Companies have used celebrities to sell their products and services for a long time. In the beginning this was limited to traditional media, but alongside the development of social media such as Facebook, Instagram and YouTube, established celebrities have received even more lustre. Today, artists like Selena Gomez and Justin Bieber and soccer players Christiano Ronaldo and Zlatan have millions of followers in social media, which increases their market value dramatically.
However, another market has grown in the wake of the big stars, which in many aspects is more interesting for companies that want to reach out to their public. It contains of profiles that have built their personal brands and large followings around their interests, without having become famous in other contexts. Have you ever heard of the Swedish fitness profile Anna Nyström for example? She has over 7.9 million followers on Instagram. Compare that to the New York Times with 6.3 million followers and we get a glimpse into the future. How can a non-celebrity have more followers than one of the world’s largest newspapers?
The main actors in these environments have been termed influencers; people who have many followers and who succeed in inspiring and having a large influence on certain target groups. This trend, where individuals obtain ever more influence over us as customers, customers or citizens, is growing increasingly stronger, and companies are not slow to jump on the bandwagon. More and more companies are moving their marketing money from traditional media to work with individual influencers. What once began as a hobby for private people has grown today into a billion-crown industry. This phenomenon – selling and marketing products and services with the help of individuals that have large influence on potential customer’s purchasing decisions – is usually called influencer marketing.
In 2017, companies spent over 900 million US dollars globally on letting influencers market their products – on Instagram alone. And this number is expected to grow considerably in coming years.1 At the same time, the news agency Bloomberg reports that companies are spending about 230 million US dollars on influencers – every month.2 According to the IRM Institute for Advertising and Media Statistics, influencer marketing generated 50 million US dollars in Sweden in 2016, which is a substantial increase from the year before.
I think that influencer marketing is going to have an incredible global era for the next decade, and we’re just at the beginning of it. | Gary Vaynerchuk, American entrepreneur and writer
This trend holds not only for investments in large Instagram stars. While the really big influencers have an enormous range and can reach hundreds of thousands of followers, many companies are also opting to work with smaller influences. Those have closer and more authentic relationships to their followers, that have a clearly defined target group, and that are strongly tied to a specific industry or a given area. Therefore, there is a growing market for “micro-influencers” – people who normally have between 1,000 and 100,000 followers on social media. They can be bloggers, YouTubers, academics, industry analysts, researchers, experts, lecturers or other people who have established their brand in a given category. For example, the credit card company American Express collaborated with the new influential bloggers Grace Bonney and Emily Henderson to reach out to small companies with their campaign “Love My Store.”
The purpose is for the company to borrow some of the influencer’s brand and add it to their own. The influencer then becomes an underwriter and a role model that strengthens the brand for the purpose of creating a clear return on investment.
The software company SAP is another example. They have successfully collaborated with business consultants, academics, industry experts and writers that have a large influence on decision makers in their target group. These influencers help them to market their services.3 Every year they organize the conference Sapphire in Orlando, which gathers about 20,000 participants. They interview eleven different influencers and publish the interview in social media. In this way, they reach an estimated 80,000 people in their target group. In many cases one can even use someone from one’s own personnel and their influence in social media. This is something that IBM did successfully when for a period of time they let 1,000 of their most knowledgeable employees share six posts per day on Twitter, LinkedIn and Facebook.4
The driving force behind the growth of influencers and influencer marketing can be explained by the fact that more and more people use social media. The consumption of traditional media is decreasing, and the Internet has pulled out in front as the primary source of information and inspiration. The Mayority of Swedish youth also use advertising blockers to filter away advertising messages online.5 This leaves social media as the only remaining channel. For youth between 16 and 25 years old, Facebook is, for example, a more important source for news than the radio, TV and newspaper.6 According to the marketing platform MuseFind, 92 percent of customers trust an influencer more than a traditional advertisement or an ad using a celebrity.7
For a sales or marketing manager, influencer marketing can be a useful marketing channel for reaching out to a target group. Today there are multiple platforms, such as Boostified and BuzzSumo, that offer services for those who want help identifying influencers that can contribute to building their brand. But one must think it through before choosing to collaborate with a given person or organization. The challenge is to find influencers that really are interested in your product or service, that understand your target group, and that use the right channels.