UPDATED March 6, 2018 — We first published our influencer marketing industry global market spend towards the end of 2015. Since then, much has changed in the influencer marketing ecosystem serving to reshape, disrupt, and grow the industry.
We published an in-depth study and methodology on the Instagram influencer marketing spend with advertisers possibly spending $1.6 billion on Instagram alone in 2018, and also proved to brands and the world that fake Instagram influencers and engagement could be costing advertisers up to $100 million each year — a fraudulent practice for some macro and micro-influencers alike.
2017 was the first year the FTC filed a case against individual influencers (not just brands) after it was discovered a few months prior that 93% of top celebrities on Instagram do not follow FTC guidelines on proper brand sponsorship disclosure.
For 2018, influencer marketing is increasingly becoming ubiquitous — not only for veteran brands and influencers but also for newcomers as all types of marketers are seeking viable advertising channels to leverage the reach and efficacy of mobile and social media audiences, time spent on these devices and platforms/apps, and growth.
With search for “influencer marketing” nearly at 10,000 (average monthly U.S. Google searches), a three-fold increase from the start of 2016 means that interest in influencer marketing is strong and continuing to grow at a rapid pace.
In just over half a year, the average monthly search for “influencer marketing” has increased nearly five-fold (from 500 to 2,400 U.S. Google searches). According to Google Trends, interest in influencer marketing has more than doubled within the year. This is a significant increase from the previous year which saw almost a 40% increase.
For many brands in 2015, influencer marketing has proven to be an effective marketing channel supplementing or replacing other channels affected by the growing ad blocking movement. With key demographics spending significantly less time in front of a TV, these “cord-cutters” (many of whom will never consider traditional cable service “cord-nevers”) receive their everyday media content solely through social media channels, apps, and platforms.
Although influencer marketing seemingly became popular overnight, many brand-influencer advertising sponsorships started as early as 10 years ago. What started with popular bloggers and blog advertising has now spread into other influencer channels including Snapchat, Instagram, and YouTube. As viewership, audiences, and social platform growth continues to rise, so too will ad dollars seeking to capitalize on the untapped reach and exposure of these marketing channels.
Here are the overarching trends affecting growth in the global influencer marketing market:
At present, we estimate the existing influencer marketing spend to be roughly $500 million. Based on the existing TV advertising to digital ad spend market ($70 billion), the reallotment of ad dollars available from ad blocked channels, and the existing rate of increase in influencer marketing, we conservatively estimate the total ad spend in influencer marketing to increase to $5 to $10 billion dollars in the next 5 years.
As more of today’s audiences become “cord-cutters,” declining TV viewership is quickly being replaced with mobile screen time. From 2011 to 2015, traditional TV viewership has dropped by 35% for viewers 18-24 years old. In place of TV, younger demographics are spending increasingly more time online and especially in front of their mobile phones. As reported in Mary Meeker’s mid-year Internet Trend report, time spent on mobile media is demonstrating significant growth representing roughly a $25 billion dollar opportunity in the U.S. alone.
With their adjoining reach and targeted groups of subscribers and followers, demand (and therefore sponsorship rates) for top social media influencers is growing. At one point, these advertising rates amounted to hundreds of dollars accompanied with free product. Now, top influencers command rates of tens of thousands for a single Instagram post to substantially more for dedicated YouTube videos and longer-term collaborations. Advertising rates and influencer marketing opportunities for top social media stars (e.g. YouTubers, Instagrammers, Viners) have increased to the point where many traditional talent agencies are now facilitating the next wave of brand deals.
Walt Disney’s roughly $1 Billion dollar purchase of YouTube MCN (multi-channel network) Makers Studio demonstrates the overarching direction and demand of both content and distribution for today’s audiences.
In the later half of 2015, the debut of Apple’s ad blocking technology in iOS9 brought ad blocking as a global movement into mainstream prominence. Since then, several notable reports including Adobe and PageFair’s “2015 Ad Blocking Report,” have indicated the severity of the problem with loss to publishers in 2015 alone to be $22 billion and on pace to hit ~$42 billion in 2016. With billions of advertising dollars at risk, brands and advertisers are searching for the most effective alternative ways to the masses online. As one of the few viable ways advertisers can connect with audiences online unaffected by ad blocking, marketing with top social media stars will continue to see rapid growth.