Navigating Social Media Trends: Benefits of Influencer Marketing
August 2, 2021
While influencer marketing may seem like a new trend born of Instagram, Kardashians, and TikTok dancing, it’s actually an ancient practice. Champion Roman gladiators endorsed products, and the British royal family has allowed its suppliers of goods and services the use of certain royal imagery to indicate the sovereign’s favor since the 15th century. Looking to others for recommendations on what to buy, eat, wear, read, and watch is human nature.
Today’s influencers are more than just trusted friends and coworkers; they’re expected to represent a $13.8 billion market in 2021, according to Influencer Marketing Hub (IMH). Integrating influencers into broader marketing campaigns has become increasingly important for business-to-consumer companies. While many marketers have a vague notion that they should be working with influencers, they may not be aware of the true value influencers can bring to their brands.
A well-executed influencer marketing campaign can deliver the cachet of hipness or the appearance of being in touch with the youth market. But the influencer return on investment (ROI) goes beyond appearances. Skilled influencers are excellent storytellers who can take their followers on a journey. When they deploy those narrative skills in the service of a messaging strategy, the payoff can be substantial.
Potential Benefits of Influencer Marketing
Nearly 90% of marketers say influencer marketing delivers equal or better ROI compared with other digital marketing channels, according to Mediakix. In fact, influencers earn a marketing yield of $5.20 to $6.50 for every dollar spent — significantly higher than other forms of digital marketing — with an earned media value of $11.69 to $18 for every dollar spent. Partnering with influencers also delivers higher-quality customers and eight times better social media engagement compared with brand-generated content.
A Win-Win for Marketers and Influencers
Marketers don’t always need to pay influencers for their efforts. In fact, most don’t: 36% of brands give influencers free products or samples; 32% pay influencers for their marketing efforts; 21% give product discounts on big-ticket items; and 11% simply enter influencers into a sweepstakes or giveaway contest.
In return for what may seem like a small investment, influencer marketing helps companies remain up to date on trends, refine their marketing mix and overall marketing strategy, develop desired products and choose effective packaging, and reduce campaign costs by repurposing influencer-created content. These combined benefits may be why 90% of marketers say influencers are an effective form of marketing, according to Influencer Marketing Hub’s 2021 benchmark report.
Reaching Key Demographics
While the major social media platforms — Facebook, Twitter, Instagram, Snapchat, Twitch, and TikTok — all have influencers, marketers tend to focus on the ones who reach younger consumers, since those consumers are least likely to be exposed to or swayed by more traditional forms of advertising. User trends also point to a declining influence of older forms of social media, such as Twitter and Facebook, while TikTok and Twitch are on the rise. To reap the benefits of influencer marketing, marketers need to choose the best way to reach potential customers.
Average Age of Platform Users
Twitter and Facebook both appeal to Gen X users, with Facebook skewing just slightly younger. Instagram and TikTok are both favored by millennials, though TikTok users are seven years younger on average. Finally, the online game streaming site Twitch is the territory of Gen Z.
Millennial and Gen Z Contradictions
Millennials and Gen Z have a combined annual buying power of more than $640 billion and rising, but all that money can be hard to reach. For instance, more than 35% of millennials use ad blockers, and 70% of Gen Zers say people aren’t trustworthy. On the other hand, more than half of millennials have made unplanned purchases based on something they saw on social media, and about 80% of Gen Zers trust other shoppers on social media.
Where to Reach Millennials and Gen Z
Instagram is used primarily by people in their 30s to share images and videos for entertainment and to keep up with friends and family. Among the social media platforms favored by these cohorts, Instagram has the second-highest engagement rate.
TikTok’s video platform attracts people in their 20s, who like it for entertainment. It has the highest engagement per post of the three platforms.
Twitch’s videos are enjoyed by viewers 25 and younger, who use it for streaming esports and playing video games. It’s the fastest-growing platform for influencer marketing.
Authentically Working with Influencers
Authenticity is a key benefit of influencer marketing, but why does it matter? Gen Z began to usher in brand behavior change, as the cohort values truth and authenticity. Authenticity has also long been a millennial value. The COVID-19 pandemic ramped up the demand for authenticity, leading brands to fully realize the importance of doing good, not just increasing profits.
Given the current and ascending spending power of these two generations, the most authentic brands (or the ones that connect to consumers in authentic ways) are likely to win the hearts and wallets of shoppers.
The Intersection of Brands, Influencers, and Authenticity
Since companies that are most effective at influencer marketing start by examining the group they want to target — rather than just jumping on the latest social media bandwagon — their campaigns are inherently more authentic. Brands can use influencer-produced content to lend an air of authenticity, street cred, or guerrilla marketing to other parts of a campaign.
More affordable influencers with smaller numbers of followers can be better at creating highly relatable, authentic, and engaging content. (When using less-experienced influencers with smaller followings, marketers should consider the creativity, transparency, and professionalism of posts before using them in campaigns.) Influencers who share a genuine passion for and interest in the subject they’re posting about are the most successful. That authenticity naturally attracts followers, and brands can take advantage of the connection.
The Different Types of Influencers
Influencers usually fall into categories based on number of followers, though the industry offers no standardized labels for them. Different marketing campaigns will call for different types of influencers. A celebrity or mega-influencer, with 1 million to 5 million followers, may have a huge reach, but some viewers don’t trust the authenticity of marketing messages from this group. Macro-influencers, who generally have 500,000 to 1 million followers, represent the best cost per thousand impressions (CPM), a key marketing metric, but they can be expensive.
Mid-tier is often the sweet spot between tapping a loyal niche and reaching a large number of people (50,000 to 500,000). Micro reaches 10,000 to 50,000, where the trade-off is strong niche performance but a smaller number of views. Finally, nano-influencers deliver 1,000 to 10,000 loyal followers with highly authentic posts, but these influencers may need a bit more hands-on management.
When to Use Which Tier
Fortunately, influencers aren’t one-size-fits-all. Consider the marketing need to find the right tier. Celebrities are best when a campaign needs national or international exposure for a new product. Macro works for national or large regional campaigns that want a wide reach with perceived relatability. Mid-tier is the go-to when the campaign has funds but needs large niche targeting. Micro-influencers cost less and are great when very specific community connection is sought or authenticity is crucial. Finally, nano-influencers should be employed when little to no money is available or personal follower engagement is critical.
Pitfalls to Avoid
When working with influencers, it’s important for marketers to learn from the experience of others. Things to avoid include taking a one-size-fits-all approach across platforms or influencers, as well as relying exclusively on follower size when choosing an influencer. Influencers deliver the most benefit when they are integrated into campaigns and given creative control to do what they do best.
Reaping the Benefits of Influencer Marketing
Influencer marketing can be a cost-effective and modern use of strategic marketing and delivery to reach more customers, particularly younger generations turned off by traditional marketing efforts. But for every success story, such as Gucci using 23 Instagrammers to promote a new fragrance to nearly 750,000 viewers, there’s a cautionary tale, such as the influencer-promoted but ultimately doomed Fyre Festival scam that landed its co-founder in federal prison.
To be successful, marketers must stay abreast of social media trends and understand the nuances of working with influencers. To make the right influencer decisions and truly leverage the narrative talents of influencers, marketers must match campaign needs to social media platforms and influencer tiers — and then vet potential influencers and allow them the creative freedom to connect and engage with their followers.