Influencer Marketing: What Is It and Statistics Behind This Growing Marketing Strategy
Gain insight into influencer marketing and find out what are other marketers focusing on.
Influencer marketing has become a prominent strategy for many brands. Its popularity is still rising, and it doesn’t seem to be slowing down just yet. Let’s look at what does influencer marketing mean and what are the current statistics and trends.
What is influencer marketing?
Influencer marketing is a type of marketing that involves product or service endorsements by individuals with social media following.
It’s a collaborative effort between brands and influencers. To gain access to an influencer’s audience, companies offer an incentive:
· monetary reward
· affiliate fees
· product samples
· discount on product/service
According to Influencer Marketing Benchmark Report 2021 by Influencer Marketing Hub, brands more often give influencers free products rather than give them financial compensation.
There are other types of benefits that companies offer to influencers, but these are the most prevalent.
Who is an influencer?
Explained in the simplest way possible — influencer is somebody with a social media following. Influencers grow their following organically by providing value — entertainment, expert opinions, etc.
By consistently creating valuable content, influencers gain trust of their fan-base and are therefore able to successfully market to them.
Influencers are divided into segments based on the number of their followers. Influencer Marketing Hub recognizes these types of influencers:
Micro-influencer: less than 15,000 followers
Regular-influencer: 15,000–50,000 followers
Rising-influencer: 50,000–100,000 followers
Mid-influencer: 100,000–500,000 followers
Macro-influencer: 500,000–1,000,000 followers
Mega-influencer: more than 1,000,000 followers
For more influencer types, check out this article by Upfluence.
Why is influencer marketing important?
Influencer marketing is derived from one of the most powerful marketing tactic — social proof.
Receiving recommendation for a product or service from a beloved creator can largely impact someone’s buying decisions.
Of course, the audience is well aware that it’s a promotion and that the influencer received compensation. That’s why it’s crucial to pick an influencer that has a trustworthy reputation among his/her supporters.
If done right, companies can get access to the right target audience without having one of their own. Even if companies have their own following, with influencer marketing they can widen their reach and increase awareness of their brand.
Is influencer marketing effective?
To answer that question, let’s look at some statistics.
Note: Most of this information is from Influencer Report 2020 (Collectively) and Influencer Marketing Benchmark Report 2021 (Influencer Marketing Hub).
Based on the Influencer Marketing Benchmark Report 2021 — influencer marketing is expected to reach a worth of $13.8 billion this year (an increase from last year’s $9.7 billion).
Influencer Marketing Hub questioned more than 5 000 respondents (brands, marketing agencies, PR agencies, and others). From those respondents, 90% of them expressed a positive attitude towards influencer marketing, and 62% plan to spend more on influencer marketing in 2021.
Based on the Collectively report, marketers say that 70% of influencer content performs the same or better than brand-produced content.
How much do brands spend on influencer marketing?
Commonly, brands invest around 10% of their budget.
Even in 2021, 38% of marketers intend to spend 10–20%, and 11% are planning to invest as much as 40%.
To translate it into numbers, 49% of brands spend less than $10,000 in a year; on the opposite end — 8,6% spend more than $500,000. The rest is somewhere between $10,000 and $100,000.
What are the most used platforms for influencer marketing?
Instagram is at the forefront when it comes to influencer marketing. Even though it has fallen from last year’s 80% to 68%, it is still the most popular platform among influencer promotions.
Compared to last year, Tik Tok has gained a lot of popularity. In 2019, only around 7% of brands invested in influencer marketing on this platform.
Note: This number is from the Collectively report, so there’s a difference in the number of respondents.
1. Instagram — 68 %
2. Tik Tok — 45 %
3. Facebook — 43 %
4. Youtube — 36 %
5. Linkedin — 16 %
6. Twitter — 15 %
What goals are brands focusing on when collaborating with influencers?
Increasing sales is not the only objective of an influencer marketing campaign. Here’s how marketers marked sales, awareness, and user-generated content based on importance.
· increase sales (33.6 %)
· brand awareness (33.5 %)
· create a collection of user-generated content (32.8 %)
What to look for when choosing an influencer?
In the Influencer Benchmark Report, 45% of marketers said that audience relationship is the most significant factor.
It makes sense. No matter how big someone’s follower count is, if they don’t have an excellent reputation or engaged audience, it will be really hard to market to their supporters.
The second most important criteria among marketers are rated engagement or clicks (39%), which relates to the audience relationship.
Other factors to consider are content production, reach, content type, and distribution.
Pros and cons of influencer marketing
Here's what you can gain when you add influencer marketing into your marketing mix. On the other hand, there are also a few things to look out for.
pros:
- increase in sales
- brand awareness
- broadens company’s reach
- helps reach a relevant audience
- builds trust in a brand
cons:
- fraud (influencers that buy their followers)
- if an influencer creates offensive content, it can damage the company
- agreement between a brand and influencer must be firmly set, misunderstandings cost money
As with any marketing strategy, influencer marketing can be a success or fail based on your level of research and preparation. Picking the right influencer with the right audience and creating a thorough campaign might be a challenge but it’s definitely worth a shot.
