I have seen the ROI from influencer marketing, and by reading The Age of Influence you will too. Sometimes, however, seeing the stats is believing, and this is truly the case with influencer marketing statistics. Case studies is another area where I plan to blog more about, but let’s first see the different statistics that showcase the value behind influencer marketing.
While influencer marketing seems like it’s a brand new phenomenon, we need to remember that we’ve already seen previous iterations of it before. Chief among these is the celebrity endorsement, where very famous people are paid to endorse a product. This technique can include television ads, a large number of glossy advertisements in magazines, or huge billboards on the side of the highway. It even uses product placements in movies starred by A-listers.
There’s no question that celebrities are influencers. And yet, what we mean by influencer marketing is something different. In short, “influencer marketing” involves the use of more ordinary people to market products, people that we often refer to as social media influencers.
These ordinary people include YouTube and Instagram personalities, foodies, global backpacker travelers, fitness pros, and ordinary housewives who use everyday products and review them, often in the form of sponsored reviews. In short, anybody with a medium to large following on social media has the potential to market products using this technique, and the definition of how large that following needs to be continues to go down over time, with micro influencers and even nano influencers becoming more and more popular.
Now that we understand what is included what I refer to as “influencer marketing,” let’s discuss the recent statistics so that you can make smarter decisions for your influencer marketing strategy.
Influencer marketing is growing
Like so many new technologies or techniques, the influencer marketing trend has grown rapidly as more and more businesses embrace its use. Along with the wider adoption of this technique, budgets are increasing. Here’s how it breaks down statistically:
In 2019, 65% of marketers planned on increasing their influencer marketing budget, compared to 39% in 2018.
From this, we can see two things: marketers are seeing the value of influencer marketing, and they are getting more confident in its use. Even with money lost on fraudulent influencers, which I will discuss further below, there’s a lot of benefit in this modality.
An industry benchmark report showed that:
Almost half of respondents will spend 20% or more of their budget on this type of marketing next year.
For such a new area of marketing, this is a pretty incredible amount of money. Of course they aren’t putting all their eggs in one basket by any means, but this percentage shows confidence. After all, it’s a lot of money to spend on something if it doesn’t work out.
This same survey shows us:
77% of respondents said that they run influencer campaigns with their own employees, instead of using an agency.
I think that one reason for this might be the worry that middlemen are more likely to fall for fraudulent influencers. That’s especially relevant because agencies may have a reputation to protect, but they make their money after placements are made. The good ones will protect their reputation, but corrupt agencies can easily be used as a tool to help the fraudsters. As always, buyer beware.
Lastly, Oberlo reports that at the end of 2019,
Only 7% of survey respondents said they’ve never used influencer marketing.
On the other side of the coin, this means that 93% of marketers are using this technique. So, we can see that whether marketers use a lot of influencers or not, they are at least giving the technique a try. Depending on the industry (and your marketing goals), influencer marketing is on course to be one of the biggest innovations in recent marketing history.
In fact, it is quickly becoming a must-have line item on marketing budgets regardless of industry.
Influencer marketing is becoming a major market segment
No matter what kind of business you’re promoting, there’s always the opportunity to try and “edge out the competition.” After all, there are a lot of people who can take your potential customer’s money if you don’t. Perhaps the biggest advantage of using influencers is that you have the opportunity to choose people who are part of your target market, or who appeal to your target market. For example, if you’re trying to sell construction materials, having an influencer who is a general contractor might be advantageous. Selling beauty products aimed at the younger market? Pick an influencer who is the same age. Is your client a home improvement company? Testimonials from influential local homeowners might be a good choice.
The usefulness of this method of marketing is a good reason why:
Globally, marketers expect to spend about 2.5 Billion dollars on influencer marketing in 2020.
That’s a lot of money, though not nearly as much as for other forms of marketing. After all, this type of influencer marketing is much newer than its older celebrity-endorsement relative.
If you want a recent snapshot of spending, consider this:
In Q2 of 2019, marketers spent $442 million on influencer marketing.
This isn’t exactly chump change, but then again, it’s a versatile marketing modality. We like the fact that it’s an effective way for emerging brands to get some inexpensive publicity.
Influencer marketing has a high ROI
Admittedly, measuring ROI for influencer marketing is a bit more difficult than some other methods. After all, it’s sometimes challenging to know when a purchase is linked specifically to a particular influencer campaign. Some ways of doing this include placing links within the influencer-produced or promoted content, influencer-specific discount codes (often used together with affiliate marketing), customer surveys, and tracking customer engagement with the content.
Now that we’ve discussed the “how,” here’s the “what:”
In one study, influencer marketing achieved 11x the ROI than banner ads.
This Convince and Convert study involved a food company, and they used influencers such as food bloggers to reach their audience.
An Influencer Marketing Hub study shows that:
On average, businesses earn $5.20 for every dollar spent on influencer marketing.
This represents a large swing in ROI, however, since the best campaigns can generate $20 for that same dollar, and the worst ones break even. It’s fair to say that proper planning of the campaign is essential to its success.
Regardless of the difficulty in calculating an exact ROI figure, marketers generally agree that this modality performs well, which is why
89% of marketers say that influencer marketing achieves an ROI at least as good as other methods.
Keep in mind that marketers are counting more than just the value of immediate monetary sales. Instead, they’re including the value of positive publicity, brand recognition, and other less “tangible” benefits of getting influencer endorsements.
Young consumers love influencer marketing
With all this fraud, it’s easy to wonder if influencer marketing is even worth it. I’d like to say it is worthwhile, especially because of its popularity with the millennial generation and younger. One thing that this population loves is hearing from people who are just like them. They love to do research prior to purchasing anything, and like to know that a brand matches their values.
Here’s the breakdown of influencer statistics for younger consumers. According to a Google study:
40% of millennials feel that social media influencers know them better than their friends.
Google also found that
70% of teens on YouTube trust content creators more than celebrities.
Together, these statistics form an interesting point. Celebrities are increasingly considered out of touch. After all, they seem to always be chasing money and notoriety. Most social media influencers don’t do this: they’re just like the boy or girl next door. They don’t seem interested in the “latest thing” so much as the “right thing for them.” And when it comes to knowing their audience better than friends, it makes sense to consider how influencers make their money: by knowing their audience. How else are they going to build that following? By not listening? No, an influencer’s “brand” depends on their ability to listen.
Professionals love influencers, too.
There’s no question that influencer marketing has a “young and hip” image. In fact, say the phrase “influencer marketing,” and you’ll automatically think of young people showing off their stuff, or talking about the latest fashion. But older, higher-earning customers love influencers too.
49% of customers depend on influencer recommendations.
That 49% may not include too many of the oldest consumers, but it sure indicates that influencer marketing has pull across many segments of the population.
However, influencers have a longer reach than just those who “depend” on them. In fact:
75% of consumers trust recommendations they see on social media, including both influencers and their social circles.
Getting recommendations from family and friends, of course, isn’t new. How many times have people moved from one town to another and collected recommendations for a barber, beauty salon, or reputable car repair shop? Think of influencers as another segment of this phenomenon, only they don’t know the person they’re recommending things for, and they aren’t bound by geographic location.
Lastly, consider this statistic from IDC:
Among C-level employees and Vice Presidents surveyed, 84% use social media to guide decisions.
This teaches us two things. First of all, this level of employee makes a lot of money, and has a lot to spend. Therefore, influencer marketing is useful even for high-end brands. Secondly, even businesses that sell to other businesses can find this marketing modality profitable.
Influencer marketing works for business, too.
I don’t want to ignore my business readers. In fact, B2B selling is becoming more and more influencer-based. Granted, this type of marketing doesn’t involve the shiny pictures as much, but input from influencers is still critical.
According to the 2019 Content Preferences Survey Report:
46% of respondents consider colleagues and peers to be their most important sources of information for B2B purchases. Only 24% said this of industry newsletters.
This is an interesting finding, considering that industry newsletters are one of the older ways of distributing product reviews. Then again, any type of print media nowadays relies heavily on advertising revenue. Also, colleagues and peers are the ones who actually use these products.
The same study also found that:
92% of respondents find peer reviews and user feedback to be the most credible purchase guidance.
In some ways, this sounds like what statistics are saying about young consumers feeling influences know better than celebrities. This sort of content is often written after a product has been installed and used for a period of time, by people who know all about customer pain points.
With that said, don’t count out case studies:
47% said that case studies are the most valuable influencer content.
Keep in mind, this is often the business equivalent of sending out a sample, or it can involve bragging about great results when an influencer uses the product with a client. Either way, you’re looking at real-world usage here, and not just laboratory results or some construct of what the company wants you to believe.
One of the differences between influencer marketing and most other forms is the combination of fraud and poor association if you aren’t careful. For example, influencers (and yes, celebrities) have lost their sponsorships for bad behavior. Or they’ve turned out to be cheaters. To avoid this problem, you need to make sure to choose your influencers carefully.
Another concern is fraud, where favorable conditions are outright fabricated. Consider these statistics:
According to Invesp $1.3B was spent on influencers with fake followings.
Again, not chump change. This is a serious issue facing us as marketers, and the fraud happens when people claiming to be influencers approach a company and ask to help. In short, they take your money (or product sample) and don’t deliver. These are the campaigns that break even at best.
Of course the more commonly known form of influencer fraud are influencers who inflate the amount of pull they have with fake followers. This same Invesp study discloses that:
50% of marketers consider finding these fakes as the biggest challenge in influencer marketing.
After all, if you’re going to spend all that money on a marketing campaign, you want to make sure that you have a good chance of reaching your intended audience. Nothing in marketing is as expensive as losing your money on a scam.
Spotting fakes is especially difficult given that:
38% of influencers use tactics that artificially inflate their followings.
Kind of challenges your faith in humanity, doesn’t it? If you want to avoid being cheated, choose your influencers carefully. You’ll want to make sure that their followers generate genuine engagement with your brand.f
Don’t let these influencer marketing statistics about influencer marketing fraud scare you away from influencer marketing, though. The potential benefits far outweigh these risks, although by mitigating influencer marketing fraud risk you can achieve an even higher ROI on your influencer marketing program. Check out this list of influencer marketing tools which can help you do that.
Ready to give influencer marketing a try or increase your investment using best practices? Check out the definitive playbook for influencer marketing which I authored, The Age of Influence.
Any of these influencer marketing statistics surprise you? Any key stats missing? Feel free to comment below.
Dive further into the numbers and take a look at the state of influencer marketing in this great infographic from Influencer Marketing Hub.