Influencer marketing, which refers to leveraging the social media presence of influencers to promote products and services, has evolved over the last few years. A 2020 study of influencer marketing found that 73% of marketers had increased their budgetary allocation for influencer marketing over the last year. 60% of markets said they believed influencer marketing gave a better return on investment than traditional advertising. Halfway through the year, this is a good time to consider how influencer marketing is evolving in 2021.
Each year of the last few years has seen marketers increase their use of influencer marketing. 2021 is no different. The number of social media platforms may have changed, with TikTok playing a bigger role than ever, but the trend remains the same. TikTok has exploded since its arrival and is now a mainstream platform that no marketer can afford to ignore. Marketers have learned that a scattergun approach is suboptimal. It’s clear now that you have to focus your energy on the platform that your most profitable segment of customers prefers. This is the simplest, and most profitable path for brands to take. You target a passionate audience on the platform they love and generate meaningful returns.
By the end of the year, influencer marketing is expected to be worth $13.8 billion, its highest valuation ever. Since 2019, the market has attracted over 240 agencies and platforms. This show of strength is reflected in marketing budgets. We expect that 75% of brands will allocate some portion of their marketing budgets to influencer marketing. Brands seem comfortable to develop long-lasting associations with influencers, with many brands choosing to continue working with the same influencers in subsequent campaigns. Influencers are paid in a variety of ways, according to their standing. The bare minimum expectation is that influencers receive products or discounts in payment for their services. Brands have different ways of measuring the success of a campaign, most of which centre around sales. For instance, a brand can study the number of people who used a discount code when purchasing a product or service. TikTok is a very important platform when it comes to this strategy, but as we said earlier, the best platform is the platform your most profitable customer segment loves.
In the past, brands would look for influencers with big audiences, but many are finding success by working with influencers based on a combination of the size of the influencer’s audience, and the interests of their audience. For example, if your brand sells sunglasses that protect eyes from blue light, you could approach an influencer who has 1 million followers, but if only a small fraction of them are interested in these sunglasses, it is better to work with a less influential influencer, whose audience loves these amazing sunglasses. This realization has led some brands to trim the number of influencers they work with and focus on those who actually generate revenue.
An interesting trend that has emerged is using employees to create content for their firm’s social media platforms. It’s not yet clear how effective this strategy will be, but it is certainly interesting.