In the past two decades, the marketing industry has undergone significant transformations with the introduction of revolutionary new marketing techniques, from targeted ads to search engine optimization. These transformations have been largely propelled by the rise of the internet and social media, which have not only allowed companies to reach their customers through an entirely different medium but have also leveled the playing field for all companies, making low-cost and effective marketing strategies available to companies of all sizes. One marketing strategy that has accrued mass popularity is influencer marketing. This form of marketing involves the use of ‘influencers’ or people with a significant following on social media platforms who endorse a company’s products or services to their followers.
The landscape of the influencer marketing industry has changed drastically with the introduction and increased use of platforms like Instagram and Youtube. As little as a decade ago, the influencer marketing industry was restricted mainly to celebrities and people who were viewed as experts within their respective niches. Now, however, the doors of influencer marketing have been thrown open to the people and the industry has experienced gradual democratization as anyone can gain followers and become an influencer. But why is it exactly that influencer marketing is becoming so popular? How does this medium of marketing compare against more traditional methods? And what are the implications of the rise of influencer marketing?
What the Data Says
Over the past 6 years, the influencer marketing industry has registered impressive upward growth, going from a market size of $1.7 billion in 2016 to $13.8 billion in 2021.
This rise coincides with the pandemic and the subsequent increase in the use of social media platforms, as well as the hike in TikTok influencers. This steep incline mostly represents, however, the effectiveness of influencer marketing — according to Influencer Marketing Hub’s 2020 report, influencer marketing has an average ROI of $5.78 for every dollar spent. This means that brands who employ influencer marketing as part of their outreach strategy gain, on average, $5.78 in earned media value (EMV) for every dollar they spend. The same report showed that some brands even earned up to $18 for every dollar spent. To put this into perspective, brands earn $2 on average from paid media platforms like Google Adwords.
For obvious reasons, this form of marketing has since become very popular amongst companies. According to Influencer Marketing Hub’s 2021 report, 62% of the 5,000 firms that were interviewed said that they intended to increase their influencer marketing budget over 2021, while only 7% said they actually intended to decrease it. These findings are especially important considering that they came after a year of the pandemic and shed light on how drastically it impacted the marketing industry.
The Pull of Influencer Marketing
On the consumer side of influencer marketing, there is little doubt that this method of marketing can convince individuals to purchase a product.
So what exactly is it about influencer marketing that manages to pull in customers? One of the biggest reasons why is perhaps the foundation of the industry itself: trust. Consumers trust influencers, who they see and interact with on a near-daily basis far more than they trust words on an ad that encourage them to buy something. Since many influencers build their brand by showcasing snippets of their lives on their platforms, it is natural that their followers feel as though they ‘know’ and can trust the person behind the screen.
Additionally, when consumers see something being used by these influencers, they are more convinced of its merits. This is demonstrated by the fact that nearly 88% of consumers trust online recommendations as much as those they receive from friends or loved ones. Thus, despite the fact that the influencer in question is virtually a stranger to their followers, there is a considerable element of trust involved that makes this model tick.
But that is not all — again, by virtue of the very nature of influencers creating interesting and engaging content, they appeal to consumers far more than the average advertisement. Think about it: when consumers see a regular ad, their instinct is to immediately close it. With influencers, on the other hand, consumers want to discuss and engage, revolutionizing the way through which advertisements can reach consumers.
Implications of Influencer Marketing
Putting aside the efficacy and pervasiveness of influencer marketing, there is a darker side to the industry. Many have argued against the hold that this form of marketing has over consumers, citing the adverse impacts of influencer marketing on younger audiences in particular. According to the Royal Society for Public Health, 90% of young people use social media every day — young people at significant risk of being influenced by what they see.
There was significant controversy on social media regarding the promotion of diet pills by influencers and celebrities, including the likes of Kim Kardashian. This is just one example of many in which influencers use their fame and status to promote something that is harmful to their audience. While it is obvious that not all influencers are bad, what is concerning is the ease with which they can convince followers to buy a product.
Additionally, the main idea that many influencers are anchored by is the gorgeous and aesthetic lifestyle they promote, often shown through a rosy filter or after significant photoshopping. While it can be argued that the entire industry is based on the promotion of this kind of lifestyle and this might even be the reason why people follow them in the first place, it can also promote a sense of dissatisfaction or yearning amongst their followers. These feelings can lead people, especially more vulnerable followers, to buy the products promoted by influencers more readily, in the hopes that they can achieve the same unrealistic lifestyle.
Looking at it from the flip side, many influencers have taken to using their platforms to discuss important issues, including the mental health problems they themselves struggle with while doing their jobs, and many brands have taken note of this to curate campaigns that revolve around mental health awareness. For example, Maybelline came up with the #BraveTogether campaign to raise awareness on anxiety and depression. Of course, this raises the question: is this merely a ploy to increase sales? While there is no clear way to determine the net good or bad of influencer marketing, there is certainly reason to stay cautious of the products promoted by them as the industry continues to boom.