Influencer Marketing Continues Its Ascent, Topping $3 Billion In Spending
Even during slow periods when company ad spending is more frugal, influencer marketing is a continuing ROI go-to when advertising strategies need the most bang for their buck.
Based on recent trends, influencer marketing is showing itself to be consistent, and it is forecasted that the industry is only getting better, according to an August eMarketer report.
“Our inaugural forecast shows that US marketers will allocate nearly $1 billion more to influencer marketing this year than they did in 2020, representing the strongest spending growth in the industry since 2019,” the eMarketer report said. “Growth will continue in double-digits until 2023, when spending on influencer marketing campaigns will approach $5 billion.”
Many brands had long underestimated the value of creators in their marketing mix, but this appears to no longer be the case. The research shows how most brands today have incorporated influencer marketing into their media plans, and many intend to allocate even more funds to their strategy in the near future.
Breaking Down the Numbers
One key insight from the eMarketer study shows that 67.9% of US marketers from companies with 100 or more employees will use influencer marketing in 2021, up from 62.3% last year. In 2022, that figure will rise to 72.5%.
“The pandemic has played a major role in driving wider adoption of influencer marketing,” said Jasmine Enberg, an eMarketer senior analyst. “After an initial pause in spending in H1 2020, marketers quickly resumed and even increased spending, as budgetary constraints and studio closures curtailed traditional ad production.”
Although 2020 saw some decline in influencer marketing spending, it was already bouncing back by the start of 2021. A Business Insider report explained that this rebound happened because the pandemic accelerated many long-term shifts within the social media landscape, affecting social commerce, live streaming, short-form video, and newcomer social audio. Clubhouse and TikTok helped propel these influencer rebounds, as well as the strong, continuing success of Instagram and Twitter.
Furthermore, by 2021 it is reported that influencer and other paid content will represent 20% of US agency and marketing professionals’ digital ad budgets in 2021, according to a recent study by Advertiser Perceptions.
Wherever you get your influencer marketing statistics, they are all close in alignment with each other. The upward trajectory looks inevitable if marketers know where to look for the right influencer.
So, Which Influencers Really Work?
We talk about this often – choosing the right influencer is strategic and requires a healthy dose of trust once a brand partners with one, or a series, of influencers.
Using influencers provide flexible strategies, especially as they try to rebound from the 2020 pandemic slump. Advertisers are using influencers for more reasons, from awareness to driving sales. Advertisers want deeper engagement with their target audiences, and they look to influencers for audience receptivity and newsworthiness (word-of-mouth is always a solid way to increase brand recognition and sales).
Insider Intelligence explains that the pandemic sped up influencer marketing’s trend toward “unfiltered” or less-scripted content, especially with the rise of TikTok and the popularity of the “everyday influencers” who populate the app. Because of these trends, brands are increasingly tapping micro-and nano-influencers, kidfluencers, gaming influencers, and virtual influencers for marketing opportunities. These influencers may have smaller followings, but they have more follower engagement and garner a considerable amount of trust.
Here are a couple of quick definitions of influencers that are considered valuable without huge price tags:
- Micro-influencers: Someone who has between 1,000 and 100,000 followers. While their following may be small, their authenticity and engagement are high, creating closer-knit online communities with a lot of trust.
- Nano-influencers: Someone with fewer than 1,000 followers who have immense influence with a comparatively narrow niche. Much like micro-influencers, this group has a close-knit community.
Bigger brands may drop some real money on a celebrity influencer, but that can be a risky endeavor–often, the celebrity overshadows the brand. Brand engagement is also more passive with someone who has millions of followers. It’s not so much a community as a stage performance.
Smaller influencers can oftentimes produce much bigger results without the drama attached to celebrity status. At the same time, marketers need to trust micro-and nano-influencers to maintain their authenticity, so micromanaging is not a good idea.
Marketing professionals need to remember that even micro-and nano-influencers are becoming brands in their own right, and marketers should treat them as such.
“Think of creators as publishers and focus on finding relevant audiences and building relationships, eMarketer suggested in a May 2021 report.
Brands can do this by focusing on reach and niche. Targeted reach provides cost-effectiveness, engagement, authenticity, and accessibility, and they all go up as follower count goes down. Brands can also leverage relevant niche influencers to target audiences more intentionally. Specific targeting creates closer engagement.
Although influencer marketing is more accessible and is growing steadily, brands need to remember that it is still a strategy, and it is important to choose influencers who reach certain target audiences and are a good fit for the brand.
The number of followers an influencer has (and even their impressive metrics) is not enough to determine success. Building any relationship takes getting to know each other before taking it to the next step. But with the proper research and a solid vetting process, brands can see real success with better ROIs when they have the right influencer relationships.