Influencer marketing has become a strong marketing tool for businesses, allowing them to reach out to a larger audience and attract new consumers in a more effective way. As a result, collaboration with influencers has become an essential component of a brand’s marketing strategy all over the world. As we have all witnessed how influencer marketing has blazed its way, it is projected that influencer marketing will reach a new level by 2022. But why is influencer marketing is so effective? Well, with an increasing number of internet users scrolling through social media platforms for amusement, inspiration, and product suggestions, it’s no wonder that marketers are using the power of social media’s most famous faces for advertising. The influencers are seen as trustworthy experts in their relative field by their followers, leading them to hold the power to influence their audience’s purchase decisions. So, let’s look at the influencer marketing benchmarks, analytics, and statistics as well as some projections of how the industry will evolve in the coming years and beyond.
The Overall Market Size of Influencer Marketing
There’s no denying that influencer marketing is a highly profitable industry. Since 2019, the influencer market has grown double in size, and in 2021 it was valued at over 13.8 billion US dollars. And this year, the influencer marketing industry is expected to reach around $16.4 billion. The majority of marketers consider that influencer marketing provides the best Return on Investment (ROI), rather than traditional marketing tools. About 90% of the marketers consider ROI from influencer marketing comparable to or better than other marketing channels. As a result, brands are projected to spend $15 billion on influencer marketing in 2022. Businesses have experienced a return on investment of $5.78 for every $1.00 spent on influencer marketing campaigns. Due to this significant return on investment rate 66% of marketers are considering raising influencer marketing budgets. Influencer marketing isn’t new, in fact, it’s always expanding. Especially the ways businesses collaborate with influencers are constantly changing at a rapid pace. Influencer marketing accounts for more than half of 17% of the brand’s marketing expenditure. Consequently, the companies that support influencer marketing also grew by 26% in 2021. Since modern consumers are easily adapting to new technologies and getting less engaged with traditional advertising, influencer marketing appears to be more promising for the near future. According to a recent analysis by Grand View Research, Inc., the worldwide influencer marketing platform market is expected to reach USD 84.89 billion by 2028, at a CAGR of 30.3 percent over the forecast period. Moreover, Augmented Reality (AR), Virtual Reality (VR), Artificial Intelligence(AI), and Machine Learning would be the key driving force in influencer marketing. These technologies would greatly help in improving the experience of customers and build a trust-based and long-lasting relationship between the influencer and consumer. Hence, the future of influencer marketing will be hugely affected by the influencers’ willingness to embrace innovative technology.
Current Influencer Marketing Trends You Need To Know
As the types of influencers are expanding, the industry is always changing and creating new trends. The Influencer market industry could not be able to achieve this level of success unless influencers and brands adapted to all of the newest influencer marketing trends.
Major Platforms for Brands
Among the major social media sites, Instagram is the most popular social media platform for marketers as it accounted for 68% of influencer marketing expenses in 2021. TikTok came in second place as it took social media by storm and captured 45% of the influencer marketing budget. Facebook was third in line with 43%. However, Instagram has 1 billion monthly users, whereas Facebook has 2.91 billion. So the question might arise that despite having more users, why is Facebook not at the top in influencing marketing? There are actually quite a few reasons, including that Facebook’s news feed algorithm made it difficult for brands to reach their audience. Consequently, 79% of marketers find Instagram more appealing for influencer marketing.
Impact of Micro-Influencers
There’s a lot to talk about about the rise of micro-influencers. Currently, successful influencer marketing doesn’t only depend on the number of followers. Micro-influencers have extremely niche groups of followers that marketers can leverage. Unlike celebrity influencers, micro-influencers don’t have millions of followers. They may not have the numbers but they’re backed by an extremely supportive and loyal group of audience. However, through their excellent engagement with the audience, they make their product recommendations appear to come from a trustworthy confidante. The audience appreciates these influencers’ authenticity, relatability, and credibility for their work. Small businesses that don’t have a huge budget can be benefitted from working with micro-influencers. Some studies even show that influencers with more followers tend to have lower engagement rates. In fact, the share market of micro-influencer grew from 89% in 2020 to 91% in 2021. Moreover, micro-influencers have established a loyal community on TikTok as well. Around 38% of influencers with sponsored content had less than 50,000 followers. Even if we compare the engagement rate of small and bigger TikTok users: small TikTok users have 9.38% engagement whereas the TikTok users with more follower have around 5.3%.
Influencers Becoming Entrepreneurs
Social media stars making their way into entrepreneurship is one of the most popular ongoing trends in influencing marketing. So, it’s safe to say that influencer marketing played a major role in creating full-fledged entrepreneurs. Once an influencer develops an audience on social media, they aspire to create their own brand. For instance, one of the most followed creators on TikTok, Addison Rae, launched her own beauty line in 2020. James Charles, the biggest name in the beauty community took his expertise to the next entrepreneurial level and created his own beauty line.
CGI influencers are becoming rising stars in the influencer marketing industry. CGI refers to Computer Generated Imagery influencers. Sometimes companies face a hard time getting the perfect influencer to make their brand stand out. Thus, they are approaching in a different direction. With the help of designers, programmers, and social media managers companies are creating their own brand ambassadors. CGI influencers will offer whole new possibilities in influencer marketing as they will give the brand full control over its marketing process. As a matter of fact, brands are already collaborating with CGI influencers. One of the most hyped CGI influencers, Lil Miquela collaborated with Streetwear designer Heron Preston, for UGG’s 40th-anniversary campaign. High-end brands like Diesel and Prada have also collaborated with virtual influencers.
Where Does This Leave Us?
Since 2016, the marketing strategies and rules for influencer marketing have been evolving. It’s becoming the standard now as influencer marketing is no longer just an afterthought for a brand. Influencer marketing has established itself as a successful and effective approach to letting companies and brands promote their products/services. In fact, companies are considering influencer marketing as the mainstream form of digital marketing rather than the traditional approach. Customers develop trust in brands that are promoted by celebrities, bloggers, and well-known individuals via social media platforms. This is what makes influencer marketing so effective and why there is a global demand for it now.