Throughout time, influencer marketing has taken on several different forms. Even before the phrase was coined, this method of promotion was very popular among marketers and sellers. Influencer marketing is not just a buzzword anymore, rather, it has become an extremely successful method for a company to improve brand awareness, expand reach, boost sales, and retain customers.
Many people are probably familiar with the term “influencer” because of social media platforms like Facebook, Instagram, and YouTube. But in reality, the term has been used ever since the 18th century. However, in the context of today’s time, influencer marketing is a form of social media marketing where products and services are promoted via influential online personalities. Brands from different industries collaborate with these online personalities in order to reach their target audience. They utilize the popularity and credibility of influencers to connect with people in a way that would not be possible by the brand itself.
Despite the popularity of influencer marketing, there are still many questions surrounding how it became so popular in recent years. That is why, in this article, we will be looking at the past, present, and future of influencer marketing so that you have a clear idea of what it was, what it has become, and what the future holds for it.
The Emergence of Influencers
Before we get into the nitty-gritty of influencer marketing, let’s start this write-up on a light note. Do you know the story of Josiah Wedgwood? He was a British potter whose artwork received praise from Queen Charlotte in 1765. Wedgwood received the title of “Her Majesty’s Potter,” which he leveraged to promote his pottery business as “Queensware.” This royal endorsement allowed his business to become very successful as people began clamoring for his work soon after. The reason why Josiah’s business was so successful is because the Queen, who was the most influential person in Britain at the time, acknowledged the quality of his products, which in turn increased demand among the common people.
Although Josiah’s strategy was very effective, it didn’t catch on. Not until Coca-Cola came into the picture, that is. In 1932, Coca-Cola used the image of Santa Claus during the holiday season to promote its beverages. The reason why this was such an effective marketing move is because this was during the time of the Great Depression, and Coca-Cola’s strategy brought immense joy and happiness to the hearts of their customers. The usage of a fictional character like Santa Claus to drive sales is one of the precursors to influencer marketing, as many companies and brands use this strategy even now to promote their products and services.
However, the advent of influencer marketing truly began when celebrities started to endorse products from different brands. As celebrities are real people with huge social followings, they have the power to convince people to buy or check out a particular product or service. Their recommendations hold a lot of weight as it is coming from someone who is admired by thousands of people. Mega brands like Dior, Under Armour, and AT&T have collaborated with celebrities like Dwayne “The Rock” Johnson, Mark Wahlberg, Charlize Theron, Robert Pattinson, etc., which brought these companies huge success. One thing to note here is, celebrity endorsements are not as effective as it once was. This is mainly because people are more skeptical of recommendations from celebrities as they know that they may just be paid promotions.
Moving on to modern times, reality TV shows like “Keeping Up With The Kardashians,” played a huge role in creating the foundation of the current influencer landscape. The reason why people were so enamored by these shows was because they could see first-hand what celebrities do in their day-to-day lives. This built a sense of trust and authenticity among fans. For instance, you will never see Kim Kardashian or Kylie Jenner use any other phone except an iPhone. Fans who follow them subconsciously adopt the idea that the Apple iPhone is the device to get because Kim Kardashian is using it. Furthermore, the Kardashians, along with most other celebrities, carried their fame to social media platforms, like Facebook, Instagram, Twitter, and YouTube. These celebrities would constantly stay engaged with their fanbase by posting pictures, videos, Instagram stories, and other forms of content.
But then a new trend quickly started to take over where regular people would also amass large followings primarily by making engaging content and having close interactions with their audience. Internet personalities like PewDiePie and Mr. Beast, who did not come from a background of fame, garnered hundreds of millions of subscribers on YouTube and were officially dubbed “influencers.”
The Current State of Influencer Marketing
Have you ever watched a video of your favorite YouTuber, where they would say, “and this video is sponsored by ___”? If you have, then you are likely familiar with how influencer marketing works. Brands approach influencers to promote their business. Once an agreement is reached, the influencer would then commence marketing the brand’s product or service on their online channels, which can take the form of a YouTube video, an Instagram post, and so on. This entices their audience to act upon the influencer’s recommendation and either click a link, visit a website, make a purchase, etc.
Nowadays, a large portion of people rely on social media sites to help them make purchasing decisions. 54% of internet users find out about products from social media, and the probability of them making a purchase is close to 71%. This shows that social media platforms are one of the biggest contributors to online purchases. To add on top of it, it has been reported that 92% of consumers trust influencer marketing more than traditional advertisements. Moreover, 70% of teenagers trust influencers more than traditional celebrities. These stats go to show how effective influencer marketing actually is, especially among the younger generation.
This raises the question – why is influencer marketing so widely used? Well, marketers prefer influencer-generated content because of how inexpensive and cost-effective it is. Traditional marketing strategies require a lot of investment, and there is no guarantee that you will be able to recuperate the cost. In comparison, for every $1 you spend on influencer marketing, you can earn $5.20. That means, no matter what, your revenue will be higher than your investment. Another reason why influencer marketing is preferred so much is because it is authentic, relatable, and diverse. So, it does not fall under the category of corporate speech, which is something most people try to avoid.
In order to understand the current state of influencer marketing, we need to first take a look at all the different types of influencers. Here is a table that outlines just that:
|Type of influencer||No. of followers|
|Nano influencer||1,000 – 10,000|
|Micro influencer||10,000 – 50,000|
|Mid-tier influencer||50,000 – 500,000|
|Macro influencer||500,000 – 1,000,000|
When talking about Instagram influencers, as we go down the list from nano influencers to celebrities, the the total number of influencers decrease. In other words, nano influencers take up the largest share of the influencer market, whereas celebrities occupy only a small portion. What’s interesting is that brands are more interested in working with nano and micro-influencers rather than mega influencers or celebrities. That is because not only are these high-profile online personalities a lot more expensive to hire, but a big advantage of small-scale influencers is that they can engage with certain subsets of people that would simply not be possible for celebrities, at a fraction of the cost. For instance, if you want to collaborate with a nano influencer, you can expect to pay just a couple of hundred bucks for each post. In comparison, if you want someone like Cristiano Ronaldo to promote your business, then your budget will need to be more than a few hundred thousand dollars! As for the engagement rate, here is a breakdown of the different tiers of influencers as per Shopify.
|Type of influencer||Av. Engagement Rate (as of 2020)|
From the table above, we can clearly see that the average engagement rate for nano influencers is much higher than every other type of influencer. That is because nano influencers appear a lot more authentic and human rather than internet celebrities with millions of followers. People know that they can get genuine suggestions and recommendations from nano influencers, which is why their engagement rate is so high.
According to Statista, the influencer marketing industry was valued to be around $13.8 billion back in 2022, which is more than double of what the value was back in 2019. Marketers realize the effectiveness and growth potential of influencer marketing, which is why most brands that operate on digital platforms have dedicated budgets for influencer marketing. 90% of people believe that influencer marketing is an effective form of promotion and have generally expressed positive sentiment as per the survey done by Influencer Marketing Hub. And this trend will stay consistent for the foreseeable future as more and more companies increase their influencer marketing budgets.
What Does the Future of Influencer Marketing Look Like?
To put it briefly, the future of influencer marketing is looking bright! The global influencer marketing industry is expected to reach $84.89 billion by 2028, exhibiting a CAGR of 30.3% over the forecast period. If that’s the case, then what kind of trends can we expect will come from it? Well, here are some key points to keep an eye on.
1. Interaction across multiple platforms
While most influencers started out gaining popularity on only one platform, this is changing fast as time passes. For instance, fans of tech YouTubers like Marquees Brownlee are not only subscribed to him on his channel but also follow him on Twitter and Instagram. Since he has such a strong following, tech brands like Samsung can promote their products through Marquees on multiple platforms. Thus, massively increasing reach and engagement.
2. Influencer affiliate programs
Although influencer marketing and affiliate marketing are different in nature, they are becoming more and more integrated. Traditionally, bloggers and web writers would promote products and services by writing reviews, guides, walkthroughs, etc., which would include affiliate links. But now, the tides are shifting as influencers have taken up the role of marketing by recommending products and services they have used to their audience, while also including links.
3. Shift to audio and video content
There was a period when people would spend hours reading different blogs and articles online. However, as it stands currently, a large portion of people are spending their time on video and audio streaming platforms like YouTube and Spotify. It is estimated that the average person spends approximately 84 minutes each day watching videos online. But that does not mean blogs are dying out. Rather, content creators and influencers are focusing more on making engaging videos and podcasts, which is something marketers need to take into account.
4. Live shopping
Live shopping, or live stream shopping, is a promotional strategy that brands use to sell their products and services, usually in collaboration with influencers. The main goal of live shopping is to provide potential customers with an interactive online experience where they can ask questions and buy products during a live stream. Although live shopping is relatively new, it is rapidly growing in popularity.
5. Long-term partnerships
According to Influencer Marketing Hub, a majority of businesses prefer to have long-lasting relationships with influencers rather than one-off projects. That is because it takes a lot of time for sales to start flowing. So, if the business constantly keeps changing who they work with, they are not going to be able to convert customers.
6. More performance-based deals
Speaking of long-term relationships, brands are likely to engage their partners with performance-based deals. Not only will brands be able to get the best output using this strategy, but the best-performing influencers are also likely to get bonuses. Hence, it’s a win-win for everyone.
7. Authenticity will be key
As people become more knowledgeable about the digital landscape, their expectations will also shift. Influencers won’t be able to get away with false recommendations. Hence, both brands and influencers need to be careful about the type of product they market as their audience has become a lot more perceptive about what is authentic and what is not.
As more and more companies move their businesses online, they are starting to realize how crucial influencer marketing is to their game plan. There was a time when people didn’t take influencers as seriously and only thought of them as a passing phase. But the growing prominence of the influencer industry has taught us to be open-minded. Now, as we steadily move towards a virtual world created by the likes of Metaverse, we are going to see more advanced forms of influencer marketing, i.e. CGI influencers. This is not to say that influencer marketing is perfect in any way. But it has proven time and time again that marketers must adopt new and innovative ways to promote businesses.