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Influencer marketing (a.k.a. influence marketing) is a form of social media marketing involving endorsements and product placement from influencers, people and organizations who have a purported expert level of knowledge or social influence in their field. Influencer content may be framed as testimonial advertising; influencers play the role of a potential buyer, or may be involved as third parties. These third parties can be seen in the supply chain (such as retailers or manufacturers) or as value-added influencers, such as journalists, academics, industry analysts, and professional advisers.
Most discussions of social influence focus on social persuasion and compliance. In the context of influencer marketing, influence is less about arguing for a point of view or product than about loose interactions between parties in a community (often with the aim of encouraging purchasing or behaviour). Although influence is often equated with advocacy, it may also be negative. The two-step flow of communication model was introduced in The People's Choice (Paul Lazarsfeld, Bernard Berelson, and Hazel Gaudet's 1940 study of voters' decision-making processes), and developed in Personal Influence (Lazarsfeld, Elihu Katz 1955) and The Effects of Mass Communication (Joseph Klapper, 1960).
There is a lack of consensus about what an influencer is. One writer defines them as "a range of third parties who exercise influence over the organization and its potential customers." Another defines an influencer as a "third party who significantly shapes the customer's purchasing decision but may never be accountable for it." According to another, influencers are "well-connected, create an impact, have active minds, and are trendsetters". And just because an individual has a large number of follows does not necessarily mean they have a large number of influence over those individuals, only that they have a large number of followers.
Sources of influencers vary. Marketers target easily-identifiable influencers, such as journalists, industry analysts, and high-profile executives. For most business-to-consumer (B2C) purchases, influencers may include people known to the purchaser and the retail staff. In high-value business-to-business (B2B) transactions, influencers may be diverse and might include consultants, government-backed regulators, financiers, and user communities.
Forrester Research analyst Michael Speyer notes that for small and medium-sized businesses, "IT sales are influenced by several parties, including peers, consultants, bloggers, and technology resellers." According to Speyer, "Vendors need to identify and characterize influencers inside their market. This requires a comprehensive influencer identification program and the establishment of criteria for ranking influencer impact on the decision process."[This quote needs a citation] Influencers can play a variety of roles at different times in a decision-making process, an idea developed by Brown and Hayes.
Market-research techniques can be used to identify influencers, using predefined criteria to determine the extent and type of influence. Activists get involved with organizations such as their communities, political movements, and charities. Connected influencers have large social networks. Authoritative influencers are trusted by others. Active minds have a diverse range of interests. Trendsetters are the early adopters (or leavers) of markets. According to Malcolm Gladwell, "The success of any kind of social epidemic is heavily dependent on the involvement of people with a particular and rare set of social gifts". He has identified three types of influencers who are responsible for the "generation, communication and adoption" of messages:
- Connectors network with a variety of people, have a wide reach, and are essential to word-of-mouth communication.
- Mavens use information, share it with others, and are insightful about trends.
- Salesmen are "charismatic persuaders".[This quote needs a citation] Their influence is the tendency of others to imitate their behavior.
Most current information about influencers focuses on consumer, rather than business-to-business, markets. Word-of-mouth communication is prevalent in a consumer environment. In business marketing, influencers affect a sale but are typically eliminated from the purchase decision. Consultants, analysts, journalists, academics, regulators, and standards bodies are examples of business influencers.
Influencers may be further categorized by the number of followers they have on social media. They include outside celebrities with large followings and internet celebrities on social-media platforms such as YouTube, Instagram, Facebook, and Twitter. Their followers range in number from hundreds of millions to 1,000. Influencers may be categorized in tiers (mega-, macro-, micro-, and nano-influencers), based on their number of followers.
Businesses pursue people who aim to lessen their consumption of advertisements, and are willing to pay their influencers more. Targeting influencers is seen as increasing marketing's reach, counteracting a growing tendency by prospective customers to ignore marketing.
Most influencers are paid before the start of a marketing campaign, and others are paid after it ends. Consensus exists about how much an influencer should be paid. Compensation may vary by how many people an influencer can reach, the extent to which they will endorse the product (a deliverable), and the success of their past endorsements have performed. Top-tier influencers and celebrities may receive a six- or seven-figure fee for a single social-media post. In addition to (or in lieu of) a fee, payment may include free products or services. For influencers with smaller followings, free products or services may be the only form of compensation.
Online activity can play a central role in offline decision-making, allowing consumers to research products. Social media have created new opportunities for marketers to expand their strategy beyond traditional mass-media channels. Many use influencers to increase the reach of their marketing messages. Online influencers who curate personal brands have become marketing assets because of their relationship with their followers. Social-media influencers establish themselves as opinion-leaders with their followers and may have persuasive strengths such as attractiveness, likeability, niche expertise, and perceived good taste. The interactive and personal nature of social media allows parasocial relationships to form between influencers and their followers, which impacts purchase behavior. Influencer marketing on social media reaches consumers who use ad-blockers.
Critics of an online-intensive approach say that by researching exclusively online, consumers can overlook input from other influential individuals. Early-2000s research suggested that 80 to 92 percent of influential consumer exchanges occurred face-to-face with word-of-mouth (WOM), compared to seven to 10 percent in an online environment. Scholars and marketers distinguish WOM from electronic word-of-mouth (eWOM).
YouTuber PewDiePie's antisemitic and racist comments led to cancelled deals with the Walt Disney Company and a widespread backlash. Celebrity influencer Kendall Jenner and other media personalities failed to disclose their paid endorsements of the fraudulent Fyre Festival, as required by the Federal Trade Commission. YouTuber Logan Paul posted a video containing a dead body in Japan's Suicide Forest, sparking a backlash and accusations of insensitivity.
Some marketers use influencer marketing to establish credibility in a market; others use it to create social conversations about their brand, and still others focus on driving online or in-store sales. Marketers leverage credibility gained over time to promote a variety of products or services. They measure their success in several ways, including earned media value, impressions, and cost per action.
In the United States, the Federal Trade Commission (FTC) treats influencer marketing as a form of paid endorsement. It is governed by the rules for native advertising, which include compliance with established truth-in-advertising standards and disclosure by endorsers (influencers). In 2017, the FTC sent more than 90 letters to influencers (celebrities and athletes) reminding them of their obligation to disclose sponsored posts with the hashtag #ad. As a result of the FTC's action, Instagram added a feature in 2017 allowing influencers to indicate a "paid partnership" at the top of a post.
Media-regulating bodies in other countries (such as Australia), followed the FTC in creating influencer-marketing guidelines. In 2019, the United Kingdom announced a voluntary agreement between the country's Competition and Markets Authority and high-profile social-media influencers to ensure compliance with consumer law.
Fake influencers have been around for as long as their genuine counterparts, and all criteria used to determine the veracity of an influencer account can be fabricated. Third-party sites and apps sell services to individual accounts which include falsely increasing followers, likes, and comments. Instagram has failed to shut down all such websites. One marketing agency tested whether fake accounts could be profitable. The company created two fictitious accounts, built their online presence through paid followers and engagement (likes and comments), and applied for work in marketing campaigns on popular influencer-marketing platforms. They published their results, an explanation of how the false accounts were created, and which brands had sponsored them.
An analysis of over 7,000 influencers in the UK indicated that about half of their followers have up to 20,000 "low-quality" followers themselves, consisting of internet bots and other suspicious accounts. Over four in 10 engagements with this group of influencers are considered "non-authentic." A study of UK influencers which looked at almost 700,000 posts from the first half of 2018 found that 12 percent of UK influencers had bought fake followers. Twenty-four percent of influencers were found to have abnormal growth patterns in another study, indicating that they had manipulated their likes or followers.
Influencer fraud (including fake followers) was estimated to cost businesses up to $1.3 billion, about 15 percent of global-influencer-marketing spending. Research in 2019 accounted only for the calculable cost of fake followers.
Virtual influencers are also sometimes considered fake. However, virtual-influencer profiles do not correspond to real individuals and are not automated bots which generate fake likes, comments, or followers. They are virtual characters, intentionally designed by 3D artists to look like real people in real situations. Although most of the characters can be easily identified as computer graphics, some are very realistic and can fool users. The characters are usually identified as models, singers, or other celebrities. Their creators write their biographies, conduct interviews on their behalf, and act like the characters themselves. Lil Miquela was a realistic virtual influencer which prompted curiosity and speculation until it was learned that she was created by advertisers.
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