Growth in Influencer Marketing, why is it so?
Just a decade ago, the term influencer marketing was almost unheard of. However, today it has become one of the more popular buzzwords among marketers. It has now become a common sight for influencers to work with brands to market things on social media.
Growth in influencer marketing
In 2016, the influencer marketing industry was reported to be worth $1.7 billion. The following year, the industry expanded by twice its size, and was valued to be at $3 billion. The latest numbers show this rapidly growing industry has hit new highs of $4.6 billion (2018), with numbers expecting to grow beyond that amount.
This growth is backed by other statistics. For example, Influencer Marketing Hub reported that 63% of businesses who do budget for influencer marketing intend to increase their spending over the next 12 months. The term influencer marketing has also gained significant traction, with Google Searches for Influencer Marketing growing 1500% in the span of 3 years. (2015 – 2018)
It remains undoubted that influencer marketing is expanding at an exponential rate. However, you might ask the question of why is this so?
Why is influencer marketing so popular?
Influencer Marketing Growth Reason #1 Adblockers
With 3.5 billion users active social media users (HootSuite), social media seems to be the way forward for marketers.
However, adblockers have become an increasingly worrying trend. PageFair puts the number of users with adblockers at an astonishing 181 million.
This has made influencer marketing the preferred choice of reaching social media users for some. This is because working with influencers to market a product bypasses adblockers.
Influencer Marketing Growth Reason #2 Number of people online
With increased internet penetration rates in developing countries, the number of social media users have been on the rise. With latest statistics indicating new highs of 3.5 billion social media users (HootSuite, 2019).
To add on, it seems like the time spent on social media has also been steadily increasing. GlobalWebIndex reports that the average social media user spent 2 hours and 16 minutes each day on social platforms as of 2019, a slight increase from the year before.
Therefore, the large but steadily increasing numbers on social media is one of the motivating factors behind the rapid incorporation of influencer marketing.
Influencer Marketing Growth Reason #3 Flexibility of influencer marketing
As mentioned above, a sizable number of marketers are intending to invest more in influencer marketing. This could be because of the flexibility influencer marketing allows.
Apart from the obvious returns of influencer marketing (branding, sales etc), the scalability / flexibility of influencer marketing has accounted for its high take up rate in the recent years.
Curious marketers often ask ‘how much would an influencer marketing campaign cost’. Well, there is no definitive answer and that is the beauty of influencer marketing.
Influencer marketing, to a certain extent, is flexible in terms of budget. The cost of a campaign is based on factors such as the number and type of influencers hired. For a smaller campaign, simply scale it down to a few micro influencers, to help accommodate budgets.
Therefore, the flexible nature of influencer marketing can be considered one of the main reasons behind the growth in this industry.
Influencer Marketing Growth Reason #4 The ROI
The Return of Investment (ROI) of influencer marketing can be higher than expectations due to the nature of social media. With increased connectivity (people get to share things at a click of their fingers), viral marketing is possible with the correct content created.
A new study by Nielsen Catalina Solutions found some astonishing results from an influencer marketing. They found that Households exposed to a particular influencer marketing campaign purchased 10% more products than the control group. (Baer, 2016)
Hence, the attractive ROI might be one of the underlying causes behind this surge in influencer marketing.
Influencer Marketing Growth Reason #5 Changing Habits
According to a study by Oglivy, 74% of consumers identify word of mouth as a key influencer in their purchasing decisions. In the past, word of mouth was only constrained to people in our immediate periphery. These include the friends, family and relatives we talk to.
However, with the invention of social media, the numerous opinions online make social media the ideal location to go to whenever we are interested in a product. Be it leisure browsing or to do further research, the plethora of information found online has caused a slight shift in consumer behaviour.
For example, a friend’s recommendation might cause one to purchase a laptop. However, today many of us would scan the net to see what others are saying about laptops on the various social media sites.
Besides, the interactive nature of social media encourages consumers to incorporate these sites into their purchasing journey. Asking questions online before making a big purchase has become a common might be familiar to many of you there.
As Social Media Today states “In the past advertising used to be more overt, but now the factors that influence your decisions (the opinions of those you care about) are being presented before you every day – you may not have realized you want to purchase a new pair of boots, but that Insta post from your friend, including their trusted opinion, has started you on that pathway.”
The sharing nature of social media has given rise to a new phenomenon, where people look at those online when deciding whether or not to purchase an item. Hence, this explains the growth behind influencer marketing.
Will this growth continue?
With experts predicting influencer marketing to further grow into a $6.5 billion industry in this coming year, it is likely that influencer marketing is here to stay. After all, what we are seeing now is just the tip of an iceberg. There remains potential for growth in this industry. This is especially so with the number of active social media users hitting new highs each year. (3.5 billion as of late) Therefore, let us embrace influencer marketing and the possibilities it brings!