If you're looking for growth in the marketing industry, look no further than influencer marketing.
The global advertising business will see a slight slowdown in 2017, according to Magna. The industry will only grow by 3.7% with total advertising revenue expected to reach $511 billion. That's over half a trillion dollars. The slowdown could be related to a lack of "big events" like a major political campaign or the Olympics (which usually pushes incremental ad spend). We're also seeing something else happen: the chairs on the deck are being shuffled around. Ad spend is bleeding from traditional media channels and being reallocated to digital. Digital budgets will see double-digit growth and will become the top media category this year, over-taking television advertising sales for the first time ever. Every other media category will not feel this kind of wind in their sails.
This is a big deal, but it does not tell the story...
It's not just money going from tv ads and newspapers over to Google and Facebook. Influencer marketing has shifted from the new and shiny bright object to becoming the fastest growing channel in digital marketing today. TL;DR: brands love paying influencers hefty fees to get them to shill their wares. For every advancement that we're seeing in the marketing technology world (think marketing automation, programmatic, artificial intelligence, self-serve tools, etc...), there's a hot new startup replicating these platforms specifically for influencer marketing. There are multiple and big agencies who have one sole focus: connect brands to influencers. And, of course, influencers are loving it. In the past short while, we've seen companies like Google, Twitter and Adobe make acquisitions of businesses in the influencer marketing space. It still seems to be heating up, with no signs of slowing down. Even Amazon has been (somewhat) quietly renaming their affiliate marketing program as an influencer marketing platform (and targeting some of the influencers with larger followings to create more traction and opportunities).
If everything is so exciting in influencer marketing, why is there a pending bubble to burst?
Influencers build significant audiences. It's not just a consumer watching a piece of media. Fans of influencers are (usually) "all in." They're attracted to these influencers for a myriad of reasons (the influencer's knowledge, likeablity, how the influencer is a part of the community rather than someone pushing content down to an audience, etc...). Influencer marketing is working, because the relationship between the content creator and the fans is built on trust, and how close the influencer gets to the audience. This makes things (somewhat) tenuous for brands. The brand is not just running a pre-roll ad before the content. For a true influencer marketing campaign to work, the influencer has to really believe in the brand and be able to create content that is reflective of both the brand's needs and the audience's receptiveness to this content. Brands need to tread carefully here, but the influencer is really the one who has to be the most careful. Any mis-step, any sign of shilling without belief in the product/service, and it could cost them audience, growth and long-term staying power. You would think that this would make influencer marketing one of the most powerful forms of marketing and endorsement.
Yes... and no.
It's not that money corrupts. It is that money can skew things. Influencers can be quite convincing. Influencers can be quite manipulative. Even with full transparency that the content is sponsored (an ad), money can sway influencers. This is especially true in more mature influencer marketing categories like beauty and fashion. Becoming a beauty and fashion influencer these days, is like the new mommy bloggers of a few years back. It's all the rage, and brands all want the hottest, biggest and brightest rising stars of Snapchat, Instagram, YouTube, etc... to shill their latest products. Influencers of the day are like celebrity endorsements of yesterday-year.
What happened this week is a glimpse of what's happening (and what's to come) in influencer marketing.
Two weeks ago a hand-picked group of beauty influencers were given a new brand - Evaus - to try out. These paid influencers were then brought into a studio to uncover their honest and true thoughts about this new beauty brand. "It's a game changer," said one influencer on camera, "It's edgy. It's modern. It's sleek," said another. Nobody realized that Evaus was really Suave spelled backwards. This "gotcha" campaign was actually an agency stunt in conjunction Unilever (owners of Suave) to demonstrate that more expensive beauty products are more trustworthy, but that lowered-price hair products don't always sacrifice quality. The influencers went along and agreed to still be a part of this campaign once the reveal was made, but it does prove an interesting point: This isn't about a smart ruse on influencers. The influencers often don't dig deep or have the depth of knowledge to understand the full scope of what they're saying "yes" too, and many influencers might inflate how they feel about a brand to ensure that they're invited back (or paid) for other interesting opportunities. This isn't all influencers, but as the playing field intensifies, values, morals and quality tends to wane. Suave (and their agency) proved it... and it's only going to get worse (for more on this Suave campaign read: AdAge: Unilever Turns Tables on Influencers With 'New' Hair Care Brand).... And yes, after watching the video below, there's a whole whack load of additional conversation around brand perception, positioning and what the beauty industry does to a consumer's mind (even the professional influencers).
What this means for influencer marketing...
With so many influencers (and many more coming online daily), brands will have more and more options for where their growing ad spend can be placed. When this happens in any marketing marketplace, the quality of the content tends to drop and the pricing model tends to drop too. Brands are no longer spending big bucks to get one or two influencers to tweet about their product. Things have progressed quickly in this space. Competition drasticaly changes the marketplace. For brands, there are countless more places to get that kind of bang for their buck. The ad dollars are being spread out among several influencers, across multiple social media platforms, and for a much longer period of time. For influencers, they're now being connected to multiple brands. Influencers are getting signed by agents and managers. Influencers are trolling automated marketplaces for revenue opportunities, and spending a good portion of their time developing influencer marketing content (or ads) instead of focusing on the content that built their audience in the first place. For the audience, they're seeing more and more advertising and marketing in their content (whether they like it or not). For the marketing industry at large, we're seeing more and more dollars stream into an industry, because these influencers have eyeballs - and this is always where the money follows.
If everyone can't piece this together and see the bubble, we're simply not paying attention.