3 Things We Know About Influencer Marketing

In 2014, Ypulse told readers about the burgeoning “Instagram Economy” allowing the online-famous to make big bucks by partnering with brands—and since then we’ve kept close tabs on the growth and evolution of influencer marketing.

We named online influencers as one of the stars of 2016 marketing, noting that 2016 marked the year it went from a niche tactic to a majorly mainstream industry. At this point, digital influencers’ allegiances with brands have become expected: According to Ypulse’s recent influencer marketing research, 40% of 13-34-year-olds have purchased something that an online celebrity spoke about or recommended. In addition, 33% of 13-34-year-olds say that when they see #ad or #spon posts they understand that online celebrities need to make money, and 31% say it’s not a big deal.

An entire industry has been created around connecting brands across industries with the right influencers. In 2016, YouTube took a major step in supporting creators with the purchase of influencer marketing network FameBit. When Ypulse interviewed FameBit founder Agnes Kozera in March 2016 (pre-YouTube purchase) she called influencers “the next generation celebrities,” and told us:

 “They created incredible shortcuts for building brand affinity and recognition as well. By working with an influencer, a brand not only gets an ambassador, they get incredible high-quality content and they also get distribution of that content to an already engaged audience. So previously those assets were very separated, you either got content, you either got an ambassador, you either got distribution—here you get everything in one. In many ways brands are now seeing that influence marketing is incredibly powerful…By partnering with just a few people, at three or four, you are able to reach hundreds of thousands, if not millions of engaged audiences.”

 A little more than a year later, and the influencer economy is continuing to explode. But while many brands are clamoring to be a part of it, the industry is changing, and information about its effectiveness is being debated. Here are three things everyone should know about influencer marketing now:

 1. Digital Celebrity Influence Can’t Be Denied

There’s a reason that influencer marketing has become a hot commodity. Ypulse’s own research reveals that 49% of 13-17-year-olds and 42% of 18-34-year-olds tell us that they follow online celebrities / creators (bloggers, vloggers, YouTubers, Instagrammers, social media stars, etc.) on social media. We have also found that these digital celebrities hold more marketing clout than Hollywood celebrities. Young consumers are most likely to buy a product that online celebrities recommend, and most likely to say they would like to see them as a spokesperson for a brand. Overall, 13-34-year-olds also view online celebrities as the most relatable/authentic and the most interesting. The power of digital celebrity can’t be denied, or ignored, but it’s a complicated marketing space…

2. It’s an Increasingly Crowded Space—So the Bare Minimum Doesn’t Cut It Anymore

According to a 2016 survey from influencer platform Linqia, almost half of marketers in the U.S. planned to boost their influencer marketing budget in 2017, and only 4% said they plan to decrease. A related study by TapInfluence and Altimeter Group found that three-quarters of marketers believe ongoing ambassadorships to be the most effective use of influencers, followed by product reviews, and then brand mentions. Recent reports by influencer marketing agency Mediakix claim that Instagram influencer marketing alone will exceed $1 billion this year, and $5 to $10 billion in 2019. Projections like those—and the number of #spon and #ad content filling up users’ feeds—indicate that the marketing tactic is growing at a massive rate. But that growth also means that the space will have to change. What was once innovative is expected, and brands that expect that just getting an influencer to hold their product will give them a major sales boost may be disappointed. As influencer marketing grows and ages, new approaches will need to be taken to stand out. 

 3. Brands (& Influencers) Need to Be Transparent

Those #spon and #ad tags that we’ve mentioned are no joke. Brands and influencers have gotten into trouble for not appropriately marking their sponsored posts, and as the space matures the rules and regulations around it are becoming more clear, and more tough. The U.S. government is cracking down on Instagram influencers, recently sending out 90 letters to both influencers and marketers to remind them about transparency rules and warn about violations. Being transparent about sponsored posts and videos isn’t just a serious legal obligation, it’s also key to keeping young consumers on your side—81% of 13-34-year-olds tell Ypulse they believe that if someone is paid to post on social media, they should be required to mark it as an ad. While they have come to expect that influencers will make money by partnering with brands, they count on digital celebs’ authenticity. Feeling like the wool is being pulled over their eyes when paid posts are treated as personal endorsements will lose their trust. 

MaryLeigh Bliss, Chief Content Officer, YPulse

YPulse will be presenting their latest insights on influencer marketing at YMS NYC 2017. Haven’t got your tickets yet? Head on over to our event page for more information on the biggest youth marketing festival in the US.