Changes Across the Influencer Marketing Sphere in Five Charts
The early days of influencer marketing were characterized by an inflated price bubble, which kept smaller brands and creators out of the conversation. Now, however, influencer marketing is growing up.
Larger platforms like Facebook and Instagram have developed their policies in ways that allow smaller influencers a greater share of the action, and make them potentially more effective than their mega-influencer counterparts.
Brands are taking notice across the board of these changes in this new sphere, as evidenced by the results of a recent survey by the Association of National Advertisers.
Of the the 158 brand surveyed to examine the state of influencer marketing, 75% of brands use the technique, and of those that use it, nearly half are planning to increase budgets for it in the next year. And of the brands that don’t yet use influencer marketing, more than half plan to start as soon as possible.
Of that percentage that does not use influencer marketing and has no intention of starting, a major factor is governmental restrictions like those imposed by the Food and Drug administration. Health care brands, specifically, must concern themselves with Health Insurance Portability and Accountability Act regulations. Risk and brand-safety issues are also a factor.
The growing drive to standardize influencer marketing has spelled change within influencer marketing; brands are beginning to use self-serve ad tools to find influencers that will work for them, with screening mechanisms for price and brand-safety.
Companies that once worked with hundreds of influencers are also cutting back;
just over half of the respondents in the ANA survey have pruned their collection of influencers to fewer than 25.
As discussed earlier, smaller influencers are now better equipped to participate in this economy; most respondents use either mid-level or micro-influencers with follower counts of under 100k. In its younger days, influencer marketing was frequently seen as a reach play-- the greater the number of followers, the better the brand’s reach. As CROWD has covered, however, engagement now matters more. Facebook and Instagram have changed their algorithms to benefit “quality” content, making posts by micro-influencers more likely to be treated like friends and family content. Co-founder of Collectively Alexa Tonner said that the optics of large followings are simply not what brands want-- or should want. The greatest success, Collectively asserted, can be found within a creative community of people whose careers are built on producing engaging content
A major pain point for clients is deciding who should manage influencer marketing, and how.
Self-serve tools created by influencer marketing tech companies are showing a rise in popularity, and the ANA’s survey found that 87% are using influencer-specific companies. However, those surveyed also said they rely on their internal resources in their in-house marketing teams almost as often as they use external agencies.
In fact, Gil Eyal, CEO of Hypr, previously stated that the No. 1 trend in the industry is in-house influencer marketing teams.
Brands like L’Oréal Paris UK are using their internal teams to craft robust influencer marketing strategies-- specifically, scouting influencers directly through these in-house teams and establishing long-term relationships that extend beyond a single campaign or post. With a longer-term partnership, influencers develop personal investment in the brand, seeing the relationship as less transactional-- a feeling that is easily picked up on by followers on social media.
The maturing of influencer marketing is also complicating its relationship with compensation. Longer-term partnerships require more standardized contracts, and about 62% of brands are paying influencers for “brand ambassadorship agreements.” Within these contracts, influencers speak positively about the brand consistently across their social media platforms. About a third of companies are compensating their influencers with products rather than cash, and a similar fraction pay influencer per-post based on a cost-per-engagement metric rather than an ongoing collaboration.
According to the ANA, of those companies that have calculated how much they spend on influencer marketing, about 62% reported spending under $100,000 per year.
The price of influencer marketing, however, often depends on agencies, which often book influencers in bulk as opposed to per-client or per-campaign. Generally speaking, the cost of influencer marketing has become more manageable over time. Before the burgeoning demand for standardization, marketers could pay $30,000 for basic appearances or up to $100,000 for a set of five pictures. “Some of that was because there was no set standard in the industry,” one influencer agency executive said. “That’s changed.”
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