WHY IS THERE SUCH A HYPE AROUND IT? In the last five years expenditures of influencer marketing have increased by more than 700% so this hype is real. The reasons for this hype are first of all that users or consumers spend increasingly more time on these platforms. People used to watch TV, listen to the radio and maybe read the newspaper, but there is a shift. Now many – especially young – people spend a lot of their leisure time on social media. In Belgium, for example, the average person used social media 105 minutes per day during the first quarter of 2021. That’s a lot of time.

A second related reason is that the most active group on social media consists of mostly young users which is a very attractive consumer group and thus very attractive for many brands. A statistic in 2019 showed that 83% of the people between 16 and 24 years used social media. So almost everybody. While the same share for people between 45 and 54 years was only 39%. So the young constitute this general shift towards social media and this creates a very attractive consumer group on social media. These are the two reasons from a macro perspective.

Consumers who watch TV or listen to the radio are by now very aware of commercials and advertisements through which brands like to promote their products. It made them somewhat sceptical of commercial activities by companies for traditional brand marketing. With influencers it is different because people follow these influencers on social media actively and out of their own free will. They are interested in the content of these influencers and even imitate their style or their behavior. Fitness influencers for instance, talk about fitness activities and the followers are very much interested in fitness products. So influencer marketing is a good way to target certain consumer groups. That’s the third reason why there is this hype around influencer marketing.

WE GET THE IMPRESSION THAT INFLUENCER MARKETING OFTEN INVOLVES WOMEN, SUCH AS ADVERTISEMENTS FOR COSMETICS. Correct, the majority of influencers are women. That’s also due to the fact that there are certain product categories for which influencer marketing is more popular, as for beauty products. But there are also male influencers who have a high number of followers. In sports, outdoor and fitness for instance it is more divided; you have both male and female influencers. Another issue that comes up here is the difference between influencers and celebrities. One of the most popular celebrities on social media is Cristiano Ronaldo with more than 400 million followers on Instagram. He is a male mega influencer.

IS INFLUENCER MARKETING JUST A NEW FORM OF CELEBRITY MARKETING? Celebrity marketing had been around for some 50 years with actors, athletes, etc. being used for sponsorships. Andre Agassi for instance was a Nike ambassador and so is Cristiano Ronaldo, while Lionel Messi is doing sponsorships for Adidas. The general idea that a brand uses famous people to promote their products is nothing new. The big difference now with influencers is that they have gained their popularity solely by being active on social media. The pure social media influencers start an Instagram account and increase their audience over time. They are the genuine social media influencers compared to celebrities, athletes, singers, actors who also happen to be on social media and are also doing advertising for brands on social media. What we really mean by influencer marketing are these specific social media influencers who have gained their fame on Instagram or TikTok.

DO INFLUENCERS HAVE A SHORT LIFE, ECONOMICALLY SPEAKING? You could say that the peak age range for influencers is between 20-35 years, because youth, beauty and good looks do play a certain role for influencer marketing. So influencers have a certain natural life span. On top of that some influencers are sometimes confronted with scandals when social media finds out something about them, such as extramarital affairs. Of course these scandals are picked up immediately and this can lead to decline of popularity. We also see that influencers just become boring for their audience. On social media people always want to have new attractions, looking for new ways to spend our leisure time and when bored they quickly move to other influencers who have more creative content. Influencer marketing is thus a full time job as you always have to find new ways to attract your audience. You have to like the fact that you expose your whole personal life. This is important to consider because it is just your personal life that makes it interesting for brands to do advertising with you since consumers are mainly interested in what is going on in their personal life and brand names are part of it. The better influencers are able to subtly weave these brand messages into their personal stories, the more attractive and trustworthy they are for the audience and for the brands they promote of course.

HOW CAN FIRMS USE INFLUENCER MARKETING SUCCESSFULLY? Brands have to consider several things. The influencer has to fit within the product or the product category and has to have a certain expertise within the niche; the use of the product should appear self-evident and natural. The audience of the influencer should of course fit well to the product and brand image. There are agencies specialized in analyzing Instagram data and all the information on what influencers do or have done in the past. They analyze their followers in the same way: what is the age distribution, are they from one specific country or either from a diverse set of countries? You can get really detailed information about influencers and their audience. There is a great market for these agencies nowadays and companies rely on them to find the right fit. So that’s the first thing, being able to judge the fit between brand, influencer and his or her audience.

Then there is the question how good the influencer is at integrating the branded post in their daily activities. There are more and less successful influencers regarding this criterion. The successful influencers are able to integrate a commercial sponsored post without being perceived as advertisement and make people that way interested in buying the product. The last thing, and that is rather new and unusual for marketers, is to give influencers some freedom in developing posts and stories on Instagram and other platforms. Marketers are used to control the message and to make sure that the message is in line with the corporate identity or the company’s slogan. But with influencer marketing it works different: It is the influencer who produces the content. And here again consumers very quickly realize when a post or story appears to be just scripted by the brand. So it is important to give them some creative freedom and to let go of the message. That contains also a risk. There is a very thin line of giving freedom to influencers but at the same time still having some kind of control.

HOW CAN SUCCESS BE MEASURED? The criterion that is most relevant for brands is how much sales influencers generate. They promote a certain product and the question is how do consumers react; buying the product or booking the travels or whatever. Another way is to look at the ‘engagement’ rate: Do people react to posts or stories by, e.g., “liking” it or by sharing them with their own followers. It is the brand’s responsibility to check before they actually start a cooperation with the influencer whether the influencer whether his/her ways to reach a certain follower count or engagement rates in the past are legitimate or whether there is some fraud going on. The agencies I just mentioned, are focused on or specialized in analyzing influencers and their audiences. They also have ways to track fraud, such as automated bots that create engagement or paid followers. It is really important to understand all circumstances before the decision to collaborate is made.

WHICH INFLUENCERS SHOULD COMPANIES USE FOR THEIR SOCIAL MEDIA CAMPAIGNS? I already mentioned good fit and checking for no fraud. Companies often wonder whether they should work with ‘big’ influencers who have more than 1 million followers (mega influencers) or with ‘small’ influencers who have maybe between 10,000 and 50,000 followers. In one of my projects we look exactly at this question using Instagram as an example. We found that the absolute highest engagement (the total number of likes or comments) is achieved by influencers with an intermediate follower count. Our explanation based on our data points in the direction of two forces. One is called the ‘reach force’: The more followers you have, the more people you are able to reach with a post or story. The other force is the ‘engagement likelihood force’; people are not equally likely to engage with the influencer’s post. And here it is just the opposite. It is rather the small, nano influencers that achieve the higher engagement likelihood or engagement rate.

The reason is that the bond between the small scale influencer and its followers is a lot tighter and stronger than when there are many followers. Why? Because influencers with 10.000 followers are more responsive towards their audience. It feels from the consumers’ point of view as if they interact and have a close relationship with the influencer. We call this a parasocial relationship. You have never met the person you like but the perceived tie-strength to this influencer is very high. If you combine the two forces together, the engagement likelihood force and the reach force, we come up with a inverted u-shaped relationship. It is not the very small influencers who are successful because they just don’t reach many people and not the very large, mega influencers, because their tie-strength is not very close. It is rather the intermediate influencers that combine the two and are still close to their followers. They have quite a high reach, the highest absolute engagement and lower cost than the really big influencers. From a firm’s point of view it is also efficient to work with them.