Influencers have forced brands to communicate with consumers in a more personal and down-to earth way, that’s proving very effective. Influencers’ ability to spotlight new places, premiere collections or raise the profile of brands and destinations is powerful, and often very valuable when channelled correctly.
Crowd gatherers and pleasers
The term “influencer” means a social media personality with over 10,000 followers. In China and parts of south-east Asia, they are known as KOLs (Key Opinion Leaders). They can range from celebrities and designers to musicians, TV personalities, fitness specialists and entrepreneurs, and a fair number of self-styled influencers who have gained followings for their appealing imagery and tone of voice.
Their role is to show off, build relationships and leverage power on most social media platforms around the world, with image- or video-led platforms being the most powerful, from Instagram and Snapchat to YouTube, Douyin/TikTok and WeChat, as well as live-streaming platforms like Meipai and Yizhibo. Influencers’ appeal lies in their down-to-earth communication style and the communities that form around them, which consumers tend to trust more than celebrity endorsements and advertising.
Media-savvy young people are the most engaged with influencers, according to Olapic/CITE research into the social media use of people aged 16-61 in United States, UK, Germany, and France. The survey found that 53% of 19-24-year-olds follow Instagram influencers, while 45% of those aged 35-44, 65% of 45-54 year-olds and 79% of people in the 55-61 bracket don’t follow any influencers.
Diverse areas of influence
Deloitte research shows that the impact of influencers can vary depending on market level: while they’ve been shown to impact fast fashion spending, their impact on luxury purchases is lower. However, when it comes to firming up the purchasing decision, influencers have more power, with 36% Chinese millennials saying influencers are as important as the brand in helping them make decisions. In Italy the proportion falls to 27%, to 24% in the US and 22% in the UK.
In terms of travel, influencers can also be effective, but primarily with younger consumers. A study by WARC found that affluent travelers over the age of 55 are unlikely to follow any travel influencers, while 75% of 16-34-year-olds had seen posts from travel influencers and 53% of this group had visited a destination they had seen in an influencer’s posts.
Is it all really worth it?
Many brands have embraced influencers as an affordable and effective way to spread their messages, through people that consumers trust. And as consumer trust in brands has fallen, savvy influencers have realized their power and the cost of influencer partnerships has risen accordingly. The highest-profile global influencers can charge as much as $1m for each brand-sponsored post.
Brands spent an estimated $1.8bn on Instagram influencer campaigns in the US in 2018 alone, according to Mediakix, which predicts the American influencer economy could hit $10bn in value by 2020. Influencer platform Traackr found that 72% of major brands it surveyed are dedicating “sizable” budgets to influencer partnerships. In China, the KOL economy is even bigger and arguably more powerful, with CBNData estimating the market has doubled in size since 2016, to reach $17.16 billion.
As prices rise and social media users become demanding, brands’ influencer campaigns are becoming more nuanced. Big-name influencers such as Kris Wu or Kylie Jenner may not have the same impact on sales as those with smaller, more engaged followings. Research by Gartner/L2 found that in China, famous influencers such as Angelababy and Chris Lee have a low ROI for brands, while those with smaller followings of 40-60 million are the “sweet spot” in terms of value and effectiveness.
Many leading influencers have been criticized for their lack of transparency and honesty, whether neglecting to tell their readers that a post is sponsored or bumping up their numbers with fake followers in order to buoy their fees. These fake followers “like” and repost influencers’ content to make them seem more popular. Brands are now cracking down on fake followers after a Unilever executive called for “urgent action” to clean up the influencer ecosystem, and restore trust for both brands and consumers.
As a result of the influencer economy becoming less transparent, brands and consumers are turning to less high-profile names, who are seen as more credible and genuine. These “micro-influencers” have a following of 10,000-50,000 and tend to offer more specific content. On YouTube, they’re particularly popular for tutorials, and videos of shopping hauls or unboxing new products. On other channels, such as Instagram, they are becoming more important because they have a more honest and intimate approach than the gloss of the major influencers and KOLs.
When done correctly, leveraging influencers’ positive impact will help merchants build a new relationship with customers, their younger audience especially, more porous than their elders yet incredibly discerning.
Merchants considering working with influencers should carefully research the reach and conversion rates of influencers, as well as their followers’ engagement levels. Choosing influencers wisely, and working with them to develop the best content, has been shown as the most effective method to harness their power. Failed campaigns are often a result of inauthentic content, or unrealistic expectations on the part of the brand