business.com receives compensation from some of the companies listed on this page. Advertising Disclosure
Home

Has Influencer Marketing Peaked?

Julie Thompson
Julie Thompson
business.com Contributing Writer
Updated Jan 23, 2023

While still a powerful tactic, a decline in trust may lead some businesses to reconsider how they use influencers.

Since digital marketing trends can shift daily, deciding where to put your dollars is understandably difficult. One area many businesses have turned to is influencers. Tapping into this market has proved successful, but has this tactic run its course?

Influencers started showing their power on social media platforms in 2004 and, despite some recent issues, their reach continues to rise, with an expected $84.89 billion market by 2028, according to Influencer Marketing Hub.

Before blindly hiring an influencer as a digital marketing tactic, though, it’s important to consider the pros and cons of using this strategy. While not every company will financially benefit from an influencer campaign, choosing the right influencer partner can boost your company’s creativity, increase your target audience, multiply sales and build trust.

Let’s look at how to use influencer marketing effectively and avoid the pitfalls that could decrease ROI.

Why influencer marketing is losing influence

Influencer marketing isn’t always well-received among your target audience. Whether you pick a controversial influencer or get caught up in social media drama, you can encounter a few risks when utilizing influencer marketing.

Trust issues

One metric that’s certainly peaked in influencer marketing is trust. Inflating your Instagram follower count is easy and inexpensive: “Follow farms” can sell Instagram users thousands of fake followers for the price of an Uber ride. For a small premium, these followers can be “engaged” followers – fake accounts that not only follow you but like your pictures, thus raising the all-important likes-to-followers ratio. 

>> Learn More: How Influencer Marketing Fraud Scams Businesses

Users can also set up “follow-unfollow” bots, which scrape the followers of competitor brands or influencers and follow them, get followed back, and then automatically unfollow a few days later. The practice is not merely deceptive to other Instagram users, but it’s also costly to sponsors. A recent report by CHEQ and the University of Baltimore estimates fake followers cost brands $1.3 billion.

#SponCon

Another consequence of the ease of purchasing fake followers is that the barriers to entry – a strong following – are low for those trying to make it as an influencer. Between that and the rise of influencers in the popular consciousness, it has become a saturated field. As a result, wannabe influencers are now finding increasingly dubious ways to beat the competition.

One example is the practice of “SponCon,” which is when users tag brands in photos and captions in a way that suggests product placement without any sort of business dealing with the brand. The con is twofold: It signals a certain lifestyle to followers and credibility to actual potential sponsors.

Insincerity

There’s no doubt that influencers have lost their trustworthy insider status. Whether that’s converting to a decline in the audience is less clear.

“If you follow your favorite influencer, it doesn’t matter if they have bought some followers,” said Anna Komok, head of PR and marketing at HypeAuditor, a website that spots fake Instagram and YouTube followers. “You like their content, not their number of followers or likes. These metrics are only useful for prospective advertisers.”

That’s not to say that audiences aren’t growing skeptical. “Influencers have problems with audience trust, but it’s not because they artificially inflate their numbers,” Komok said. “It’s because many of them advertise everything they were paid to.”

As Komok explains, many influencers gain popularity through the good endorsements they give on social media, whether that’s fitness advice, sustainable clothing brands or the best contouring palette you can find at a drugstore. When influencers abuse such endorsement power by accepting any and all sponsorship deals, they lose their audience’s confidence in them as reliable sources of advice. This may lead to a decline in click conversions on the marketer’s end.

YouTube drama

Influencers on YouTube have also suffered a few high-profile scandals in recent years. In 2018, Logan Paul faced outrage for his vlog of Japan’s Aokigahara “Suicide Forest,” featuring an apparent suicide victim. Another YouTube star, Brooke Houts, was denounced by her fans after accidentally uploading a video of her hitting her dog. There was also beauty blogger James Charles’ feud with fellow YouTuber Tati Westbrook over, among other things, choosing to sponsor Sugar Bear Hair vitamins over Westbrook’s competing line of supplements.

All of this controversy shows how the very genius of influencer marketing – their relatability with audiences – can backfire. Unlike mainstream celebrities, influencers are amateurs by definition. That realness also presents a certain risk.

How influencer marketing can still have value 

“In the last few months, we have seen a consistent downward trend in converting from influencer marketing,” said Jeff Byer, CEO at Jeff Byer Inc., a web design and promotion company. While Byer does not consider the data conclusive at this point, he does note a marked change in consumer behavior.

While influencer marketing has passed its honeymoon phase, brands do not need to abandon it yet, as long as they’re strategic.

Seek out credibility 

Slapping a few product placements on the largest following you can afford will no longer suffice; social media consumers are too savvy for that now. Instead, Byer suggested seeking out influencers according to their perceived credibility.

“Many influencers don’t manage their ratio of promoted posts to natural posts,” he said. “Reviewing an influencer’s feed ratio from the past three months is becoming a more reliable indicator of conversion opportunities.”

Consider micro-influencers

This leads to marketing’s newest trend: the micro-influencer. Rather than choosing the influencers with the highest follower counts, some brands now find better success soliciting those closest to their target audience.

TipTip: A micro-influencer will have 1,000 to 100,000 followers. A macro-influencer has more than 100,000 followers. A micro-influencer should be significantly less expensive to work with than a macro-influencer.

While micro-influencers may not get your brand the same levels of exposure, their value lies in their credibility and engagement with followers. This translates to higher conversion rates, which is how Byer suggests brands should evaluate their influencers, rather than by follower counts. “This will force [influencers] to be more genuine or pay more attention to the audience reaction to brand posts,” he said.

Experiment with follower levels

Obviously, the follower count should not be discounted entirely. The key is to get the highest follower count possible without suffering a decline in engagement.

According to Komok, there is no “sweet spot” – depending on the influencer, product, location, etc. However, “if you have a niche product, most likely your target influencer has up to 15,000 followers.”

For many brands, this won’t be enough exposure. “To obtain significant results, you need dozens or even hundreds of micro-influencers,” Pomok added. “But you will definitely be satisfied with the results.”

The benefits of influencer marketing

Custom content creation

The best influencers know what their community wants to hear and see. By letting the influencer create custom content for a large audience, your company can benefit from following current marketing trends and resonating with a targeted audience that may not have been aware of your brand or product line before.

Affordable marketing

Influencer marketing campaigns can be secured for as little as $100 to upwards of $1 million. Even if you have a limited budget, you can still have an effective campaign by doing your research. 

Choose an influencer who appreciates your brand message, engages with your product line and communicates consistently. Experiment with a starter-level influencer campaign, measure your ROI and examine final reports. If the first campaign was a success, consider investing more marketing dollars to increase your reach the next time around.

Quick sales increase

Launching a new product line? Interested in a site-wide sale to liquidate inventory? Whatever your sales needs, having an influencer visually display your products and give their seal of approval can help you accomplish your sales goals, fast.

FYIFYI: Sixty-one percent of consumers use influencer, family or friend recommendations to weigh buying decisions, while only 38 percent of consumers trust recommendations from a brand on social media, according to a study by Matter Communications.

Long-term relationships

Building trust with your customers helps you maintain the longevity of your business and increase repeat customers. The more you work with the influencer, the more their followers will trust your brand as quality and authentic. An influencer may work with a brand once if they are enticed by the products or need the partnership, but repeat clients improve both the influencer’s and the company’s authenticity.

Additional reporting by Siri Hedreen. Some source interviews were conducted for a previous version of this article.

Image Credit: Rawpixel.com/Shutterstock
Julie Thompson
Julie Thompson
business.com Contributing Writer
business.comb.
Julie Thompson is a professional content writer who has worked with a diverse group of professional clients, including online agencies, tech startups and global entrepreneurs. Julie has also written articles covering current business trends, compliance, and finance.