer marketing
One downside to the influencer marketing strategies we commonly see today is that brands and marketers have no ownership over this channel. They get very little data or insights beyond a pile of likes or shares from a given campaign. Furthermore, if a brand were lucky enough to convert some of the audience into a sale using a coupon or affiliate code, they are still leaving a massive percentage of interested consumers on the table.
For the majority of the audience that may be interested in the brand but aren’t ready to transact, how does the marketer reach them again? They'd have to get out their check book, re-engage the influencer, and battle an algorithm for more reach and frequency, which can be costly.
Another issue is that influencer marketing has grown so large, many influencers are feeling the pains of that growth. Some have taken to artificially inflating the number of followers they have, a metric which brands typically rely on. Whether it’s fake followers or following anyone and everyone, if the followers don’t or can’t engage with an influencer, they aren’t likely to buy whatever a brand is selling.
To be successful, brands need to create strategies that overcome these hurdles. They should be using influencer marketing to find engaged consumers and convert them into their own databases. That strategy removes barriers like algorithms and hefty influencer and other paid media costs while empowering them to move unknown consumers into a known state within their own database for messaging such as email and SMS. It also allows for smarter segmenting and custom audiences for more effective paid media retargeting.
Here’s how to get a better return on influencer marketing
Influencer marketing doesn’t end after posting on social media — that's just the start of the strategy. Within the social influencer post should be a very strong call-to-action that should be driven by a value exchange.
One example of a value exchange is offering a giveaway that requires the followers to fill out a form. That form data goes directly to the brand, where they can then target that follower using their own messaging. Users get a chance to win in exchange for willingly sharing their data with a brand.
Over time, a brand can start to see which influencers have actual influence over an audience. Influencers that are able to generate large piles of entries get a contract extension; those that underperform are cut. The value of entries can also be measured by analysing the zero-party data asked for in the sweepstakes survey or poll. Are the influencers with more entries actually reaching the target audiences? Maybe an influencer with less entries is actually driving more sales. Measurement, data analysis, and clarity are what brands need when building an influencer strategy.