In just a few years, influencer marketing has gone from an ancillary expense in many brands’ online marketing budgets to its very own digital advertising category.
As we look forward to 2018, the influencer marketing space is expected to broaden its scope, extend its reach, and strengthen its impact. While the growing landscape brings with it many exciting opportunities, new challenges will also arise.
With marketers looking to measure ROI, not to mention the changes in federal regulations, the emergence of fake influencers and more, the coming year looks to have big implications for both influencers and the brands that partner with them.
1. Influencer marketing continues its meteoric rise.
There is no shortage of success stories in influencer marketing, yet some businesses are only now realizing what they’ve been missing out on.
While there was a 90-fold increase in Google searches for the term “influencer marketing” from 2013 to 2016, interest around the topic has doubled in the first nine months of 2017. During the same time, searches for “Instagram influencer” have more than tripled.
Consistent with year-over-year estimates, businesses are expected to allocate more money toward influencer marketing in 2018.
As the influencer marketplace gets more saturated, however, brands without a clearly defined strategy will find it difficult to break through. Looking at ways to maximize the impact of campaigns, as well as differentiating themselves from their competition, will become key for brands.
2. Influencer demand and value are increasing.
As demand for influencers increases, so do the value of their services. Scott Mathison, an influencer in the fitness industry with over 200,000 followers on Instagram, says that brands approach him every day, asking that he hawk their wares, but he only considers working with companies whom he feels are the right fit for him and his followers.
Mathison admits that as his value and costs have increased, so have his rates. Mathison is no anomaly isn’t alone in increasing his prices. Many online personalities are starting to recognize their value as creators, and businesses would be wise to budget for their services.
3. As investment increases, measuring KPIs & ROI is vital.
While many companies understand the positive impact influencer marketing can have on their brand, some businesses are still nervous about what they perceive as nebulous or anecdotal results.
Fortunately, there are many strategies and techniques that can be implemented to help businesses track key performance indicators (KPIs) and return on investment (ROI).
In a 2016 influencer marketing case study, we examined influencer marketing engagement at the Coachella Music and Arts Festival by analyzing the results from campaigns by three different companies: American Express, Revolve Clothing Co., and Live Lokai. Each brand tapped a variety of influencers to help promote their individual campaigns, and engagement was tracked through monitoring of total audience, likes, comments, and hashtag usage.
In the end, each campaign was able to reach tens of millions of people, driving engagement for the brands both on and off the festival’s site.
Tracking KPI and ROI is achieved through an understanding of relevant metric tools for a particular campaign, best practices for integration, and a detailed evaluation of the results.
Whether your methods include tracking pixels, offering coupon codes, or directing users toward custom hashtags, working with marketers who know how to deliver comprehensive analytics can offer insights beyond just measuring campaign reach, providing models for audience behavior.
4. Multi-channel networks are on the decline.
Some of the world’s largest multi-channel networks (MCNs) have experienced upheavals or undergone restructuring in the last several years.
Maker Studios, owned by Disney, had layoffs in both 2016 and 2017, reportedly shifting focus from 60,000 creators to just 1,000. Other MCNs have started to pivot from their user-generated roots, pursuing brand name intellectual property and production deals.
In 2016, Machinima announced that they and Justin Lin’s YOMYOMF (YouOffendMeYouOffendMyFamily) had partnered with NBCUniversal to produce a digital reboot of Knight Rider. Shortly thereafter, Machinima was purchased by Warner Bros. who revealed plans to fold the MCN into WB Digital Networks.
Expect to see more MCNs pivoting and partnering with entertainment companies to focus on productions, and others reassessing their place in the digital landscape for 2018.
5. Video marketing will become essential for reaching online audiences.
In 2018, video will become even more vital to digital outreach as the numbers continue to prove its superiority over other advertising mediums.
According to a study cited in Business Insider, video can be twice as effective in driving sales as text-based ads. Moreover, the report indicated that those influenced by video tend to be active shoppers.
Social media platforms are well aware of the statistics, evidenced by their continued investment in new video services. Last year, Instagram launched “Stories” to compete with the popular, correlative feature available on Snapchat. Facebook, the world’s largest social network, recently announced “Watch,” which will premiere with video channels for celebrities and premium content producers, but eventually be “a platform for all creators and publishers to find an audience, build a community of passionate fans, and earn money for their work.”
While businesses are expected to up their video ad investments, an ever-crowding marketplace means visibility and engagement are not always proportional to dollars spent. Instead, those who know their audience and can find ways to engage with them directly, will see the greatest ROI.
6. 2018 might be the year of the Instagram “Story.”
2017 was supposed to be the year of “live” video.
While engagement certainly increased, the feature hasn’t been the panacea some had predicted. Still, many forecasters are looking past live video to technologies, such as 360, virtual, and augmented reality as the next new, big thing. However, this brings into focus the trouble around many social media predictions: They’re often wrong.
Going into 2017, Snapchat was the social media platform to watch as it garnered huge media buzz and launched a successful IPO. However, Snapchat Stories use is down as much as 33 percent among top influencers (while they post twice as much on Instagram Stories).
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7. Expect more lawsuits against individual influencers and brands.
Last year marked the first time that the Federal Trade Commission (FTC) filed a case against individual influencers over a failure to disclose ownership ties and paid sponsorship promotions.
With the commission recently sending letters to more than 90 influencers and marketers over compliance issues, lawsuits against influencers and the companies that partner with them are becoming more common.
Yet, up to 90 percent of paid endorsements remain undisclosed by influencers and brands.
Moving forward, it’s incredibly important that influencers and brands are aware of FTC guidelines, and obey them when marketing or promoting online.
8. Instagram will surpass 1 billion users.
At its current rate of growth, Instagram is set to exceed 1 billion users in 2018.
Influencer marketing on Instagram is currently a $1 billion industry, and it could reach $2 billion by 2019. The mammoth platform offers incredible opportunities for partnerships between influencers and businesses; however, with an estimated 2.7 million sponsored posts, the problem of cutting through the clutter has become a stark reality.
To stand out in the coming year, influencers and brands will have to forge relationships, design campaigns, and create distribution plans that are superior to that of their direct and indirect competitors.
9. Brands will get more specific about their social media demographics.
According to Pew Research Center, “69 pecent of the public uses some type of social media.” While young adults continue to account for the bulk of use, adoption by people of all ages has increased steadily over the last decade. In fact, those in the 65 and older category increased adoption by 27 percent from 2010 to 2016.
Customers feel closer to businesses that understand their habits and needs. Paying attention to demographic characteristics helps to identify places where businesses can connect with audiences organically.
10. Social media managers will combat fake followers and artificial engagement activity.
Building a fake Instagram account with paid followers is relatively easy. This can be a hard and expensive lesson for brands.
To avoid “Instascams,’ it’s important for businesses to incorporate an airtight process for vetting influencers—especially in the case of smaller and less well-known accounts. To ensure your dollars are going as far as they can, don’t rely on automated processes. Instead, work with companies that have deep knowledge, strong relationships, and proven expertise in influencer marketing.
Jeremy Shih works for Mediakix, a leading influencer marketing agency. A version of this article originally appeared on the Mediakix blog.