What is influencer marketing?
Influencer marketing is when companies work with popular people on social media. These popular people are called influencers because they influence or impact many followers and fans.
Influencers share and talk about a company's products with their large number of followers on social media. Their followers often trust the influencer's opinions and recommendations.
So when an influencer promotes a product, their followers are more likely to want to buy that product too.
Companies use influencer marketing to reach new potential customers in a way that feels natural and trustworthy, rather than like a direct advertisement. The influencer's endorsement makes the product feel appealing to their followers.
How does it work?
Finding the right influencers to work with is an important part of influencer marketing.
For example, if your company sells sports shoes and clothes, you'll want to partner with influencers who post about fitness and sports. This way, your products are promoted to people who are likely interested in buying them.
After you find good influencers, you can contact them to try to work together. You may offer to pay the influencer a portion of any sales they bring to your website. So if their followers buy your shoes after seeing the influencer post about your product, the influencer also makes money.
Getting paid for sales they bring in gives influencers a reason to feature your brand and tell their followers about it. This helps spread the word about your products.
Importance of influencer marketing
Influencer marketing is important for several reasons:
Getting precise targeting
Influencer marketing lets companies promote to very specific audiences. If a business partners with influencers in a particular area, they can reach followers interested in that topic.
This is more targeted than general advertising. The message goes to people likely to want the products.
Increasing brand awareness
Working with influencers exposes a brand to a wider group of people. Influencers have many loyal followers who trust and regularly interact with their content.
When influencers promote a brand, they introduce it to their audience. This leads to more awareness and potential new customers learning about the brand.
Creating engaging content
Influencers are skilled at making interesting social media posts that grab attention.
When they feature a brand in their content, it often gets a lot of likes, comments, and buzz from followers.
This sparks conversations about the brand, helping connect with potential customers.
Building trust and credibility
Over time, influencers earn the trust of their followers. So when an influencer endorses a brand, their followers are likely to trust that recommendation.
This boosts the brand's credibility with new potential customers who value the influencer's opinion and want to try the products they promote.
A case study conducted for influencer marketing
In 2014, two companies - Content Marketing Institute (CMI) and Top Rank Marketing - worked together on an influencer marketing campaign. Their goal was to get more people to attend a conference about content marketing. Instead of just advertising, they involved popular people on social media.
They asked the speakers at the conference to share their advice and thoughts on content marketing. This advice was put together into four ebooks.
The campaign worked very well. Many people attended the conference. The ebooks spread helpful advice to potential customers. And the popular social media people got more visibility by participating.
This example showed the power of influencer marketing to provide real value and build trust.
The success of the campaign proved that influencer marketing can work well, even for industries that are not very glamorous or exciting.
What’s the difference between influencer marketing and celebrity endorsements?
Influencer marketing and celebrity endorsements are different in two main ways - cost and measuring results.
Celebrity endorsements mean paying very famous people large amounts of money to promote a brand. But it's difficult to know if spending so much money actually leads to more sales or customers.
Influencer marketing is less expensive because brands work with influencers who are popular in specific topics or communities, not overall famous celebrities. Companies also partner with "micro-influencers" who have smaller but dedicated followings.
With influencer marketing, it's easier for companies to track the impact of their campaigns. They can look at numbers like likes, shares, and online discussions about the product to see if the campaign is effective in reaching potential customers.
So influencer marketing costs less money upfront and allows companies to better measure the actual results and return on their investment compared to celebrity endorsements.
Types of influencers
When choosing influencers, companies should think about how much money they can spend, what goals they have, who their ideal audience is, and how much engagement they want.
There are a few main types of influencers to pick from:
Mega-influencers
Mega-influencers are very famous celebrities with over 1 million followers. Working with them can help spread awareness of a brand to huge numbers of people.
But it is very expensive, and their followers may not be deeply engaged. Though they have massive reach, mega-influencers' fans feel less of a personal connection.
Macro-influencers
Macro-influencers have between 500,000 and 1 million followers. They strike a good balance between reach and engagement.
They have a large following that can increase brand exposure widely while still interacting with fans.
Mid-tier influencers
Mid-tier influencers have 50,000 to 500,000 followers. They allow more precise targeting than bigger influencers.
Mid-tiers usually focus on one specific topic, letting brands reach an audience interested in that area instead of a general crowd. Their followers are also more likely to actively engage with them.
Micro-influencers
Micro-influencers usually have 10,000 to 50,000 followers who are very passionate about the micro-influencers specific niche.
Micro-influencers often have close relationships and trust with this smaller group of devoted fans. Though their total reach is lower, they get very high engagement rates.
Nano-influencers
Nano-influencers have between 1,000 to 10,000 followers. While their audience size is small, these followers tend to be highly loyal and engaged.
Nano-influencers can be valuable for very targeted campaigns or local/community marketing efforts.
Types of influencer marketing opportunities
There are various ways that companies can work with influencers. Here are some common types:
Sponsored content
One approach is having influencers make social media posts that promote your brand. The brand pays the influencer with free products and money to sponsor these posts.
The brand gets advertised in an authentic way through the influencer's content to their audience.
Affiliate links or discount codes
Brands can give each influencer a special discount code or tracking link. When followers use that code/link to make a purchase, the influencer earns a commission percentage of that sale.
This allows easy tracking of sales driven by each influencer.
Contests/giveaways
Companies can team up with influencers to run contests or giveaways on social media. The influencers help promote it to their audience and create excitement around the brand.
Share influencer content
Brands can share content created by influencers on their own social accounts, website, etc. This allows tapping into the influencers' existing audiences in an affordable way.
Brand ambassadorship
This is a longer-term partnership where influencers continuously promote and represent a brand over an extended period through various content and activities.
Product and content collaborations
Brands collaborate with influencers to co-develop new products or create content together like blog posts, videos, and social campaigns - allowing integration of influencer's ideas and expertise.
Takeovers on your platform
Social media takeovers are when a brand allows an influencer to temporarily take control of the company's official social media accounts.
During the takeover period, the influencer creates and shares various posts about the brand from their own unique perspective.
For example, a clothing company may do an Instagram takeover with a popular fashion blogger for one day. During that day, the influencer will post on the clothing company's Instagram account. They might share styling tips, outfit photos modelling the brand's clothes, and more.
This gives the influencer's followers a fresh, genuine behind-the-scenes look at the company through someone they already know and admire.
It creates buzz and allows the influencer's fans to directly interact with and experience the partnership between the influencer and the brand.
Reviews
Influencers frequently share detailed reviews about products from brands they genuinely like and support. They may write blog posts, make videos, or create social media posts thoroughly reviewing and analyzing these products.
People looking for recommendations on what to buy trust an influencer's knowledgeable opinion when assessing a product's quality, features, and whether it is a good value.
When an influencer gives a positive review of a brand's product, it adds credibility and can significantly shape potential customers' views about that business in a favourable way.
Is influencer marketing right for your business?
Influencer marketing can be helpful for both businesses that sell to other businesses (B2B) and businesses that sell directly to individual customers (B2C) when done effectively.
However, there are some important differences:
B2B companies
Influencer marketing is more commonly used by B2C companies than B2B. B2C companies sell products like clothes, food, and technology directly to the general public. B2B companies sell products or services to other businesses.
For B2B brands, it's crucial to carefully choose influencers that are truly relevant to their specific industry niche.
A B2B company shouldn't just partner with any random popular person on social media. They need to team up with respected business leaders that their target companies look up to.
B2C companies
Influencer marketing works very well for B2C companies selling products that everyday consumers buy and use themselves, like clothing, makeup, food, and consumer tech.
Because B2C influencers personally connect with followers about products they actually use, it feels authentic and relatable.
Followers are likely to pay attention to and be influenced by influencers they can relate to and admire. This helps drive more product sales.
Which is the most popular platform for influencer marketing?
According to a survey, TikTok has become the most popular platform for influencer marketing.
It has passed Instagram, Facebook, and YouTube in being used by brands for influencer partnerships.
Over half of companies now run influencer marketing campaigns on TikTok to reach wide audiences. The use of TikTok by brands has grown rapidly.
Instagram is still widely used by 51% of brands. But its previous top position has been taken over by the fast-growing TikTok.
Facebook and YouTube are also still relevant for influencer marketing, used by 42% and 38% of companies respectively.
However, their popularity has dropped somewhat compared to the visually-focused Instagram and the new favourite TikTok.
The data shows TikTok is now the leader as brands shift their spending to take advantage of its huge organic user base for influencer campaigns. TikTok has gained momentum while early leader Instagram has fallen behind.
How can metaverse affect influencer marketing in the future?
The metaverse is a growing 3D virtual reality world where people can interact digitally. Platforms like Roblox and Fortnite are early examples of the metaverse.
As the metaverse expands, it is changing influencer marketing in big ways. There is now a huge $54 billion market for virtual clothes, items, and experiences in the metaverse.
Major brands like Gucci, Nike, and Chipotle have successfully created and sold virtual products in the metaverse. Influencers have also started participating actively in developing the metaverse.
For example, the rapper Snoop Dogg created his own "Snoopverse" virtual space with exclusive content and performances.
The metaverse allows endless new opportunities for brands and influencers:
Influencers can engage their followers through virtual events and experiences
Brands can partner with influencers to make branded 3D virtual spaces, items, etc.
It can take influencer marketing to a whole new immersive level
So the growth of metaverse platforms is enabling innovative and creative influencer marketing campaigns. Both brands and influencers can use these emerging virtual worlds to connect with audiences in brand-new ways.
The rise of influencer marketing
Influencer Marketing Hub conducts a yearly survey to gather the stats related to influencer marketing.
Here we have given some key points related according to their statistics:
Increase in searches for influencer marketing
The term "influencer marketing" has become much more popular in Google searches. This shows that more and more people are interested in and want to learn about this type of marketing.
Since 2016, searches for "influencer marketing" on Google have increased by a huge 465%.
The years leading up to 2019 saw an even bigger increase, with searches growing by 1500% between 2016 and 2019.
Although the rate of search growth has slowed down a bit since then, it still means influencer marketing has become more mainstream and widely known by the general public.
Influencer marketing grew to $16.4 billion in 2022
Influencer marketing has grown rapidly, and this growth was boosted even more by the COVID-19 pandemic. The increase is expected to continue in 2023.
Influencer marketing started relatively small at $1.7 billion in 2016. But it then experienced huge growth. By 2020, the influencer marketing industry had already expanded to $9.7 billion.
In 2022, influencer marketing was valued at $16.4 billion, which is the size experts had predicted.
Forecasts indicate this upward trend will keep going, with the projected market size jumping even higher to $21.1 billion by 2023.
Rise in influencer marketing platforms and agencies
As influencer marketing has become more popular and widely used, there has been a huge increase in the number of platforms and agencies that specialize in helping brands and influencers with this type of marketing.
In just the past two years, 240 new companies focused solely on influencer marketing have been created and entered the market. This follows a similar trend from the previous year when 380 new influencer marketing companies launched.
This rapid growth shows that more and more businesses are realizing how effective influencer marketing can be. There is an increasing need for expert assistance to navigate this new marketing landscape successfully.
Even traditional marketing agencies have had to adapt by adding influencer marketing services to what they offer clients. They are expanding their services to keep up with the changing market demands for influencer marketing.
High Earned Media Value per $1 spent on influencer marketing
Influencer marketing can provide a good return on the money invested through something called Earned Media Value (EMV). On average, businesses get $5.78 worth of promotional publicity and exposure for every $1 they spend on influencer marketing.
While some businesses achieve an EMV as high as $18 for each $1 spent, about 25% of businesses may not see much return or may just break even.
The varying results depend on factors like the strategy for the campaign, which influencers are chosen, how well the influencer's audience matches the business's target customers, and how well the overall campaign is executed.
Budget allocation for influencer marketing and content marketing
Content marketing is very popular now, with over half (59%) of marketers having special budgets just for it.
This number is a bit lower than 70% from a HubSpot survey, but it shows that content marketing is an established and accepted practice. Some companies pay for content marketing from their overall marketing budget.
Influencer marketing has also become very widespread. 75% of those surveyed plan to have a separate budget just for influencer marketing in 2023.
This is a big increase compared to 2017 when only 37% had a dedicated budget for influencer marketing.
Increasing budgets for influencer marketing
Most companies see influencer marketing as a good opportunity. 62% already have a budget for influencer marketing and plan to increase that budget in the coming years.
Only a very small number, 7%, said they want to decrease their influencer marketing budgets or stop doing influencer marketing altogether.
This shows companies are strongly committed to using influencer marketing because they believe it is an effective way to achieve their marketing goals.
How to create an influencer marketing plan?
Follow these steps to develop your plan:
Decide your goals
First, determine what exactly you want to achieve before starting any influencer campaigns.
Do you want to increase brand awareness?
Boost product sales?
Get more social media followers?
Setting specific, measurable goals will help you evaluate if your strategy is successful.
Know your target audience
Research who your ideal customers are and what matters to them. Learn details like their ages, locations, interests, buying habits and product preferences.
This information will guide you in choosing influencers whose followers match your target audience.
Understand the rules
Learn the regulations and guidelines about influencer marketing in your area. Many places require sponsored content to be clearly disclosed.
Following these rules maintains trust with your audience.
Consider the three R's
When evaluating potential influencers, look at the three R's:
Reach - Their audience size and ability to spread your message
Relevance - How well their content fits your brand and audience
Resonance - Their engagement and influence over their followers
Balance all three for best results, reaching and engaging your target customers.
Make an influencer shortlist
Create a list of influencers who could be a good fit, ones who:
Appeal to the people you want to reach
Have an active, popular online presence
Get lots of likes/comments, showing engagement
Share values and goals aligned with your brand
Choose influencers that deeply understand and engage their fans.
Reach out personally
When contacting potential influencers:
Personalize your message to show appreciation for their work
Explain your brand, campaign goals, and benefits of partnering
Be polite, understand their busy schedules, and offer rewarding partnerships
Collaborate on content
Collaborate with the influencer to make content that presents your brand well but still allows them to be creative. Discuss:
What type of content to make
What main messages to focus on
Any rules or suggestions you have
Measure your results
Once the campaign is live, track and measure key performance indicators (KPIs) relevant to your goals.
These could include reach, engagement, website traffic, or conversions. Analyze the data and adjust your strategy as needed to optimize future campaigns.
Tools for influencer marketing
Here are some tools that can assist you in your influencer marketing efforts:
Hootsuite
It offers search streams that allow you to monitor industry-related conversations across multiple channels.
This can help you discover influencers who are relevant to your brand and track their activities to identify potential collaboration opportunities.
Collabstr
It is a free marketplace that enables brands to find influencers based on specific criteria such as platform, niche, and location.
Through the platform, you can communicate directly with influencers, manage collaborations, and ensure smooth delivery of content.
Right Relevance Pro
This tool can identify top-quality content shared by influencers, based on your chosen topics and locations.
By analyzing the quality of their content, you can find thought leaders and potential influencer partners for your brand.
Fourstarzz Influencer Recommendation Engine
This tool provides personalized recommendations for influencers based on your campaign goals.
It utilizes data to predict estimated reach, engagements, and other campaign results, assisting you in creating effective influencer campaign proposals.
Insense
It is a platform that connects brands with a network of over 35,000 content creators. These creators can produce custom-branded content for your brand.
Additionally, Insense offers features like promoting content through Facebook and Instagram ads, optimizing content for Instagram Stories, and utilizing an AI video editor to create multiple videos from a single piece of content.
Facebook Brand Collabs Manager
Facebook Brand Collabs Manager is a free tool that allows brands to connect with pre-screened content creators on Facebook and Instagram.
It simplifies the process of discovering and collaborating with influencers, providing a streamlined approach to influencer marketing.
What are the limitations of influencer marketing?
Influencer marketing, while offering numerous advantages, also comes with certain limitations.
You should know:
Choosing influencers who aren’t a good fit for your brand could hurt your marketing and reputation
Influencers who seem fake or get into controversy won't be good partners
Influencers from unrelated industries might not be able to effectively promote your products or services
The influencers you partner with should reflect your business well. So be careful in picking the ones to work with.
Conclusion
Influencer marketing can be very effective for brands. It lets them connect with potential customers through popular creators who have loyal followings. Working with influencers can help brands:
Promote products or services
Increase brand awareness
Drive more sales
However, brands need to plan their influencer marketing carefully. They should think about what limitations or risks could come up when partnering with creators. Doing this thoughtfully is key to success.