The influencer economy allows individuals to create opportunities of their own, providing enough room for unveiling new ideas, create strategies, develop business plans, market innovative products and services. It envisages a vision to plan and execute strategies to explore new business frontiers. It is opening up new avenues for people to pursue their passions, skills, and hobbies differently, not as leisure time activities, but as a way to make money, earn a livelihood, pursue a career, and build a business line to excel.

What is an Influencer Economy

The Influencer Economy as a concept is not an entirely new phenomenon for marketers as influencers co-existed in this space as brand ambassadors, selling products and services for a fee. They were, however, a creamy layer of class, who were athletes, celebrities, film personalities, politicians, and corporate leaders. The influencer economy at present is vast, diversified, democratic, and inclusive in many ways. Social media platforms, brands, agencies, influencers, and creators, who are also users of the platform and the content, are the important components of this economy. As of 2021, the size of the influencer economy is over $104.2 billion and it is evolving each day with innovation.

Factors like widespread internet access, the emergence of social media platforms in massive numbers have democratized and became more inclusive to absorb tens and thousands of people as performers, musicians, singers, artists. Every man and woman with the ability to influence and communicate with individuals, groups, and communities that hang on around social media platforms are influencers.  

The state of the Global Influencer Economy in 2021

Influencer Marketing Hub conducted a worldwide study among 5000 marketing agencies, brands, and professionals of fashion, retail, technology, beauty, and other industries to assess the state of influencer marketing as of 2020 and has submitted its benchmark report for the year 2021 with the below-mentioned details;

 The year 2020 is significant for the expansion of the influencer economy.

• The pandemic-driven online shopping boom has led to the exponential growth of social commerce, raising the dollar spent on influencer marketing.
• The influencer economy will generate $13.2 billion in 2021. 
• Influencer marketing budgets in 2016 were a mere $1.7 billion, and it skyrocketed to reach $9.7 billion in 2020. It is expected to reach $13.2 billion by the end of 2021.
• There were only 190 influencer platforms or agencies, back in 2015, and their numbers increased to 1120 by 2019. While 340 new agencies were added in this category by 2020, 240 more have joined the list in 2021.
• Over 75% of companies globally have a dedicated budget for influencers and 90% of them consider influencers as effective in reaching their target group.
• While Instagram and Instagram stories are the most opted platform for influencers, TikTok is ahead of others in the race and it is the most preferred platform in the US, as 68% of the US companies are willing to spend on TikTok in 2021. 

The State of Influencer Economy in the US in 2021

The pandemic is a decisive force in spreading influencer marketing in the US in 2020. Though there was an initial lull in H1 2020 with 42.9% (YoY) spending on influencers, there was a quick revival by December 2020 with a 20% YoY increase in spending, as traditional ad production got hampered due to lockdown-related closures. Marketers had to rely on social commerce platforms and influencers due to the pandemic-precipitated shifts in the social media landscape. Several new social media trends, including social commerce, live streaming, TikTok short video, and social audio have accelerated the need for influencer marketing. 

Major changes that swept the Influencer Economy by 2020

• Brands have realized the importance of influencers/creators and have intensified influencer-centric activities.
• Brands have partnered with influencers, and it is the major stream of revenue for influencers than affiliate marketing and ads.
• All major social media platforms, including Facebook, YouTube, Instagram, Twitter, TikTok, Snapchat, and LinkedIn have rolled out tools and plans to attract influencers to their platform.
• Social commerce is instrumental in shaping and strengthening the current influencer economy.  
• Except for YouTube and Instagram several major social media platforms were not ready to pay influencers for a long time.
• Clubhouse and Tiktok have introduced tools that allow fans to pay directly to their favorite influencers/hosts on the platform for the first time, where Clubhouse did not cut from the influencer’s revenue. 
• Instagram (93%), Instagram Stories (83%), TikTok (68%), and Twitch (13%) are the most popular social commerce sites for influencer marketing in the US.
• 62% of marketers across the globe have increased their influencer marketing budgets in 2021.
• Influencer-generated paid content represented 20% of US agency/marketing digital ad budgets in 2021, followed by paid search (14%), display advertising (13%), and paid social and video(each at 12%). 

Platform Evolution and Monetization options For Influencers

From the earliest days of weblogging to self-published WordPress platforms, the influencer economy has expanded to reach the wider public that owns a Smartphone connected to the internet. Social media-groomed platform superstars have minted seven-digit income with content to appease their followers.

YouTube for example has demonstrated how the creators and influencers can make content on niche areas of the audiences’ interest with Casey Neistat, a YouTube video maker that enjoys over 8,000,000 subscribers, and millions of viewers for his videos. With over 13 million subscribers, Depop is a social app store that handled $650m merchandizing value and has earned revenues of $70m in 2020. Adidas social app store for creator club members, with its record profit of € 225 million, in 2020 is yet another example for the niche social app’s merchandizing abilities, adding value to the influencer Economy. 

Today, we have the following categories of influencers;

• Mega-influencers enjoy more than a million subscribers on social media with the ability to influence the mass audience with their charismatic background. They are helpful in brand awareness campaigns. 
• Macro-influencers are those with a follower base of 100,000 to 1 million that are used to promote brands in specific markets. 
• Micro-influencers with 1,000 to 100,000 followers are used to reach smaller groups with highly authentic and personalized messages like a friend or a family member.
• Nano-influencers are those who have fewer than 1,000 followers with immense ability to reach a specific community like a community of lactating mothers with valuable information.
• Subscriptions, memberships, tipping, Gifts, partnership with brands, and sponsorships, are some of the key monetization options for influencers.
• BuyMeACoffee offer: When followers pay for coffee, influencers/creators will get a commission to make their living and pursue their creative skills, without being bothered about sponsorships.
• Platforms like YouTube pay for the number of clicks and views.
• Twitch, a streamers’ platform with over 6 million active users allows them to view and pay tips for other streamer’s games on the platform. 
• TikTok allows influencers to earn money through organic product linking, sponsorships, and TikTok Creator Fund.
• Twitter introduced tipping in bitcoin, NFT, and a fund for creators/influencers.
• Retail partnerships to sell exclusive brands.

Emerging Trends of the Influencer Economy

• Marketers are looking at micro and nano influencers to reach the audience, a brand’s marketing needs are different and varied. 
• Affordability, availability of influencer’s time, and suitability of a particular influencer for a brand are the determining factors than the number of social media followers they hold. 
• Apart from enjoying a great social media following, the influencer must connect with them to influence them personally.
• Brands are keen on employing micro and nano influencers for their influencer marketing-related pilot studies.
• Brands trusting micro and nano influencers for their authenticity and efficiency in reaching niche communities. E.g, “Mommy bloggers”.
• There are influencers with seven-digit income from social commerce platforms and they are seeking the help of fund managers and wealth advisors to advise their future business plans.
• Companies like Advsr.ch have emerged with efficient financial technology solutions to support, service, and satisfy clients of the influencer economy.
• Mergers and acquisitions of firms and agencies in this field indicate how the industry is gearing up to measure metrics and ROI on influencer marketing.
• CreatorIQ for example acquired an influencer marketing analytics platform Tribe Dynamics to develop the largest influencer marketing SaaS platform in terms of revenue growth, data authority, and global expansion.
• Influencer forums like FYPM have emerged to facilitate influencers and creators to discuss issues and challenges prevailing in the industry, like influencer’s tariffs for working. FYPM is more of a Glassdoor kind of forum for influencers to report abuses and the best practices of the industry.

Future of the Influencer Economy 

Most of the influencers that enjoy enormous social media followings own their brands like JLo Beauty, Makeup line. The economy is expected to expand further when more influencers start building their line of business and produce content to promote them. Apart from brand sponsorships to promote other’s businesses, influencers are hosting TV shows, events, podcasts, and publishing web magazines. Influencers are also making money by posting videos on cooking, parenting, child-rearing, traveling, and on a wide variety of subjects. In the future, CEOs, founders, and corporate leaders may also join in great numbers to introduce their products and services as influencers, as we are already witnessing cases of Neil Patel and Gary Vaynerchuk.

Final Thoughts

Influencer’s economy is expanding steadfast with new initiatives and startups, making a beeline to take advantage of the evolving market opportunities. Unlike the advertising and the other creative industries, the influencer’s market is not standardized with measures, metrics, royalties, deals, and other intellectual property rights that enable influencers and creators to safeguard their interests.

The influencer market has already started taking initiatives to introduce analytics to measure the return on investment on influencers. Influencers have to plan their future business plans wisely to insulate from the market fluctuations and eventualities, as the influencer’s market is quite volatile and unpredictable. For more details on the Influencer Economy, read our blog on “What Influencer marketing is and How to develop your strategies?”

The post Exploring The Multiple Dimensions Of The Evolving Influencer Economy first appeared on Publir.

With these changes, digital media platforms have ushered in new faces as creators and influencers wield personal relations with their followers as friends, neighbors, mentors, and more. They are ordinary people like you and me and have built a fandom over the years with a niche audience that is eager to listen to them. Brands are equally eager to leverage their influencing abilities to promote their products or services in a variety of unforeseen ways.

Defining Influencer Marketing 

Influencer marketing is leveraging the potentiality of an individual to represent a product or service on behalf of the brand to motivate their followers to visit the product pages, read/follow reviews, recommend it to a friend or neighbor, or ultimately buy it. 

Influencer marketing works because the followers trust the influencer as an authentic source, their role model, or their favorite mentor. Some pet owners have even opened social media accounts for their dogs, cats, and hedgehogs, and amassed large followings as influencers. 

Influencers can have a lot of power over big brands. For example, Coca-Cola’s brand value dropped from $242 billion to $238 billion when the star football player Cristiano Ronaldo uttered the word ‘’Agua” (Water) in Portuguese, as against two bottles of 

Coca-Cola placed in front of him at the Euro 2020 press conference. This gesture showcases the role of influencers in promoting or denouncing a brand. Ronaldo enjoys 300 million followers on Instagram. Although it is not always possible for brands to rope in star players or celebrities to promote their brands, a mere mention for or against a product can make a big difference and influence their target audience.

The current social media landscape offers companies a wide range of influencers with micro and nano followers and depending upon the budget and the goal of the influencer marketing campaign, the brands can choose the best influencer of their choice from a platform, where it has a presence.

Factors That Made Influencer Marketing More Attractive 

Unlike mainstream media advertising that caters to a vast audience, with limited or no personal connection between the audience and celebrities shown in the advertisement, influencer marketing relies on the personal relationships of the influencers and their followers. Because influencers are individuals, they have taken the time to build their followers and have interacted with them to maintain an intimate relationship with those followers. 

Current-day influencers are mostly generation Z or millennial audience/users of social media who are also content creators and influencers. They create their own photoshoots using mobile phones and share pictures from their natural habitats, remixing them with popular filmy audio/video genres. There is no bound for user-generated creativity and platforms are equally proactive in supporting the users with tools that allow them to add bright background colors, music, sound effects, graphics, and AR/VR effects. The influencer-generated posts or the sponsored brand communication through the influencer connects well with the audience, as the followers are correlating their experiences with that of the influencer.

How to Develop Your Influencer Marketing Strategy 

Before actually setting in to create a strategy of your own, you need to follow a systematic approach.   

Set Your Campaign Goals 

Organizations vary in their type and size and your strategy should align with your immediate brand and marketing needs. While creating brand awareness is always an ongoing marketing strategy, you’ll want to establish a niched brand identity as a product for women, children, or Gen Z audiences–whoever you want to target with your product or service. 

Influencer marketing is suitable for brands with no social media presence or following. By leveraging the platform power, brands can strengthen their existence and build followers through influencers. The type of platform you go with is a decisive factor in selecting an influencer that represents your brand on social media. Apply research to figure out your ideal influencer’s data, keeping your campaign goals in mind, and how an influencer can achieve this. 

If you are a retail outlet selling multinational cloth outfits and accessories for Gen Z or millennial female audiences, you can connect with female influencers with a high to moderate following, depending on the budget at your disposal. An average influencer on Instagram with 10K followers charges $100 per post, but do your research to see what the fees are in your industry. Influencer profiles will also provide you information about influencers that fit into your budget limits.

Allocate Budget 

Brands and marketers are allocating influencer marketing budgets as part of their marketing strategy. We have reached a point where the financial resources are available to you to determine the type of influencer you are intended to engage. Most of the companies (59%) allocating a standalone budget for content marketing, and the majority of marketers (75%) are ready to dedicate a budget for influencer marketing in 2021. 

Get Into Influencer Campaigning 

Having set your budget, you can now decide on the type of influencer campaign that can promote your product better. It is up to you to decide the campaign type and the role of influencers in promoting it on social media. Based on your campaign goal and budget, you can make campaign-related decisions. 

GymShark, a UK-based athletic apparel brand, cites influencer marketing as one of the big reasons it was able to amass nearly 3 million Instagram followers. And, in a campaign to engage with influencers on TikTok fans, GymShark was able to get in front of 19.8 million fans and an incredible amount of engagement.

Select The Right Influencer 

Finding the right influencer is a crucial element in your influencer marketing strategy as some will connect with your audience more than others. McDonald’s, for example, has engaged a popular Korean Pop Bond BTS for its recent social media promotion on the BTS meal and garnered more than 600,000 likes on Twitter, 250,000 retweets and quote tweets, and countless follow-up tweets. Its TV commercial attracted more than 3.3 million liked video views on YouTube.

You might accordingly choose a suitable influencer by reviewing their social media portfolios for your campaign. There were over 240 influencer marketing agencies and influencer platforms in 2019 and they are handy in getting the required data for you. Collaborate with an influencer of your choice to write blogs for you, or have experts talk at your events. The route you choose depends entirely on your campaign goal and target audience. 

The Major League Baseball (MLB) for example, recently announced a contest on TikTok to find influencers. MLB will pay them for creating content around players, both on and off the field, and will pay per TikTok post.

What to Keep in Mind When Finding Influencers 

• Check whether or not the influencer is a representative of your target audience.
• Look at the number of followers the influencer has to ensure your campaign’s reach 
• Check for the type of content the influencer produces as your campaign’s effectiveness is based on what your influencer does. Do your influencer’s values align with your brand’s values?

Once you know what type of content you want to produce, the platform where you want it to appear, and the influencer who is a good match for your audience, you can either ask your influencer to prepare content for you or you can approach professional bodies to make content for your influencer marketing campaign. Now, you are all set to go. You still have few more things to keep in mind here.

Revise and Refine Your Campaign Strategies

Like any marketing campaign, it’s important to watch the results and make changes as necessary so you get the best ROI possible. And, like any marketing effort, you can’t just set the content and forget about it. There’s work that you need to do on your end too!

• Keep measuring your campaign reach and effectiveness using relevant metrics and tools and revise it accordingly at the stipulated date and time. 
• Create a specific hashtag for your campaign, like #BTSmeal for the McDonald’s campaign.
• Keep an eye on what your influencer is doing for you by tracking the hashtagged posts on the internet.
• Build strong communities. Social media communities go a long way in promoting your goals. 
• Socialize with your platform followers by responding to their questions and comments.
• Look for industry reviews about your specific hashtags.
• Try to build a relationship with the influencer through interactions by engaging them on a specific event or occasion.
• Do not intervene in influencer’s content if they are making it for you, as they are the best judges of their followers’ preferences. 
• Do react on social media to other/competitor’s campaigns to get reciprocate positive reaction.
• You can assess the revenue generated through influencer marketing by issuing affiliate codes or tracking links.
• Tag all your campaign-related posts and compare how these posts are performing.
• Document the way the strategies have worked for your niche when it comes to working with influencers. 
• Publish and elicit audience response.

Conclusion  

Influencer marketing has emerged as one of the most effective ways of creating brand awareness and converting the same as profitable returns on your investment. A well-designed influencer marketing strategy will produce favorable results for your brand if it is implemented as per the plan. But be patient to reap the benefits, as influencer marketing is based on building trust, loyalty, and relationship with followers. This will take some time even for an established influencer to convince their followers. To find out more about the role of Social Media influencers, read this blog now!

The post What Is Influencer Marketing and How to Develop your Strategy first appeared on Publir.