Why is Influencer Marketing more profitable than advertising?
Professionals in diverse industries, such as fashion and cosmetics, have clearly understood that to generate income, produce traffic, and launch new products, they have to bet and focus on influencer marketing.
Over the last three years, 60% of fashion and cosmetics brands have devoted a large part of their marketing budgets and investments to influencer marketing. Influencer marketing’s attractiveness can be summed up in two key points:
- Fast ROI (Return On Investment)
- The ability to reach the right audience more quickly.
In the United States, several studies claim that for every $1 spent on influencer marketing, the ROI averaged $6.85, an ROI that will continue to increase in the years to come.
How can we explain the success of influencer marketing? Content created by influencers is authentic: influencer marketing only works if the content is genuine.
We grant much more credit to content published by a Youtuber we follow than to an email from a brand touting the merits of a product or service. Today, the vast majority of consumers prefer consumer feedback to brand messages. Indeed, this information is much more authentic and greatly facilitates the act of purchase.
Contents reach a wider audience than brands. We are 1.650 billion Facebook users, we spend an average of 3 hours per day on social networks to read, comment and share content (texts and videos); contents very often created by influencers. Content created and published on social networks — if informative and authentic — will automatically reach a wider audience beyond the sole commercial audience of the brand. This is due to the information being much more focused. No one wants to read a lot of technical documentation before buying a product.
We prefer to push the door of social networks, Google or YouTube before visiting an advertiser’s site. Of course ads guide us to the site of the advertiser, however the CTR of an advertisement is 0.06%, very much lower than the rate found on social networks. Moreover, more and more users everyday (+ 45% of Internet users) block the advertisements online with ad-blockers.
The line between advertising and influencer marketing is blurred: When content is very well executed, we have great difficulty seeing whether it is sponsoring or actual content of the brand.
Influencer marketing platforms, in their best practices, ask influencers to mention the source of the product, to say that the content viewed is sponsored or to use specific hashtags, but this is not always sufficient to distinguish between paid and Earn media.
Consumers become brand ambassadors and according to a study published by McKinsey, viral marketing allows to sell twice as many products as a classic advertisement.
Indeed, when you look at a recommendation on the YouTube channel of your favorite influencer, you become not only a customer (advised) but also a faithful ambassador of the brand.
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