Influencer marketing began as a niche marketing tactic to target younger demographics on social media platforms. Today, it’s projected to become a $21B market, with more brands running influencer partnerships to reach a wide array of audiences.Â
This white paper provides insights into why influencer marketing is growing so quickly, along with actionable strategies to overcome the challenges brands face with social media platforms. The challenges that come with algorithmic changes, data transparency, and rising advertising costs can be avoided by running influencer campaigns on the Open Web, or “Premium Web.”
Key questions answered in this report:
Why is influencer marketing growing so quickly?
What types of brands are investing in influencer marketing?
What challenges do social media platforms present as the industry grows?
How can brands evolve beyond social media to realize higher returns?
Why is influencer marketing growing so quickly?
The numbers tell a clear story - spend on influencers is increasing, and is expected to continue increasing based on the results brands are seeing.
We see five key reasons that influencer marketing is growing so quickly:
Trust in authentic content - Consumers, particularly younger generations, have grown skeptical of traditional advertising. According to a survey by Influencer Marketing Hub, 49% of consumers are swayed by influencers when making a purchase decision, and 63% are likely to purchase a product from an influencer they trust.
Increased social media usage - With people spending more time on platforms like Instagram, TikTok, and YouTube, influencers have emerged to grow large audiences. This increased exposure has made influencer partnerships even more valuable for brands looking to reach target consumers.
The rise of short-form video - Short-form video has become the most prevalent content form on many social platforms, which is ideally suited to influencers being able to show off products, show how they are used, and give persuasive first-hand accounts of how they use a product.
The convergence of education and entertainment - Influencers have created a unique look for an age-old idea: audiences respond best when learning is packaged as being personal and entertaining, which helps introduce new products or new product categories.
Importance of social proof - Influencers on social media serve as powerful sources of social proof, as endorsements and recommendations can sway their followers’ opinions and purchase decisions.
What types of brands are investing in influencer marketing?
Influencers’ ability to connect and build relationships with their audience makes them highly attractive to both niche and larger brands.
Notable examples of brand-influencer partnerships include:
Google, Universal, Bud Light, and Bumble work with The Influencer Marketing Factory to run successful TikTok influencer campaigns.
Walmart partnered with Viral Nation to launch Walmart Land in the Roblox metaverse, involving celebrity, macro, and mid-tier influencers in gaming and lifestyle niches.
Mucinex created the #BeatTheZombieFunk dance challenge on TikTok, collaborating with influencers like Stephen "tWitch" Boss and Allison Holker to promote their Nightshift product.
Why Influencer Marketing is Evolving Outside of Social Platforms
What challenges do the social media platforms present as the industry grows?
Running influencer campaigns within closed social platforms presents unique challenges for brands.Â
Restricted Data and Tools - Social platforms restrict access to data and limit how external tools can interact with their environment. Facebook, Instagram, and TikTok are prime examples, as they control user data tightly and enforce specific rules for how brands and influencers can operate.
Limited Data Access and Transparency - Brands often struggle with limited access to comprehensive data, making it hard to measure campaign effectiveness accurately. Social platforms restrict third-party tracking, leaving brands to rely on the metrics provided by the platforms themselves, which may not always be transparent. Past debacles with Facebook and X are just a few of the examples. This lack of transparency can lead to difficulties in optimizing campaigns and assessing ROI.
Algorithm Changes and Platform Dependency - Frequent changes to platform algorithms can significantly impact the visibility and reach of influencer content. Brands and influencers must constantly adapt to these changes to maintain engagement levels. Additionally, heavy reliance on a single platform makes brands vulnerable to shifts in that platform's policies or popularity, posing a significant risk. Â
High Competition and Ad Costs - The popularity of influencer marketing has led to increased competition, driving up ad costs as much as 21% YoY. As more brands vie for influencer partnerships and ad space, the cost of running effective campaigns increases. This competition can make it difficult for smaller brands to compete with larger, more established companies with bigger budgets.
How can brands evolve beyond social media to realize higher returns?
While influencer marketing was born on social media, it’s rapidly evolving into new channels. Brands are taking their influencer partnerships to run outside the “walled gardens,” tapping into publisher sites on the Open Web, streaming TV, and out-of-home screens.
Seven reasons to expand influencer campaigns beyond social media platforms:
Higher return on investment - The hardest, and most costly, part of influencer relationships is the upfront work to identify the right partner and create the content. Once the content is created on social media platforms, it can automatically be exported to other platforms
Using social as a testing ground - Creating content for social delivers rich metrics on audience preferences and engagement. Once brands determine the content that resonates with audiences and performs best, they can take that content to new channels.
Reach new audiences - Other platforms enable brands to reach new audiences with granular targeting to ensure the highest efficiency on their influencer campaigns.
Gain higher fidelity metrics and visibility - Social platforms tightly control user data and restrict third-party tracking, making it difficult for brands to comprehensively measure campaign effectiveness and ROI. Brands often have to rely on the metrics provided by the platforms themselves, which may not always be fully transparent.
More control over distribution - With social media, frequent changes to platform algorithms can significantly impact the visibility and reach of influencer content. Brands and influencers must constantly adapt to these changes to maintain engagement levels. Heavy reliance on a single platform also makes brands vulnerable to shifts in that platform's policies or popularity.
Avoid high competition and rising ad costs - The growing popularity of influencer marketing has led to increased competition on social media platforms, driving up advertising costs. As more brands vie for influencer partnerships and ad space, the cost of running effective campaigns is increasing, making it challenging for smaller brands to compete with larger, established companies, with bigger budgets.
Balance social media and the Open Web to get the most from influencer marketingÂ
Social media platforms will always have an important role to play with influencer marketing. Influencers have built substantial followings on Instagram, TikTok, and other platforms. This built-in distribution allows brands to connect organically with their audience, even though reaching that audience is increasingly mediated by the algorithms of each platform.
At the same time, brands are turning to the Open Web as a way to extend these influencer campaigns beyond what social platforms can offer, giving themselves a cost effective way to ensure the content they’ve created with influencers gets to the right audiences.
