In recent years, social media has taken the world by storm with marketing tactics. Covid-19 forced many businesses to digitize their businesses to stay afloat. Many people found new ways to socially interact with one another during lockdown. Instead of businesses seeing the threat of COVID, they found opportunities to find new creative ways to counter the effects of the pandemic lockdown. This goes for selling goods and services on TikTok to the product testers on YouTube.
The new venture in influencer marketing has opened up many tables of discussion about why it is so successful. Think of Covid as the catalyst and influencer marketing as a new experiment for digital marketers that has been proven successful. COVID was what sped up the process of digitization and increased social media usage for potential clients.
In this blog, we will look at all the facts, stats, and opinions of why influencer marketing is so successful and how it works.
Types of influencers
Before I give you what I promised…
We need to understand the difference between types of influencers before we can look at the stats. Influencers are divided into 3 categories:
Macro influencers
A tier below typical superstars and mega-influencers are macro influencers. They have a sizable online following, ranging from 100,000 to 1 million people. Typically, they lack a niche. These influencers generally follow trends and cover a wide range of topics and discussions that may interest their wide range of audience.
Micro influencers
Micro influencers are used by more than half of marketers who use influencer marketing. Between 1,000 and 100,000 people follow a micro influencer. Because their writing frequently focuses on a certain subject, interest, or market, people see them as authorities in their industry. They will be able to help organizations attain a certain client persona through marketing activities.
Nano influencers
Although they have the smallest audience of the three, nano influencers frequently generate the greatest interaction. These influencers work in a specialized community and have less than 1,000 followers. They have established a vibrant, devoted community that is receptive to recommendations.
Nano influencers frequently collaborate for little to no cost. They may get free products in exchange for reviews or social media endorsements. They are mostly independent contractors who get something for free in exchange for sharing their experiences.
The influencer marketer businesses want
So, you have your customer persona. You know what your ideal customer looks like, wants, and needs and you want them to be your loyal customer. The influencer that has the most information about them is the Micro influencer. This is because they need their audience to remain satisfied with their content to keep the niche they are entertaining or educating. Businesses can learn more about their customers by engaging, collaborating, and hiring these influencers to better reach their customers. Believe it or not, the customer will be a loyal one because they are loyal to that influencer!
You can tell a lot about what the customer wants by looking at who they follow and when they engage with the influencer’s content. The Macro influencers on the other hand are not the ideal choice as they capture a wider audience and not a niche. This means that they are perfect for awareness increase and businesses that do not have a specific target audience.
Nano influencers have a very small following and most of the following will be friends and family. Using nano influencers is ideal when your budget is small and you desire to increase reviews, word of mouth, and a small conversion.
What your goals are will determine the type of influencer you use.
- Macro = awareness
- Micro = Conversion rates and loyalty
- Nano = Word of mouth or reviews
All three are important. Just look at your goal before you decide what to use.
Influencer Marketing Now
On one hand, we see the effectiveness of social media being unpredictable and grayer than just black and white. On the other hand, we have social media as a huge opportunity for businesses to reach a wider audience in a shorter period. Both hands can be justified as to why they are correct, but we are not looking at an arm wrestling match. Instead, we will be trying to find the middle ground of why influencer marketing is a good option for businesses. For both the B2B and B2C types.
Here are some facts to consider: (Pulled from The Influencer Marketing Hub)
- The influencer marketing market is expected to reach $21.1 billion in 2023.
- 2/3 of these brands aim to utilize AI to identify influencers, and 63% plan to use AI to execute their influencer marketing. This means that the introduction of new technology has influenced brands to optimize their marketing efforts.
- Over 2023, 67% of respondents who budget for influencer marketing said they plan to raise that budget.
- In comparison to costly macro-influencers (19%) and famous people (12%), dealing with little (nano – 39% and micro – 30%) influencers is strongly preferred.
- Nowadays, paying influencers (42%), as opposed to simply providing them with free goods (30%), is the norm
- For the first time, TikTok (used by 56% of firms employing influencer marketing) has surpassed Instagram (used by 51% of brands) as the most popular medium for influencer marketing, easily surpassing Facebook (42%), YouTube (38%), and Facebook (42%).
Influencer Marketing Hub released a report based on 3,500 people who were selected from a wide range of different backgrounds. In this report, they found that in 2021, there was a relative growth in B2B businesses. This year the percentage has remained relatively constant. 38% of individuals polled operate B2B campaigns, while the remaining 62% identify as working in the B2C sector.
The report also has been able to identify the most effective influencer categories on social media.
- Fashion & Beauty is still the most favored vertical, with 25% of responses, but that number has increased significantly from 15% from the previous year.
- Travel & Lifestyle came in second with 12.9% of the market
- Gaming came in third with 12.5%.
- Sports enjoyed a 12% increase in popularity from the previous year.
- In 2023, there will be a rise in the representation of Family, Parenting, and home (10.7%).
- Health and Fitness saw the worst decline (6.8%).
- Every other vertical imaginable is covered by the remaining 19%, categorized as Other (and comprising half of the equivalent 2022 percentage).
OK, so you know the stats…so what?
Well… influencer marketing has been incredibly successful for any business type. With new tools like AI and automation, businesses are adapting their processes toward a customer-centric approach. The customer is what is the center of all decision-making. This has opened up new opportunities to better believe results to customers based on customized interests, advertisements, and remarketing.
With new technology introduced, it has sparked a new age of business ethics.
Don’t believe me?
Well, think of how many businesses are making use of AI with social media algorithms.
How social media algorithms work
No two people will have the same social media news feed since social media sites build individual algorithms for each user. It is credibly successful at keeping the user’s interests at the forefront of their social media. Social media platforms’ algorithms look at user behavior to determine which material users are most likely to engage with and desire to see. The intent isn’t to “steal the privacy rights of the user” but instead to give the user what they want, when they want it, and in what context they want it.
Advertisements on social media tend to do the opposite which is probably why we hate ads! Influencer marketing, however, uses the user experience as a way to give them what they want, when they want it, and with whom they want it. It builds a perfect marketing campaign that already establishes a foundation that the influencers control in their community.
Sprout Social states that even though social media algorithms are in fact unique to each user, it doesn’t mean it is impossible to understand it. They state that the biggest challenge isn’t understanding the algorithms but instead adapting to them as its dynamic and never at a standstill. The main reason for this is that users are not simple. People are complicated! Their interests change and their lifestyles and desires change.
For marketers to adapt to the changes, they need to adapt their processes to remain cost-efficient. Influencer marketing is one of the biggest breakthroughs because they study the algorithm and adjust content and video editing based on their findings. Businesses can take advantage of this by using their skills to advertise their brand and increase awareness.
Seen as influencers have a built community that is engaging, trust with the influencers gets transported directly to the brand.
You know what that means?
Better conversions!
Influencers have the power to build brands with their skills and knowledge. Businesses should take advantage of this by working with them to increase conversion rates and better their ROI.