What is influencer Marketing?

Influencer marketing involves endorsements and product placements by influencers, who are individuals with expertise or influence in specific topic areas or communities. This is a marketing channel that engages with the creators of content and their audiences through native placements rather than through paid ads.

The impact of influencer marketing is astounding

image courtesy Sandy Diao

- People trust influencer opinions: 90% of people with access to the internet trust recommendations from social media influencers (Grin, 2022).

- Distrust in companies who sell themselves: 2 out of 3 consumers don’t fully trust companies (Edelman, 2019).

• Consumers prefer to learn through influencers: 44% of consumers prefer to learn about products and services through short video content (Wyzowl, 2024).

- Even businesses trust influencers: 86% of software buyers use peer review sites such as G2 when buying software (G2, 2022).

- Influencer content is prevalent in search: When someone is searching for your brand, independent mentions of your product will often show up on Google search before your own website.

Influencer Marketing Stats

Compared to the broader digital ad spend, influencer marketing remains a small slice of the budget, but it's starting to grow:

- Spend is expected to hit $7.14 billion, up 16% from $6.16 billion in 2023.

• This is just a fraction of the $389 billion and $225 billion spent on performance marketing and brand awareness ads respectively. Digital marketing spend overview (2024 estimates) Source: eMarketer ‘23)

Additionally, influencer marketing already has the makings of a highly performant growth marketing channel:

1. Expected return on investment is 5x and on par with or better than other channels.

   • Businesses earn an average of $5.20 for every $1 spent on influencer marketing (Influencer Marketing Hub, 2022).
   • 89% of marketers say that the ROI from influencer marketing is comparable to or better than other marketing channels (Mediakix, 2022).

2. Most teams have tried it, or plan to increase budgets.

   • 93% of marketers have used influencer marketing at some point (Influencer Marketing Hub, 2022).
   • 72% of major brands plan to increase their influencer marketing budgets in 2023 (Business Insider, 2023).

3. There’s no other channel that can compare with its potential reach.

   • There are 5.17 billion social media users worldwide as of 2024, which represents 65% of the global population (Statista, 2024).
   • The average social media user engages with 6-7 different social platforms per month (Hootsuite, 2023).

4. Influencers are changing how people buy things.

   • 49% of consumers depend on influencer recommendations for their purchase decisions (Morning Consult, 2023).
   • Short video content on platforms like TikTok and Instagram Reels has become a primary source for product discovery for 67% of Gen Z consumers (Wyzowl, 2024).

Current State of Influencer Marketing

Despite the ubiquity of social media, influencer marketing is not yet fully capitalized on due to:

• Difficulty in systematically reaching creators.
• Challenges in measurement, leading teams to prefer tracked ad channels.
• Fear of “scammy” creators who might not deliver results.
• Limited know-how: In April, there were only 120 job openings with an “influencer marketing” title, compared to 10K openings for “product manager” roles (LinkedIn, 2024).

Current goals in companies In many companies, influencer marketing often isn’t fully integrated with primary business goals and is viewed as driving fluffy outcomes. This can sometimes result in influencer marketing being thrown into community management or brand marketing world without clearly designed objectives.

As a result, influencer marketing tends to be used primarily for increasing brand visibility and user-generated content, with less emphasis on driving measurable business outcomes like customer acquisition or revenue growth.

Integrations into marketing programs Instead of being a standalone tactic, influencer marketing can be integrated into various marketing goals:

- Customer acquisition programs: Influencers drive traffic and conversions through promotions, discounts, or other direct calls to action.

- Content marketing: Partnering with influencers to create or share content that educates, entertains, or informs.

- Creative generation: User-generated content (UGC) featuring customers who speak convincingly about a product's advantages.

- Product launches: Collaborating with influencers to create buzz and drive initial interest and adoption for new products.

- Brand awareness marketing: Working with influencers to gain reach among wider or targeted audiences and see a lift in brand sentiment or awareness over time.

Credit Special thanks to Sandy Diao for this overview of Influencer Marketing. Check out her online course if you want to get really smart in the space.