Is Influencer Marketing worth it?
The advent of social media has provided new channels for agents to tell their brand stories in an authentic and distinctive voice. As the influencer marketing industry reaches maturity, the question becomes; is influencer marketing still worth it?
To get to the bottom of this question, we’ve analysed recent industry data — and the results might surprise you. Read on to uncover key insights into the influencer marketing industry for the year ahead.
Influencer Marketing 101
Similar to word-of-mouth marketing, influencer marketing is a less explicit method of promoting products and services via credible individuals with dedicated web or social media followings. These can take the form of social media influencers or niche experts in the real estate industry.
There is no consensus on what constitutes an influencer. However, influencers are generally third-party individuals who use their popularity on platforms such as Instagram, YouTube, Snapchat and Facebook to influence the purchasing decisions of their follower bases.
The Value Proposition of Influencers
Consumers are natural sceptics. It’s easy to grow distrustful of companies and their marketing ploys when you’re aware that a product or service is being advertised. However, we’re more inclined to trust a product recommendation when it comes from a friend, family member or celebrity we admire.
That’s where an influencer can create real value for agencies. Recommendations from trusted, influential people can shed the cynicism that marks the average consumer response to advertising. When recommended by a trusted source, consumers let their guard down, so to speak, and are more receptive to product or service suggestions.
Influencer Marketing Forecast
Despite the naysayers and critics, the outlook for influencer marketing for the coming decade is positive. In 2018, Linqia Research found that 86% of marketers and advertising agencies utilised influencer marketing as part of their overall outreach strategy. Within this group, 92% found the practice to be useful for effective brand outreach.
Whether this trend will persist depends on whether social media platform growth trends hold up in the future. According to the Yellow Report Instagram, the current leading platform for influencer marketing boasts nearly 1,000,000 Australian users and is predicted to continue to grow.
Historically, influencer marketing has been well received by ad agencies and brands, and an increasing number are making space in their strategies for the practice. For this reason, every indication points toward the continued growth of this marketing sector.
What You Need to Know About Influencer Marketing
As the new decade approaches, it’s important to understand what the future of social media marketing looks like.
• Market analysts predict that the influencer marketing industry will be worth north of $15 billion by 2022, a rise from $8 billion in 2019.
• TikTok is a fast-growing influencer platform with over 2.5 million Australian users in 2021.
• Nano-influencers (less than 1,000 followers) on Instagram have higher engagement rates (7.2%) than mass influencers (more than 100,000 followers).
In the coming years, influencer marketing will likely continue to trend toward social media influencers who capitalise on the growth of platforms such as Instagram, TikTok and LinkedIn.
Every brand, from major multinationals like Nike and Sephora to startups and e-commerce stores, need to source influencers who fit their brand’s unique identity.
As a rule, there are two core categorisation metrics for determining whether an influencer fits your brand.
• Niche: An influencer’s niche is the most important factor in ascertaining the individual’s brand fit. Their niche refers to the specialised market segment that the individual appeals to, and to whom their messaging is communicated (i.e. home renovators, investors etc).
• Reach: An influencer’s reach is a secondary consideration that encapsulates the individual’s capacity to engage your target audience. Influencer reach refers to their follower count, engagement levels and overall level of authenticity.
If you’re considering engaging multiple influencers, ensure there is minimal overlap in their audiences, otherwise, you’ll be double spending to reach the same online users. Ideally, you’ll structure your influencer marketing strategy around a small core of diverse influencers who show higher levels of engagement and authenticity. In a highly saturated and mature market, these qualitative attributes take priority over follower count alone.
Influencer Marketing: Is it still worth the investment?
In short, the answer is it depends.
If the data is to be believed, we can expect social media influencers to continue to be an invaluable trust-building mechanism that can be leveraged to establish brand identity.
The caveat to this of course is it’s vital that you engage the right influencer for you. Take your time, do your research and start with small investments to ensure you get the best possible ROI from your investment.