Does Influencer Marketing Still Matter?

Think about it. Think back to the last substantial purchase you made online.

If I was a betting man, I would probably say you read through a handful of reviews, maybe watched an unboxing haul video or two, scoured the net for user-generated content, and most definitely searched for specific hashtags across social. I’m pretty sure you would have done all these things and in the process, encountered content created by an influencer. And you’re by no means alone.

Under the Influence
Research from the Influencer Marketing Hub reports that 61% of consumers trust influencer recommendations, compared to only 38% who trust brand-produced content. 72% of Gen Z audiences in North America follow influencers and 50% of millennials see influencers as a trusted source for product recommendations. This goes way beyond top-of-funnel awareness tactics, with 33% of Gen Z consumers purchasing a product based on an influencer’s recommendation in the past three months.

Influencer marketing is at the core of social commerce. Broadly speaking, influencers (i.e. individuals who have built a dedicated online following) provide endorsements, publicity or product mentions as a monetized service to brands. The transactional relationship between the brand and influencers has become much more transparent. Social networks have stepped up their game in collaboration with bodies like the Federal Trade Commission (U.S) and Advertising Standards Authority (UK) to mandate ‘paid partnership’ style disclosures. This has been a welcomed move among industry bodies, who believe it brings legitimacy to influencer marketing as a credible advertising solution.

It’s also good for consumers. Despite the debates over influencer content saturation, overconsumption, and the impact of the de-influencer movement, little has changed among social users’ appetite. Audiences are informed and savvy when it comes to how they access and consume information. Social is steadily becoming the source users are turning to for news, education, and inspiration. The nexus of trust has shifted in favour of the influencer’s point of view. 

Why it Matters for Brands
Traditional advertising is dead. All we have to do is look at the pivot of changing consumer behaviour and the impact privacy and data protection acts have had on how we engage with the world. We’re no longer watching mainstream television, print is pandering to increasingly shrinking audiences, ad-blockers are the norm, and where possible, we think nothing of paying extra just to have an ad-free existence.

Brands are seeking new and efficient ways to gain exposure to like-minded communities. Social is where audiences are congregating, but it’s not as simple as joining in the conversation or jumping on the latest social trends. Brands must work hard at earning their place within the cultural zeitgeist before they can achieve mindshare. Influencers have already established the blueprint for melding promotional material with authentic communication and are therefore best positioned to help them earn the awareness and credibility they crave.  

As an interaction, it plays perfectly into the typical brand engagement funnel that nudges a shopper from awareness to consideration, to conversion, and loyalty. Influencer content can have an impact on any one of those components, as they nurture and progress consumers from each prior stage to the next.

Does it Work?
It does. Brand marketers who invest in influencer marketing are experiencing 11x returns on their investment when compared against the performance of more traditional channels like display advertising. On average, brands are earning $5.20 USD for every dollar they spend on influencer marketing. This is the main driver behind the increase we’re seeing in brand investment pouring into influencer marketing. According to the Marketers who took part in the 2023 Influencer Marketing benchmark report, 67% intend to increase their influencer marketing budget over the next 12 months. An additional 15% indicate they expect to keep budgets the same as in 2022.

It’s worth remembering that the concept of influencing purchase behaviors is hardly a new concept. You can look back to 1760 for the beginning signals of influencer engagement. The monarchy at the time were considered to be the influencers of their era, and after British pottery brand Wedgwood created a tea set for the Queen of England, they began to market their brand as ‘royal-approved’ by association. Fast forward to celebrity endorsements, review websites, blogging, word of mouth, or recommendations from friends and family, and you’ll realize it’s all part of the same influence engine that has existed for decades.
Will we hit an influencer ceiling at some point? Probably, but what I foresee happening is the channel morphing into whatever next iteration it will reinvent itself into. Right now, social channels are where it’s at, audiences are engaged, and if the channel continues to perform and deliver returns, investment will hold.

The Bottom Line

Authenticity of content and relatability sits right up there with active attention as the new advertising battleground. For brands who want to engage with desirable demographic groups like the Gen Z cohort, how to embody these values is a critical consideration when thinking about social commerce strategies. Influencer content treads that fine line between communicating authentically, while helping brands become more visible, accessible, and desirable. They’re the short-cut to helping brands establish social proof and trust.

Image credit: Gerd Altman 

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