In just a few years, influencer marketing has gone from an ancillary expense in many brands’ online marketing budgets to its very own digital advertising category. As we look forward to 2018, the influencer marketing space is expected to broaden its scope, extend its reach, and strengthen its impact.
While the growing landscape brings with it many exciting opportunities, new challenges will also arise. From measuring ROI, to federal regulations, to fake influencers, to evolving technologies and platforms, the coming year looks to have big implications for both influencers and the brands that partner with them.
There is no shortage of success stories in the influencer marketing space, yet some businesses are only now realizing what they’ve been missing out on.
While there was a 90x increase in Google searches for the term “influencer marketing” from 2013 to 2016, interest around the topic has doubled in the first nine months of 2017. During the same time, searches for “Instagram influencer” have more than tripled. The reasons for the growing interest are many, but a key principle underlies all: Influencer marketing is working for all types of brands.
Consistent with year-over-year estimates, businesses are expected to allocate more money toward influencer marketing in 2018.
As the space gets more saturated, however, brands without a clearly defined influencer marketing strategy will find it difficult to break through. For businesses already immersed in the space, looking at ways to maximize the impact of their campaigns, as well as differentiating themselves from their competition, will become key.
As demand for influencers increases, so do the value of their services. Scott Mathison, an influencer in the fitness space with over 200,000 followers on Instagram, says that brands approach him every day, asking that he hawk their wares. It takes more than money to woo Mathison though. He only considers working with companies whom he feels are the right fit for him and his followers.
Mathison admits, however, that as his value and costs have increased, so have his rates. Mathison is no anomaly in the ever-evolving influencer space. Many online personalities are starting to recognize their value as creators, and businesses are wise to budget for their services.
While many companies understand the positive impact influencer marketing can have on their brand, some businesses are still nervous about what they perceive as nebulous or anecdotal results. Fortunately, there are many strategies and techniques that can be implemented to help businesses track key performance indicators (KPI) and return on investment (ROI).
In a 2016 influencer marketing case study, we examined influencer marketing engagement at the Coachella Music and Arts Festival by analyzing the results from campaigns by three different companies: American Express, Revolve Clothing Co., and Live Lokai. Each brand tapped a variety of influencers to help promote their individual campaigns, and engagement was tracked through monitoring of total audience, likes, comments, and hashtag usage.
In the end, each campaign was able to reach tens of millions of people, driving engagement for the brands both on and off the festival’s site.
Tracking KPI and ROI is achieved through an understanding of relevant metric tools for a particular campaign, best practices for integration, and a detailed evaluation of the results. Whether it be tracking pixels, offering coupon codes, or directing users toward custom hashtags, working with marketers who know how to deliver comprehensive analytics can offer insights beyond campaign reach and into the arena of overall audience behavior.
Some of the world’s largest multi-channel networks (MCNs) have experienced upheavals or undergone restructuring in the last several years. Maker Studios, owned by Disney, had layoffs in both 2016 and 2017, reportedly shifting focus from 60,000 creators to just 1,000. Fullscreen and StyleHaul have also seen layoffs as they’ve looked to adapt to various changes in the marketplace.
Other MCNs have started to pivot from their user-generated roots, pursuing brand name intellectual property and production deals. In 2016, Machinima announced that they and Justin Lin’s YOMYOMF (YouOffendMeYouOffendMyFamily) had partnered with NBCUniversal to produce a digital reboot of Knight Rider. Shortly thereafter, Machinima was purchased by Warner Bros. who revealed plans to fold the MCN into WB Digital Networks.
Expect to see more MCNs pivoting, partnering with entertainment companies to focus on productions, and others reassessing their place in the digital landscape for 2018.
In 2018, video will become even more vital to digital outreach as the numbers continue to prove its superiority over other advertising mediums.
According to a study cited in Business Insider, video can be twice as effective in driving sales as text-based ads. Moreover, the report indicated that those influenced by video tend to be active shoppers.
Social media platforms are well aware of the statistics, evidenced by their continued investment in new video services. Last year, Instagram launched “Stories” to compete with the popular, correlative feature available on Snapchat. Facebook, the world’s largest social network, recently announced “Watch,” which will premiere with video channels for celebrities and premium content producers, but eventually be “a platform for all creators and publishers to find an audience, build a community of passionate fans, and earn money for their work.”
Predictably, businesses are expected to up their video ad investments in the coming year. However, in an ever-crowding space, visibility and engagement are not always proportional to dollars spent. Instead, those who have an understanding of their audience and can find ways to engage with them directly, will see the greatest ROI.
Here are a few statistics from Snap’s Q3 earnings call to digest:
To add to those numbers, Mediakix recently tracked and studied the usage of Snapchat Stories vs. Instagram Stories from top influencers and found a similar story. Our research finds that Snapchat Stories use declined 33% among top influencers in just 6 months.
Admittedly, Snap has not always maintained or prioritized influencer relationships, however, in the past couple of months Snapchat has taken steps to become more influencer-friendly, such as implementing verification for top influencers beyond just celebrities. Furthermore, starting in 2018, Snap states it’ll offer its top content creators monetization and distribution options.
If Snap’s downturn continues, advertiser dollars will continue to shift to other platforms. However, its recent push to foster positive influencer relationships could be what the platform needs to counter its decline.
2017 was supposed to be the year of “live” video. While engagement has certainly increased around live, the feature hasn’t been the panacea some had predicted. Still, many forecasters are looking past live to technologies, such as 360, virtual, and augmented reality as the next new, big thing. However, this brings into focus the trouble around many social media predictions; oftentimes, they’re wrong.
Going into 2017, Snapchat was the social media platform to watch as it garnered huge media buzz and launched a successful IPO. However, as our recent report showed, top influencers are posting twice as much on Instagram Stories as Snapchat Stories, reinforcing the fact that the social game refuses to be tamed. As digital players, we’re constantly being reminded how fickle the landscape can be as new technologies emerge, platforms evolve, and users change their habits.
In today’s social sphere, businesses need to have their finger on the pulse more than ever. To avoid being blindsided by emerging trends, brands should keep up with industry news, align themselves with top influencers, and work with reputable agencies who have a track record of delivering results under various conditions.
2017 marked the first time that the Federal Trade Commission (FTC) filed a case against individual influencers over failure to disclose ownership ties and paid sponsorship promotions. With the commission recently sending letters to more than 90 influencers and marketers over compliance issues, lawsuits against influencers and the companies that partner with them are becoming more common.
Still, up to 90% of paid endorsements remain undisclosed by influencers and brands.
Moving forward, it’s incredibly important that influencers and brands are aware of FTC guidelines, and obey them when marketing or promoting online. To learn more about the commission’s latest rules, check out our infographic here.
In April, Instagram announced it had reached a milestone 700 million users. Just four months later, it added another 100 million. At its current rate of growth, Instagram is set to exceed 1 billion users in 2018.
Influencer marketing on Instagram is currently a $1 billion industry, and it could reach $2 billion by 2019. The mammoth platform offers incredible opportunities for partnerships between influencers and businesses but, with an estimated 2.7 million sponsored posts, the problem of cutting through the clutter becomes a stark and sobering reality.
To stand out in the coming year, influencers and brands will have to forge relationships, design campaigns, and create distribution plans that are superior to that of their direct and indirect competitors.
According to Pew Research Center, “69% of the public uses some type of social media.” While younger adults continue to account for the bulk of use, adoption by people of all ages has increased steadily over the last decade. In fact, those in the 65+ category increased adoption by 27% from 2010 to 2016.
On average, women tend to be slightly more active on social media than men, while variance among race is even subtler. However, differences in online habits and behavior starts to appear when demographic info is looked at in a more holistic manner.
Nielsen describes Latinas as “avid tech users, voracious video consumers, and social trendsetters.” They report that “74% of Hispanic women say they are likely to recommend products to others, while 40% say people often seek their advice before making a purchase, compared to 33% of non-Hispanic white women.” In another paper, Nielsen suggests that Asian American women are a “powerful consumer segment” due to their “youth, digital fluency and an intercultural mindset.”
When consumers become advocates, it can be incredibly powerful for brands. Moreover, customers feel closer to businesses that understand their habits and needs. Paying attention to demographic characteristics helps to identify places where businesses can connect with audiences organically, so they might explore opportunities to work together more synergistically.
“A fool and his money are soon parted.” — Thomas Tusser
Unfortunately, you don’t need to be a fool to lose money marketing in social media — underestimating the sophistication of the space and relying on automation is often enough. As our own research has shown, building a fake Instagram account with paid followers is relatively easy. This can be a hard and expensive lesson to learn for brands that believe an account’s superficial numbers are the gold standard for reputability.
To avoid “Instascams,’ it’s important for businesses to incorporate an airtight process for vetting influencers — especially in the case of smaller and less well-known accounts. To ensure your dollars are going as far as they can, don’t rely on automated processes. Instead, work with companies that have deep knowledge, strong relationships, and proven expertise in the influencer space.
The merit of partnering with micro-influencers vs. macro-influencers has been widely debated over the past couple of years. A few studies have shown that micro-influencers receive higher engagement rates than macro-influencers on average.
However, Mediakix recently took a deep dive into the research (assessing 16 brands concurrently advertising with both micro and macro-influencers) and found that macro-influencers do overwhelmingly better for brands on Instagram in terms of likes, comments, and reach. Furthermore, they receive comparable engagement rates to micro-influencers.
Marketers will continue to weigh the pros and cons of micro and macro-influencers in 2018, (including the increased likelihood of fake followers and engagement affecting micro-influencers) and ultimately, aim to select the right combination of the two that aligns with their campaign goals.
Additionally, data analysis will be a strategic focus when deciding between macro vs. micro-influencers. Through further research, marketers will deepen their understanding of the costs, benefits, and KPI’s associated with influencers of various sizes.
Musical.ly is a video based social media app that just sold for an undisclosed amount between $800 million and $1 billion to Chinese company Bytedance. Users on the app take up to 15 second videos of themselves lip-syncing to popular songs.
The app is only three years old and claims to have 60 million monthly active users, primarily in the teen to tween age group. With 64% of its users under the age of 24, Musical.ly is an effective avenue for reaching millennial and Gen Z audiences.
As brands look to target younger demographics in the coming year, Musical.ly represents a largely untapped opportunity. While Musical.ly has yet to release its own native advertising offerings, it’s something to look out for in 2018. Additionally, as Musical.ly continues to grow, it will likely become an increasingly popular vehicle for influencer marketing campaigns.
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