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How Effective is Influencer Marketing?

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How Effective is Influencer Marketing?
Influencer marketing is highly-effective because influencers have the power to speak and connect with a brand's target audience in a way that traditional marketing can't. Advertising to an audience of influencers works because it employs tactics like social proof and word-of-mouth marketing, which are great contributors to the success of any marketing strategy.
How effective is influencer marketing? Living in the internet age means that we have become exposed to advertising more than ever. This phenomenon has created what we call a "cynicism" of the masses towards marketing. It has become difficult for people to trust advertisement claims, simply because they know what it is precisely–downright marketing, a ploy for businesses to make a profit off them. And we all know that salesy strategies are a major turn off for consumers, and they usually don't work too well for brands. That's where influencer marketing enters the picture. Advertisers realized that they can utilize the power of social media to market their products and services to customers indirectly. Think about the last time you purchased an item and who influenced you to do it. Most probably, a family or friend recommended it to you. If not, then you probably saw one of the personalities you admire–celebrities, vloggers, influencers–using them. But whoever it was, the common denominator among these people is that you trust them. To you, they have credibility. And that, exactly, is what marketers want to incorporate in their advertising strategies. Although essentially an old practice, influencer marketing has come a long way. Its popularity among businesses has increased so much to the point of becoming a niche marketing method in itself. Companies are scrambling to get a hold of influencers who can best serve as brand ambassadors or simply patronize their products. And it has proved to be effective so far. If you're a business owner looking for a new way of giving your product the exposure it needs, then you've come to the right place. In this guide, we'll explore the factors that make influencer marketing the next big thing in the world of advertising. We'll tell you what makes it effective, how much you'll spend, its potential audience reach, and more. By the end of this article, you should be able to decide if this strategy is the right one for your brand.

What is Influencer Marketing?

Influencer marketing is a type of marketing that employs endorsements from influencers–people who have an established following who are seen as experts in their niche. A business collaborates with a content creator whose role is to increase brand recognition, drive traffic, and relay their partner brand's message to target audiences via different channels. Depending on what the influencer has, these channels may include blogs, social media, columns, and print ads.
Writing the words Influence Marketing on a chalkboard
Influencer marketing works because influencers can impact the purchasing decisions of their followers. ║ Source: Flickr

What Makes Influencer Marketing Effective?

Influencer marketing works because these people have sway over products or services that the public purchase. This influence may come from the individual's reputation, popularity, or expertise on the product. These days, more businesses are employing this advertising strategy because traditional marketing has become less efficient in attracting customers. Marketing to the audiences of influencers works because it uses tactics like social proof and word-of-mouth marketing, which are great contributors to the success of any advertising strategy.

Trust is key

Again, trust plays a major role here. Consumers believe what their family and peers say more than what the companies selling their products and services tell them. Nothing beats feedback from a person with credibility. For example, businesses seek the help of celebrities because they're highly visible. When a star uses a product and promotes it, the maker of that product gains exposure and the respect that a celebrity endorsement entails. Instagram influencers have also established their reputation as one of the most effective influencers because of their loyal following. Their appeal comes from the fact that these people are just like the rest of us; they're accessible and less intimidating than celebrities. These individuals also gain a loyal following because of their perceived authenticity. Influencers can shed the cynicism that the average consumer has towards advertising. When a recommendation comes from a trusted, influential source, people are more receptive to their suggestions. If people see influencers this way, just imagine the wonders they can do for your brand's reputation. When social media influencers rave about a product or service, their followers consider their word more trustworthy than traditional advertising. By using influencers, businesses can avoid much of the skepticism that people have towards straightforward marketing.

Why Influencer Marketing?

Industries are continuously advancing and changing; marketing strategies are no different. If you're still not convinced that using influencer marketing is one of the best advertising decisions you can make, you should read on. Here are the top reasons why you should use influencer marketing.

Your competitors are already using it.

As you've seen from the data above, 93% of marketers are already using influencer marketing. In a highly-competitive environment, staying ahead of the game is vital to your company's success.

It increases your brand's credibility.

Influencers have the power to speak and connect with your target audience in a way that traditional marketing can't. These individuals are deemed as trustworthy people because of the authentic content they share.

Influencers create fresh content.

Ever heard of the term viral? You have for sure, and this phenomenon is one that influencers can easily do for your brand or product. Content by influencers is like user-generated content. Instead of straightforward marketing, influencers give testimonials and product reviews that audiences perceive as unbiased opinions. They're more likely to use your product after hearing an influencer they trust recommend it.

They generate sales

With higher visibility comes more sales. As you've seen above, eight out of ten consumers have purchased something after an influencer they follow recommended it. That's a pretty high number and a powerful testament to what influencer marketing can do for your brand.
social media emojis
The success of influencer marketing depends in part on the influencer's reputation. ║ Source: Unsplash

Types of Influencers

Although there are several types of influencers, below are two of the most common ways to categorize them. Let's define their differences and advantages below.

Micro-influencer

A micro-influencer is an individual who has 1,000 to 10,000 followers. They're regular social media users who specialize in a particular niche and frequently create online content about their interests. Despite their relatively smaller following, using micro-influencers to promote your brand typically yields better results. Here's why.
  • They have better engagement rates because they're genuinely passionate and knowledgeable about their specific area of interest.
  • They have more targeted audiences. For example, if a health food brand partners with a celebrity with millions of followers, their campaign could reach a larger audience, but not all of them might be interested in nutritious food. But if this brand partnered with 100 health food bloggers with 1,000 followers each, they would be able to connect to a smaller yet more targeted and engaged audience.
  • They're deemed as more authentic. Since micro-influencers are just regular people, their content is more genuine and relatable, too. Influencers with a smaller following control their own content and personally reply to comments. If an influencer engages with their audience, their followers are more convinced to click and learn more about the brand they're promoting. Their behavior is seen as more authentic than an influencer who employs a social media manager.
woman taking a picture of food
Micro-influencers have more engaged followers.

Macro-influencer

A macro-influencer has over 100,000 followers. Internet celebrities and Hollywood stars usually fall under this category. As you've seen above, micro-influencers have a more engaged network. However, macro-influencers are more capable of reaching a much larger audience. This is why businesses usually approach them if they want to increase their brand awareness and visibility. Here are several benefits of working with macro-influencers.
  • They have a higher reach and can connect with large numbers of people with just a single post. According to a study by MediaKix, macro-influencers reach 22 times more people as compared with micro-influencers.
  • They can reach highly-diverse audiences, which is favorable for brands with various customer segments.
  • The brands they promote gain exclusivity. If an A-list celebrity promotes a product, that item and its maker will gain association with the famous endorser's name. Therefore, consumers will perceive it as a credible and trustworthy product.
  • They have less fake followers. They're genuinely famous people, so they don't need to buy fake followers just to make it appear that they're popular.
  • They're easier to work with since they're usually managed by professional talent managers and agencies. This means that they already have established terms and conditions that the brand is expected to adhere to. Less time is spent on managing them. It also removes the need for influencer marketing software.

How Much Should You Spend on Influencer Marketing?

Now, let's talk numbers. According to data from WebFX, influencer marketing costs $1,000 to $1 million per post in 2020. This massive price range is often a challenge to marketers since a variety of factors affect influencer marketing prices. Check out the per social media platform pricing guide below to find out what's a fair price for hiring an influencer in your market.

Facebook - $25 per 1000 followers

This platform has over $1 billion active users daily and provides influencers and brands with limitless access to consumers every day. Sometimes, an influencer may charge more than that average rate depending on what you'll ask them to do. If you require an influencer to create video content, that might cost you an additional fee. If you invite them to visit your office, they may ask you to pay for their travel expenses.

Instagram - $10 per 1000 followers

This platform has over $1 billion users, 80% of which follows a business. It's no surprise why Instagram is the number one influencer marketing platform in the world. Again, this price point may vary. Celebrities may charge more for their reputation outside of Instagram. Some, however, may accept lower payments than this average.
Instagram dashboard on a laptop screen
Instagram is the number one influencer marketing platform in the world.

Twitter - $2 per 1,000 followers

As a platform with 330 million users, Twitter is comparably smaller than the first two. Brands, however, continue to use them to reach their target audience.

YouTube - $20 per 1,000 subscribers

This platform has over $1 billion users and has provided brands with access to a whole new set of audiences. However, if your prospect YouTuber has over $1 million subscribers, they will likely go over this average price point.

Snapchat - $10 per 1000 followers

As a platform with an average of 188 million daily users, Snapchat gives companies access to a wide range of influencers. Like YouTubers, these influencers can veer away from this price point if they have over a million followers.

Influencer Marketing Effectiveness Statistics

The popularity of influencer marketing is only ever-increasing, and it's showing no signs of slowing. If you've ever asked yourself, "Does influencer marketing still work?" then you'll find the answer in the statistics presented below.

Popularity among marketers

Let's start off by showing how popular influencer marketing is among advertisers nowadays. According to 2019 data from SocialPubli, 93% of marketers use influencer marketing. Given that influencer marketing is a relatively newer way of advertising, this statistic is really impressive. This growing popularity is a sure sign of its effectiveness.
Influencer marketing usage among marketers
93% of marketers use influencer marketing. ║ Source: Oberlo

Return on investment

Companies that use influencer marketing for publicity earn $18 for every dollar they invest, according to Influencer Marketing Hub. The majority of marketers believe that influencer marketing yields the highest ROI among traditional marketing tools, such as SEO, social advertisements, and email marketing.

Effect on customers

2019 data from Rakuten Marketing showed that 8 out of 10 consumers had purchased something after an influencer recommended it. Although generating direct sales is usually not the primary goal of marketers in launching influencer marketing campaigns, gaining sales appears to be its natural by-product.

The Risks of Influencer Marketing

The only major downside of influencer marketing is that its success depends partly on the influencer's reputation. It's also less controllable than traditional marketing. What do we mean by this? When influencers promote a brand, they add to its appeal and positive image. This factor might seem favorable, but it's actually a double-edged sword. If your partner influencers face legal trouble or fall out of the public light, it might negatively affect your brand's chance at success. Although it's a rare occurrence, it's possible. That's why marketers must prepare a backup plan, so they know how to manage a negative fallout when this happens.

Is Influencer Marketing Right For You?

As a business owner, your objective is to get your brand out there and increase its visibility to the public. You want to earn the trust of potential consumers in the most cost-effective way possible so that you can gain a high return on your investment. Hiring influencers to promote your product or service can do all of these things for you. There's no doubt that the scope of influencer marketing is limitless, and it's high time that companies harness its power.
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