The Economist April 2nd 2022 pp49-50 |Business|The future of marketing|”The rise of the influencer economy”
Read The Economist for all the detail
Summary by 2244
Imager from georgiasown.org
Increasingly, the days of luxury brand promotion being the domain of “an exclusive group of white actresses with the right cheekbones” are being replaced by girl-next door or boy-next door influencers who “repackage a brand’s message in a way that is harmonious with their voice, their followers’ tastes and their platform of choice.” The new wave of social media influence reportedly comes at a fraction of the cost of traditional star-studded advertising campaigns that could be as high as $100M.
In 2020 influencer marketing was used by 60% of marketers but is increasing and is forecasted to hit more than 80% by 2025. Use of social media for these campaigns will increase similarly with Instagram at 60% in 2020 and predicted to hit 80% by 2025. By comparison Facebook will hit 60%, TikTok~56%, YouTube ~45%, Twitter ~27% and Snapchat 20% by 2025. “Brands’ global spending on influencers may reach $16B this year" or 10% of social media advertising spend.
Influencers have large followings and popular ones are astute users of social media and production-”they are video editors, scriptwriters, lighting specialists, directors and main talent wrapped into one.”
Companies are interested in understanding effectiveness of various marketing campaigns and track a metric known as “media impact value” or MIV which “reflects how much a brand would need to spend to gain a given degree of exposure.” The article suggests that at least some influencer campaigns create more MIV than conventional campaigns.
Of course, there are potential downsides. Individual influencers, whether contracted or not, may be more difficult to manage in controlling the firm’s message, than media superstars tied to lucrative and restrictive contracts. Regulators are concerned that influencers are seen by followers as a “trusted friend” rather than being labeled as promotional as well. Some brands worry that the influencer-led social media channel devalues their brand. Accordingly some brands make clear that their “social media presence…is…influencer-free.” The sense, though, is that more “feel the benefits [of influencer-based social media] outweigh the costs.” Flavio Cereda-Parini (Jefferies) claims that to be a top-ten brand “you have to know how to play the digital game, If you don’t ‘you are not going to be top ten for very long.’”