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If you think about the biggest commercial innovations over the past century or so you start to see a common thread. Whether they’re products or services or something else entirely, these ideas don’t just succeed in the marketplace—they spawn entire industries around them. The automobile, once it gained traction with the public, spurred the creation of all kinds of new businesses: gas stations and auto mechanics obviously didn’t exist before cars were invented; roadside diners and motels began appearing alongside the most popular routes taken by road trippers.
It’s the same with influencer marketing. Once the practice really caught on, we saw an influx of new ventures sprouting up in IM’s orbit. Influencer talent agencies are everywhere, and entire marketing firms built around influencer campaigns are now the norm. There’s plenty of software to help internal marketing departments do it themselves, and there are marketplaces where the entire influencer lifecycle—from recruiting to activation to payment—can be managed with ease.
With all these new businesses created in the wake of influencer marketing, there have been an incredible number of jobs created. But there’s one job that goes unnoticed, and it’s one that consistently pops up any time something new comes along and disrupts The Way Things Are Done: the professional naysayer.
Do a Google search on the phrase “the death of influencer marketing,” and you’ll see a remarkable number of articles dedicated to the idea that influencer marketing is either dead or dying. And the writers of these pieces are coming up with some pretty wild theories about what or who is responsible. Now, the history of innovation is littered with quotes from people who’d say it will never work. In 1899, a journalist described the notion that cars would ever catch on as “visionary to the point of lunacy”—and you can see pronouncements just as bold as this regarding influencer marketing.
While we don’t yet have the benefit of hindsight to see how far off the mark such declarations can be, we really only need to look at what’s going on right now to see that rumors of influencer marketing’s death have been greatly exaggerated.
Cause of Death: Instagram’s New Timeline
Back in 2016, Instagram redid the way users saw new posts in their feeds, changing it from a reverse chronological presentation of followed accounts to something decidedly more algorithmic. In this Forbes article posted on July 2019, the author posits that this change will “go down in history books as the death of influencer marketing as we know it.” The reasoning here is that the new algorithm meant you couldn’t really be sure whether or not your influencers’ posts would be seen, as there seemed to be no rhyme or reason to how content was displayed.
The problem with this logic is in the actual definition of an algorithm: “a process or set of rules to be followed in calculations or other problem-solving operations.” An algorithm is all rhyme, all reason. Dig into how Instagram’s algorithm serves up content, and the idea that it was harmful to influencer marketing becomes even harder to believe: the two biggest factors are engagement and relationships. In the simplest terms, this means:
- Posts that get good early engagement are bumped to the top of other people’s feeds
- Followers who regularly engage with an account are going to get shown future content form the same account at higher rates
These two criteria are the foundational tenets of a successful influencer campaign, and actually works to a marketer’s advantage—they can ditch poor-performing influencers knowing that the system rewards those with tight relationships and high engagement. Prior to the change, according to TechCrunch, IG users were missing 70% of all posts from accounts they followed; now, they’re seeing 90% of them and staying on the app longer. Meanwhile, the 2019 influencer marketing spend on Instagram is on pace to increase 2.5x over 2017.
Saying the change to the timeline killed influencer marketing is like a doctor defibrillating a stopped heart, and then calling the time of death at the moment it started beating again.
Cause of Death: The H Hub
Here’s Forbes again, this time back in December of 2018, declaring influencer marketing dead and identifying content agency The H Hub as the culprit. This one is kind of a head-scratcher: The H Hub is essentially a creative agency operating as a platform, where brands can find photographers to create content for their own campaigns. Both brands and creators have access to social metrics—likes and engagement and reach—along with other data that serves to measure a creator’s worth. Its similarity to influencer marketing ends there, though: the content is used by the brand to post on their own channels and campaigns. That’s not a knock on H Hub or its service, it’s just that it’s not an apples-to-apples comparison.
If the H Hub is going to disrupt anything, it would be traditional talent or marketing agencies, the middlemen facilitating the search and discovery of content creators—if they’re not just paying their own in-house talent to do it. But the H Hub is about marketing, and they know that influencer marketing is an easier target to go after. Here’s James Cole, founder of H Hub, explaining to Forbes why the Hub is a better route to go than influencers:
With every #sponsored post and every soulless endorsement of a product you don’t truly love, your followers trust you a little less. Then, they buy a little less. Then, the brand trusts you a little less because your followers bought less of their product. Then, the brand pays you a little less. Then, you trust the brand a little less in return….it’s a death spiral, and no, I am not being dramatic.
He’s right that he’s not being dramatic. The situation he describes is very real and happens on the daily. But this situation can’t serve as an indictment of influencer marketing as a whole. In fact, what he’s describing is the incorrect way in which marketers and brands sometimes do things. Soulless endorsements are not what influencer marketing is about. The results may be a “death spiral,” but that’s because the effort going in was doomed from the start. It’s also worth noting that influencer marketing isn’t meant to be a replacement for all other digital strategies. Instead, it’s a piece of a whole meant to complement—and boost—other tactics.
Just a week after Forbes published this post and declared the death of influencer marketing, Statista updated their IM spending stats to include real numbers for 2018. These are just for Instagram, but the story told through numbers is pretty clear. Marketers shelled out $5.6 billion to fuel their campaigns, up from $4.17 billion in 2017 and on pace to reach $7 billion this year. Meanwhile, Linqia’s 2019 State of Influencer Marketing report shows that budgets are increasing and that marketers are increasing the frequency of their influencer efforts: 42% of them report having an always-on strategy.
If this is what death looks like, count us in.
Cause of Death: Lack of Measurable ROI
If you’re a NeoReach customer, you probably know how we feel about ROI. If not, check out this post over at Influencer Marketing Hub, which sums up the issue with it (TL;DR: ROI is a myth in this context, and we’ve come up with a better way to measure effectiveness).
Advertising has never been about getting an immediate, measurable return on your investment. An effective campaign—regardless of the media type—can take months or years to show improvements in sales and revenue. Consider the Super Bowl, which has become legendary for its high-visibility advertising opportunities. Brands pay upwards of $5m for a single 30-second ad, often with the goal of a one-time “brand lift,” according to Fortune magazine. That same article goes on to show that 87% of viewers simply watch the ads for their entertainment value. It also refers to a study done by an ad research firm, which found that 80% of Super Bowl ads don’t boost sales at all. Yet the cost of an ad buy for this once-a-year event keeps going up, and brands are still all too willing to pay it. Why?
Because there’s a value to media exposure that can’t be measured in sales. Brand awareness is a big deal, and that’s something that’s hard to measure in traditional models—like a Super Bowl ad. That isn’t the case with influencer marketing—or any social media advertising for that matter—where you can easily measure the response to campaigns through impressions, engagements, and new followers. What’s more, you can use this data to calculate your earned media value, which is a way of seeing how much you would have spent to reach those same benchmarks using a straightforward paid advertising campaign on the same channel. At NeoReach, we call this Influencer Media Value (IMV), and it’s been a very effective tool to measure what your influencer spend gets you.
We crunched the numbers on over 2,000 campaigns run in 2018 and found that for every $1 spent on an influencer, brands earned $5.20 in media value. This shouldn’t be taken as a guarantee of success; roughly 25% of the campaigns we evaluated did not see a positive IMV, but that only makes the 5x return on media value that much more impressive. And that 25 % have access to enough data to analyze where they might have gone wrong and ways they can do better in the future.
A Premature Diagnosis
As you can see, the declarations of influencer marketing’s demise are grossly premature. All signs point to a booming industry which shows no signs of slowing down. And, yes, we’ve heard of bubbles; we’re aware they can burst. But influencer marketing is still in its infancy. Marketers are still learning the ways in which it can effectively be deployed, while still others misinterpret the whole thing and just look at it as a low-cost alternative to celebrity endorsements. And there are still plenty of others who hear this is the “Next Big Thing” and take that as a guarantee of success. To all those people, we’ve got some advice: chill out.
The industry as a whole and its practices are still evolving. Things will go wrong. Influencers will underperform, or even fraudulently represent their reach and audience loyalty. Marketers may operate with a more transactional, rather than the big picture, approach. The proliferation of opportunistic marketplace platforms has had a tendency to force a so-called “race to the bottom,” where influencers and marketers meet to get things done as quickly and cheaply as possible. All of these things are problems, for sure. But does that mean the whole enterprise is crumbling and should be abandoned? Of course not.
To go back to the car analogy, consider that the first automobiles had ineffective and dangerous braking systems: a piece of wood that pushed against the wheels, using friction to slow the car down. Early automakers were simply more concerned with making their inventions go, and stopping was an afterthought. Critics then called “horseless carriages” unworkable and predicted they’d never catch on. We already know this isn’t the case. Nobody scrapped their slow drive to the future because a few things didn’t work so effectively. They simply kept redesigning the car until they made it better—and they’re still doing that with cars today.
That’s as true about influencer marketing as it is with anything new and disruptive. You don’t abandon forward motion because you didn’t get right on the first—or even second, third, fourth, and so on—tries. When the vision is a sound one, and the rewards are apparent, you keep refining things until you get it right. That’s what we’re doing here, as are our competitors. We’re all looking at ways to move forward, and make things work the way we know they can.
You heard it here first: the death of influencer marketing is dead. And the cause of death: reality.