The influencer marketing market has been massively expanding in the past 10 years. Brands and companies of all sizes have been reallocating more budget dollars to influencer partnerships due to the increased engagement with the target audience as well as the higher return on investment from influencer marketing than other traditional forms of advertising. 

Recent trends show the influencer marketing market may reach tens-of-billions-of-dollars by the end of the 2020s, boasting significantly greater compound annual growth rates than most traditional forms of advertising.

Key Applications of Influencer Marketing

Influencers are now an important aspect of many business functions; their influence extends far beyond just posting on social media. 

Below are four key ways that influencer marketing strategies are delivering influencer marketing growth, value and results today:

Brand Awareness and Identity:  Influencers create unique brand identities through consumer-facing storytelling that helps brands reach target audiences and build story-based brand narratives. A bridge between promotion and organic outreach through storytelling, influencer-generated content, and social engagement creates a level of trust in brands’ content that traditional advertising cannot provide.

Product Launches:  Influencers provide an early opportunity for consumers to see, demo, and review products for the first time. This is often part of an additional influencer campaign to generate buzz around the launch and to drive consumers to purchase through their content.

Social Commerce and Directly Connecting Consumers to Products:  Social media networks continue to evolve their services to include opportunities to purchase within influencer-content. This conversion process is linked to shoppable links and tagging products within the content, reducing the gap between ‘being inspired to shop’ and ‘making a purchase.

Community Engagement: Through their influence, brands build community among consumers who share similar interests and values. This creates opportunities for brands to engage long-term with their consumers.

The Transformative Technology of Marketing

Influencer marketing has moved from a purely creative business to an increasingly technology-driven one. Companies are using key technologies to improve how they find, manage, and evaluate their influencers and influencer campaigns.

AI (and Machine Learning)

AI has become an important part of every influencer platform. Artificial Intelligence (AI) uses algorithms to analyze large amounts of data so brands can effectively find the right influencers for their products or services. In addition to helping brands find appropriate influencers, artificial intelligence helps brands predict their campaigns’ potential for success and optimize their strategy in real time.

Analytics and Predictive Insight Tools

Brand marketers now have access to more detailed analytics (trackable performance metrics over time), rather than basic analytics (one-time data points). Therefore, brands can now track multiple KPIs (key performance indicators), such as engagement, conversions, and ROI, with a high degree of accuracy. Using predictive analytics will enable marketers to make better data-driven decisions prior to launching a campaign because they will better understand the likely outcome of their campaigns.

Transparency Tools and the Use of Blockchain

Many of today’s emerging influencer platforms are implementing blockchain as a means of creating a secure method of verifying influencers’ authenticity and combating the fraudulent use of influencers (i.e., fake followers or fake engagements). By creating a secure method for verifying influencers’ authenticity, brands and influencers will establish a trust-based relationship with one another.

Influencer Marketing Trends Today

The landscape of influencer marketing trends is changing faster than ever before. In order to be able to compete in today’s marketplace, brands need to keep up with the changing trends related to this space.

1. Rise of Nano and Micro-Influencers: Influencer marketing agencies are now choosing to work with nano (1,000 to 10,000 followers) and micro-influencers (10,000 to 100,000 followers), as these influencers tend to have highly engaged niche audiences and generally cost significantly less to engage than traditional networks of celebrities.
2. Overwhelming Popularity of Shorter Form Video Content: The use of short-form video content, such as that found on TikTok and Instagram Reels, is the fastest-growing type of content being consumed on any platform, and has very high levels of engagement from the viewers, and is extremely shareable.

1. Rise of Nano and Micro-Influencers: Influencer marketing agencies are now choosing to work with nano (1,000 to 10,000 followers) and micro-influencers (10,000 to 100,000 followers), as these influencers tend to have highly engaged niche audiences and generally cost significantly less to engage than traditional networks of celebrities.

2. Overwhelming Popularity of Shorter Form Video Content: The use of short-form video content, such as that found on TikTok and Instagram Reels, is the fastest-growing type of content being consumed on any platform, and has very high levels of engagement from the viewers, and is extremely shareable.

3. Long-Term Partnerships with Influencers: Brands are beginning to gradually evolve from doing one-off posts to developing and executing a much larger and more extensive body of work with influencers in order to develop trust with audiences and develop continuity across the storytelling of their brand.
   
4. Localized Campaigns and Diverse Voices: Localized influencer campaigns utilizing regional influencers are resulting in greater levels of engagement in tier 2 and tier 3 cities across the globe, demonstrating the value of localized, culturally relevant content.

Future Prospects for Growth

The future of the influencer marketing industry looks bright and dynamic:

• Data-Driven Strategy: The use of enhanced data analytics will continue to improve the selection of influencers for companies and their performance with the public by creating more accurate and precise measurements that allow companies to maximize their return on investment from influencer marketing campaigns.

• Integration of Emerging Technologies: The ability to integrate new technologies (e.g., augmented reality and interactive experiences) into influencer marketing will provide opportunities for companies to create unique brand/influencer collaborations that provide their audiences with an immersive and entertaining experience.

• Expanded Global Reach: Influencers will continue to help brands enter new markets and reach new audiences as the global marketplace continues to expand.

As more marketers adopt performance-based influencer marketing strategies, the influencer marketing industry will become an integral part of digital marketing as a whole worldwide.

Conclusion

The expansion of the influencer marketing market can be attributed to the increase in popularity of social media content, the evolution of how consumers engage with brands and the consumer demand for brands to be endorsed by individuals whom they see as trustworthy, compared to the less appealing endorsement from a traditional advertisement.

FAQs

What is the current size of the influencer marketing market?

The influencer marketing market place is currently valued at more than $20 billion around the world; It continues to expand at a strong double-digit CAGR. Moreover, it is one of the fastest-growing segments of digital advertising.

What are the key applications of influencer marketing?

Marketers utilize influencer marketing to drive brand awareness, launch new products, sell products via social commerce, and engage with their customers in new, innovative ways. Additionally, influencer marketers are often able to use influencer marketing to generate leads and drive performance-based campaigns.

How is AI transforming the influencer marketing industry?

AI provides brands and marketers with the ability to find the best influencers through audience analytics, engagement data, and predictive insights. AI also provides brands with the tools to enhance fraud detection, optimize their campaigns, and measure their ROI on influencer marketing campaigns.

Which industries benefit most from influencer marketing?

Industries such as fashion, beauty, lifestyle, fitness, travel, technology, and e-commerce benefit significantly from influencer marketing, as they often rely on visual storytelling and on building trust with consumers.

What technologies are used in influencer marketing platforms?

Influencer marketing Platforms generally utilize a variety of technologies, including artificial intelligence, machine learning, advanced analytics, integration to customer relationship management databases, and fraud detection tools. In addition, many influencer marketing platforms have incorporated social listening, performance tracking, and automation capabilities.