Influencer marketing is considered the most effective channel for delivering return on investment (ROI) for 84 percent of professionals. A majority of these marketers cite brand awareness as the top reason to use influencer marketing followed by driving engagement with the brand and reaching new target audiences.
Given the influencer marketing industry has reached $5-10 billion, it’s worth noting how brands are allocating their influencer budgets across platforms and activations. By 2020, spending on Instagram influencers is projected to reach $2.3 billion, and while the industry considers it the gold standard for influencer marketing, brands are increasingly challenged to find ways to flip the script on the typical Instagram influencer post as well as leverage other effective platforms to dedicate their budgets to.
Here we’re exploring what an average influencer budget looks like for brands, the key areas in which marketers are allocating influencer marketing budget and how allocation strategies are shifting, namely why the surge of macro-influencers is swaying marketers toward micro-influencers as cost-effective alternatives.
On their quest to create meaningful connections between product and consumer, brands are seeing the value in increasing their influencer marketing budgets. A study from Linqia showed that in 2016, influencer marketing budgets ranged from $25,000 to $50,000. Fast forward three years and 65 percent of marketers plan to up their influencer marketing budgets in 2019. A 2019 survey from SocialPubli also revealed that 18 percent of advertisers dedicate more than 50 percent of their budget to influencer marketing.
Despite the rise in fake followers and influencer imposters, brands are gaining high traffic and good-quality customers as a result of influencer marketing. Case in point: 71 percent of marketers rate the quality of customers and traffic from influencer marketing as better than other marketing sources, and their actions prove this.
On average, more than a quarter of digital marketers said they ran five or more influencer marketing campaigns in 2017 while two-thirds said they ran three or more campaigns in 2018.
According to an eMarketer report, how brands manage influencer marketing varies as 34 percent of respondents said their agency manages all influencer marketing programs in-house, while 26 percent hire a specialty agency and 20 percent rely on a platform.
Instagram’s shopping tools and increased users make it a powerful platform for sponsored posts and videos through influencers. Eighty-nine percent of marketers ranked Instagram as the top strategic platform for influencer marketing followed by 70 percent for YouTube, 45 percent for Facebook, 44 percent for a blog and 33 percent for Twitter.
Given the ease with which influencers can create sponsored content on Instagram stories, marketers have plans to dedicate even bigger chunks of their budget to Instagram influencer marketing. For example, 69 percent of marketers plan to spend most of their influencer marketing budget on Instagram in 2019, six times more than YouTube.
Instagram is viewed as the gold standard for influencer marketing, making the platform saturated with influencer initiatives and forcing brands to think outside the box when it comes to influencer tactics.
In the summer of 2018, Olay launched an Instagram campaign featuring nine micro-influencers, urging these women and others to unapologetically be themselves. A 28-day challenge and hashtag #FaceAnything complemented the campaign to encourage consumers to enhance their routines with Olay skincare products and later, go makeup-free at an event. Through the “Fearless 9” and their powerful stories, Olay generated relatability among the millennial female audience, 54 percent of which prefer the natural look.
YouTube came in a close second among the top platforms on which brands are allocating influencer budget. To promote its range of eyewear, Warby Parker successfully used YouTube for an influencer marketing video that strategically highlighted an influencer’s signature quirks.
YouTube comedian and actor Anna Akana, who boasts 2.4 million subscribers, was the star of Warby Parker’s 60-second video spot which Akana posted to her own channel. The video garnered over 210,000 views, a total of 13,000 likes and comments combined and an engagement rate of 6.7 percent.
Perhaps the most underutilized platform for influencer marketing budgets is Pinterest. Buick’s “Pinboard to Dashboard” campaign is one reason brands should reevaluate how they approach the platform. To appeal to a younger demographic, the auto company enlisted 10 design, fashion and food bloggers who had no ties to the auto industry to create Pinterest boards displaying how the Buick Encore car could help them express their personal style. The Pinterest campaign generated 17 million unique site visitors. Pinterest’s ability to drive discovery is undeniable as 93 percent of people said they use the platform to research purchases.
Social platforms may be brimming with influencer content every day, but brands actually strategically time influencer-led activations.
“We also see brands allocating influencer marketing budgets for certain times of the year or seasons. Interestingly, Q1 and Q2 are when most of the influencer budget is invested. It scales down towards the end of the year as brands and retailers gear for back-to-school and holiday sales campaigns,” PR and influencer marketing strategist working with technology, fashion and beauty brands, Jocelyn Johnson tells AList.
Johnson points out a Halloween DIY makeup promotion for which NYX Professional Makeup partnered with DC Comics and Warner Bros. The campaign featured five female influencers and one male influencer, each showcasing transformative makeup looks inspired by their favorite DC character with the hashtag #FACESOFDC. The content was amazing and the results were even better—19 Instagram posts and six videos reached more than 2.7 million followers with a 2.6 percent engagement rate.
Beyond social media, brands are spending big bucks on real-world influencer initiatives such as paid trips. Beauty and lifestyle brands Shiseido, Benefit Cosmetics, Revolve and Tatcha have dominated the influencer-led destination scene yet some brands’ influencer vacation strategies are changing.
For example, Benefit Cosmetics was an early adopter of the all-paid influencer trips, treating macro-influencers to tropical journeys across the globe, filling their hotel rooms with complete collections and organizing on-site activities meant to encourage bonding and user-generated content.
“I look at Instagram and see someone on a trip and I’m like, ‘Oh my God. I’m going to shoot myself in the head,’ because I’m not spending my marketing budget to send someone to an island to take pictures,” Bernadette Fitzpatrick, Benefit Cosmetics SVP of US marketing told Business of Fashion.
Though the brand still hosts these trips, it’s now rethinking its approach and focusing more on video content featuring influencers demonstrating how their products are used on themselves. This year, Benefit Cosmetics hosted its third annual “Benefit Brow Search,” for which it invites 20 contestants to compete for a chance at $50,000, of course, set at a cool venue (this year’s was Oheka Castle, New York). Mega influencers Desi Perkins and Patrick Starrr were among the contest hosts.
With the rise in costs associated with macro-influencers comes the need to change how influencer marketing dollars are spent. As a result, some brands are shifting their focus to micro-influencers. Working with micro-influencers enables brands to generate high engagement at a lower cost among highly engaged, niche communities. Macro-influencers reach more consumers overall, but micro-influencers have the advantage of cultivating loyal audiences.
Take Forever 21, for example, who discovered a curvy fashion micro-influencer through a tagged Instagram post and reposted her photo of wearing Forever21Plus jeans. The post on the influencer’s Instagram received 3,583 likes, 86 comments and a whopping 23 percent engagement rate. Reposting the influencer’s content not only helped Forever21Plus promote its clothing but also opened the door to a meaningful influencer relationship with a micro-influencer.
A majority of marketers believe that micro-influencers will be the biggest trend in marketing in 2019 yet the group’s potential is still undervalued.
“While these groups are on the rise, big brands are still focusing on those who have become professional influencers with huge followings. These macro-influencers tend to be very expensive and can be more challenging to work with. Research is starting to show a rise in engagement rates with micro-influencers—upwards of 60 percent. Brands are also seeing the value in nano-influencers that are more approachable and feel less commercialized. But working with this group comes with a word of warning as many do not have experience working with brands on a professional level,” Johnson notes.