Instagram Influencer Marketing Is A 1.7 Billion Dollar Industry
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How Big Is Instagram Influencer Marketing? [INFOGRAPHIC]
UPDATE: March 7, 2019 — In the years since we first conducted this analysis, Instagram has expanded to over 1 billion users with no signs of slowing down. The channel’s rapid growth is due in part to the massive popularity of Instagram Stories, which overtook Snapchat Stories in 2017 and now has over 500 million daily users. Instagram has also successfully developed a thriving influencer community and provided valuable audience insights to spark the interest of brands.
While YouTube remains a powerful influencer channel, sharing photos with the click of a button made Instagram highly accessible to the average individual, and led to the rapid growth of content creators (and even small-scale “micro-influencers” have been able to cash in). Snapchat’s early limitations in discoverability and audience insights stifled their ability to foster a strong influencer community, and today, Snapchat’s own influencers post 2X more content on Instagram Stories than Snapchat.
Today, Instagram ranks as the #1 most strategically important social media channel for influencer marketing. The platform continues to launch new formats such as IGTV, and new features such as the shoppable Instagram functionalities, which have embedded Instagram into the shopping journey. Amidst this rapid growth and innovation, Instagram has also seen its share of challenges, such as combating fake followers, bots, and other fraudulent activity. In spite of this, all signs point to continued growth of the Instagram influencer market in the coming years.
Instagram Influencer Marketing Could Reach $2.3 Billion By 2020
Instagram Influencer Marketing Growth
In 2019, 89% of marketers say Instagram is strategically important to their influencer marketing strategy—higher than any other social media channel in the industry. Instagram influencers today have the power to shape cultural trends and sell out products and are a major boon to brands looking to reach new audiences. How did we get here?
The Rise Of The Instagram Influencer
Back in the mid-2000s, consumption of traditional cable television began to decline, especially amongst younger age demographics. This coincided with increased engagement with social media and online video—and the first wave of “social media influencers.” In an attempt to reach younger audiences, brands began partnering with these influencers and sponsoring their content.
While YouTube was the dominant player in this space for nearly a decade, Instagram began carving out a major piece of the influencer industry around 2015. As more Instagrammers began posting unique photos and nurturing niche communities, the range of influencer tiers that brands partnered with began to expand.
More companies tested sponsorship with smaller influencers, such as micro-influencers and more recently nano-influencers, whose follower counts run in the thousands. These smaller influencers have proven more accessible in terms of cost and have opened up influencer marketing to a wider range of companies. This has also spawned an array of influencer platforms and marketplaces aimed at streamlining the process of finding, hiring, and paying influencers.
On the other end of the spectrum, Instagram macro-influencers and mega-influencers have built their followings up to the millions and offer the ability to achieve massive reach and brand lift through a single post. Large-scale influencers can only be reached through talent managers and can command several hundred thousands of dollars per post. On the highest end, celebrities like Selena Gomez earn roughly $800 million per sponsored post, while Kylie Jenner pulls around $1 million per sponsored Instagram post.
Instagram Attracts More Ad Dollars
Thanks to Instagram’s consistent popularity, a broad range of Instagram influencer tiers available to work with, and the relative ease of sponsoring Instagram content, Instagram has undoubtedly propelled influencer marketing into the mainstream.
The accessibility and effectiveness of Instagram has also attracted a wealth of sponsorship dollars. We asked marketers to identify which channel will command the majority of their influencer marketing budget this year; a whopping 69% will spend more on Instagram in 2019—that’s six times higher than YouTube, which will only be the highest-spend channel for 11% of marketers.
Our Instagram Influencer Marketing Methodology
We predict the Instagram influencer market will reach $1.7 billion by the end of 2019, and $2.3 billion by 2020, based on an analysis of total sponsored posts across the industry and the average cost of sponsored content. In order to measure how many sponsored posts have been shared on Instagram, we have tracked the most common sponsored hashtags, #ad, #sponsored, and #spon since 2016.
Number Of Sponsored Ads On Instagram
The total number of sponsored posts on Instagram:
- 2016: 1,263,994 sponsored posts
- 2017: 2,579,989 sponsored posts
- 2018: 3,701,797 sponsored posts
- 2019 (Projected): 4,953,063 sponsored posts
- 2020 (Projected): 6,118,024 sponsored posts
Even with these hard numbers on hand, the exact amount of sponsored posts within the Instagram influencer market remains difficult to quantify. Many influencers still post sponsored content without disclosing brand sponsorship or affiliation, which violates FTC guidelines. There is also a growing trend of influencers who post fake sponsored content in order to increase credibility and attract sponsorships from other brands.
In early iterations of this study, we tracked #sp which was once more regularly used for sponsorships. However, in recent years, the FTC cracked down on ambiguous or improper sponsorship disclosure, and the hashtag #sp became more frequently used to indicate travel in Spain. So in our updated Instagram influencer market analysis, we excluded #sp entirely.
The Explosion Of Instagram Stories
One of the largest drivers of Instagram’s success—and the success of its influencers—has been Instagram Stories. While traditional Instagram posts remain the bedrock of many influencer marketing strategies in 2019, Instagram Stories are a close second.
What Makes Instagram Stories So Successful?
Instagram Stories include either a video or a series of photos, which can be overlaid with playful text or emojis. While the “Stories” format didn’t originate on Instagram, Instagram has been the first social channel to achieve return on investment for brand-sponsored Stories. One of the biggest differences is that unlike Instagram posts, Instagram Stories can include links with their “Swipe Up” feature, which makes them an attractive format for conversion-based campaigns.
From a content perspective, Stories tend to depict more “off-the-cuff” moments of an Instagrammer’s daily life. Because of this, Stories are often perceived as more authentic or “real” than the staged Instagram photos appearing in users’ feeds.
The enthusiasm around this format is reflected in its rapid growth across social media; over half of all Instagram users today post Stories daily, and the Stories format is growing 15 times faster than feed-based sharing. It's clear that emerging post format types will be a key driver in the growth of the Instagram influencer market.
What's Does The Future Look Like For Instagram Influencer Marketing?
One thing is eminently clear: Instagram has become the dominant player in the influencer marketing industry and will continue to grow in the coming years. As long as Instagram continues to innovate features that users love, fosters influencer communities, and supports engaging content, the Instagram influencer market will continue to grow and adapt.
However, the platform does have its share of issues it will need to address. In 2018 there was a spike in interest in buying fake followers on Instagram—higher demand than any other social channel. Although Instagram started cracking down on third-party apps that offer this service near the end of 2018, spotting fake followers is still the #1 ranked influencer marketing challenge for marketers in 2019. As both influencer and consumer demands continue evolving, Instagram will need to remain nimble to meet the needs of this rapidly-changing industry.
March 29, 2017 By Mediakix Team