Are Influencers Now More Prominent than Social Media Ads?
While influencer marketing has taken on a life of its own in recent years, it’s actually not a new idea. Back in the day, you would see celebrities on TV commercials for certain brands. Movies would also allow companies to sponsor production and their products would appear in the final edit. The foundations of influencer marketing may have shifted, but the marketing technique has its roots in TV advertising.
Read More: Is Influencer Marketing Still Kicking?
These days, the phrase ‘influencer marketing’ conjures images of Facebook, Instagram, and the world of social media. People build a following on social media, have millions of responsive followers, and then team up with companies to earn extra revenue.
In truth, it’s a relationship where everybody wins — the company gets its products in front of a responsive audience, the audience gets access to the best products (often at a discounted rate), and the influencer receives payment or commission for each sale.
For many years, businesses had access to both ads and influencer marketing. Now, it seems as though social media websites are pushing the latter more aggressively. Some industry experts believe that influencer marketing plays a bigger role than Ads do on platforms like Facebook.
Read More: Does Influencer Marketing Actually Work?
With 2.7 billion active monthly users, Facebook is the largest social media platform, with the most influencers. However, it’s fair to say that the following also have plenty of influencer opportunities for advertisers:
- TikTok
- YouTube
- Snapchat
Businesses choose their platform, find their audience, and team up with influencers to generate conversions.
Changing Attitude for Social Media Giants
Over the last twelve months, advertisers on Facebook have noticed a definite change. For a while, it was all about advertising and spending money on ad campaigns. Now, Facebook encourages more clients to use influencers (even at the cost of advertising campaigns).
Could this be a result of iOS 14 and Apple’s latest attempt to frustrate social media websites? Towards the beginning of 2020, Apple revealed that the iOS 14 update would contain App Tracking Transparency, a feature that allows users to stop tracking for particular apps. As around 60% of people prepare to reject tracking, this causes a data issue for advertisers.
Though Facebook has been the most outspoken platform, it affects all social media platforms. The initial App Tracking Transparency announcement caused some anguish among marketers and Apple agreed to delay it until 2021. We’re now in 2021, and the feature is live. Almost overnight, advertisers lost access to the conversion data of a large chunk of iOS users.
What does this mean? Well, ineffective advertising campaigns. You may have even logged into your own Facebook account to see a drop in performance. The pixel isn’t updated as frequently, retargeting and lookalike audiences are more difficult, and more of the marketing budget is wasted. This is difficult to take coming from a world where data was everywhere, and campaigns were optimized at every turn.
Taking a step back from our advertising problems, the update also means big problems for Facebook. Why? Ineffective campaigns cause businesses to look at other advertising techniques. Advertisers aren’t getting as much from their money, and they’re likely to pull ad campaigns if they can’t rectify it.
For many, money is the crux of the argument between Apple and Facebook. At the moment, Apple isn’t getting any revenue from the Facebook advertising system. While Facebook makes billions of dollars, Apple provides much of the technology and doesn’t see anything. With iOS 14, app developers no longer generate revenue from ad space, so they’re forced to charge for subscriptions and in-app purchases instead. Now, Apple has twisted the odds in its favor.
In return, Facebook has expanded the Conversions API where many advertisers are getting effective campaigns once again while using artificial intelligence and machine learning. What’s more, Facebook is also leaning into the change and encouraging advertisers to try influencer marketing.
New Influencer Marketing Features on Facebook and Instagram
When it comes to influencer marketing, one of the most difficult aspects has always been getting a return on investment. How do you prove the return on your influencer marketing investment? Although we look to post engagement, swipe-up links, and even promotional codes, they aren’t perfect. In a dream world, advertisers could quickly see which influencers generated product sales (and the efficacy of specific campaigns).
During Creator Week, Mark Zuckerberg revealed that more features would come for both creators and advertisers using influencer marketing. For example, this includes new campaign measurement tools so that advertisers can learn the ROI of individual campaigns with just one click.
Additionally, Zuckerberg said that a new native affiliate tool will come to Instagram in the coming months. Here, creators can use Instagram Checkout to learn about the many different products available for purchase. From here, they can share these products and earn a commission for all sales generated. The whole process takes place through Instagram, and it’s self-fulfilling for both creators and companies.
When a creator posts about a product, Instagram will make it very clear that the post is eligible for commission with a warning at the top. If the user taps through and spends their money, the creator will receive a commission and the company will receive an extra sale (one that otherwise may not have occurred).
In these early stages, Instagram is testing with Sephora, MAC Cosmetics, and a few other large brands. In the future, it hopes to open the native affiliate tool to all influencers on the platform.
As a business, this means that you can make your products available for influencer marketing. Now, you don’t even need to seek out the right influencer and build a relationship with them. Instead, they find YOUR products and decide to post because they like what they see and know about the brand. You get extra advertising and most of the revenue from the sale, with a small percentage going to the influencer.
Another new feature on Instagram allows influencers to earn additional money while streaming a live video. With new Badges, users can send between $0.99 and $4.99 while watching. Facebook also has a similar feature for gaming streamers: users send Stars (with each one worth $0.01). Creators also earn bonuses for streaming with other accounts and completing other challenges.
Zuckerberg and his team seem intent on making both Facebook and Instagram more attractive for creators. As more people come to prominence on the platforms, this creates opportunities for businesses, and it could compensate for the messy situation currently ongoing with the advertising system.
According to Facebook, all these features show the intent of the two platforms to help creators make a living. One bonus that Facebook announced is that all these features will remain free until at least 2023: this includes online events, badges, fan subscriptions, and various other features.
These are just the latest in a string of new features for both creators and advertisers that encourage influencer marketing and make it a more viable option for all parties. During the pandemic, for instance, Instagram continued to invest in improvements for Reels and Instagram Shop.
While creators have the infrastructure to make a living on the platform, businesses have the foundation to work with creators and encourage conversions without customers having to leave the Instagram or Facebook apps.
Read More: How Marketers are Using AI to Create and Manage Facebook Ads that Convert
The Rise of Influencer Marketing
When looking for the origins of this modern form of influencer marketing, it’s hard not to look at YouTube. Personalities built a following, with gaming at the center, and they attracted sponsors while developing business relationships with brands. Today, the market is more defined, and we’ve gone through turbulence and controversy to develop boundaries. Now, commercial relationships are clear, and users are warned when posts are sponsored.
To really show the development of influencer marketing in the decade since these early days, here are some statistics:
- The market will be worth nearly $14 billion by the end of 2021
- Three-quarters of businesses that use content marketing set funds aside for influencer marketing
- Around 35% of businesses still pay influencers in free products or discounts rather than cash
- Between $1,000 and $10,000 per year is the most common influencer marketing budget (you don’t need to be a multi-national corporation to enjoy this marketing technique)
- 90% of businesses in one survey admitted that ROI is at least equal to (but higher than, in many cases) other marketing techniques
With Instagram Stories, TikTok, Facebook posts, and so many other types of content, influencer marketing is only growing more effective. Facebook and other social media giants are encouraging this growth with new features. As well as accommodating creators to make a living from the platforms, they’re helping businesses to measure campaigns. Is this to overcome the ad shortages created by iOS 14, or is this the new norm for the marketing industry?
