The recent evolution of influencers

His last name is kept secret and so is his residence. He made 11 million dollars last year and was thereby ranked 8th on the Forbes list of best-paid Youtubers of 2017 (Forbes; 2018). Other figures found on his account are 12.7 million subscribers, 1.1 billion views on his most viewed video and 19.8 billion views in total on that account

Ryan is a big influencer who can make or break you

The man in question actually is not really a man. Ryan ToysReview (as no one mentions his full name) is only a seven-year-old and is already booming in his business: reviewing sponsored toys on YouTube. In the world of toys, Ryan is a big influencer who can make or break you. “The toy industry is paying close attention to stars like Ryan. ‘If a product gets ten million, twenty millions views, and people see that Ryan loves it, it has a huge impact on retail,’ says Jim Silver, CEO of the review site Toys, Tots, Pets, and More. […] ‘Especially since the kids are watching so much on their phones at home’” (The Verge; 2016).


What is an influencer and why are they hot

Just as how Ryan is a good example of an influencer in the toy business, there are many examples of people matching the definition of “influencer” for every single business out there. According to BusinessDictionary, influencers are individuals who have the power to affect purchase decisions of others because of their (real or perceived) authority, knowledge, position, or relationship. Examples of worldwide influencers are Selena Gomez (entertainment), Christiano Ronaldo (sports), Kylie Jenner (cosmetics), The Rock (entertainment), Cara Delevigne (modelling), Huda Kattan (beauty), Cameron Dallas (comedy), Michelle Lewin (fitness), Chiara Ferragni (fashion) and Murad Osmann (travelling) just to name a few of the list that goes on and on (IZEA, 2017).


Influencer marketing is believed to be the next big thing for a couple of simple reasons. The first is that social media are taking over the marketing world, stimulating people to base their purchase on fellow consumers including their favourite personalities (ADWEEK; 2015). The second is that a study from McKinsey has elaborately shown that consumer-to-consumer word of mouth recommendations, including those from influencers, generate more than twice the sales compared to paid advertisements (Bughin, Doogan & Vetvik; 2010). To really emphasize the potential of influencers, it has been discovered that the average American is being exposed to an estimated 5,000 advertisements a day (Story, 2007) causing him to become “banner blind” and unconsciously tune out advertisements (Adotas, 2013). Signs show influencer marketing is probably going to be hot, if it is not already.

The average American is exposed to 5000 adds a day

What influencer marketing used to be

Since it seems to be a very remarkable and unexpected trend to some people, one may be wondering when and where influencer marketing suddenly arose. However, influencer marketing is nothing new actually. The act of using highly regarded and influential individuals to endorse consumer goods and services has been around for centuries. In its early stages, influencer marketing activities were mostly performed by popular celebrities in advertising campaigns. Crowd pleasers like Selena Gomez, Cristiano Ronaldo and Britney Spears used to be brand ambassadors promoting products from – respectively – Coach, Nike and Pepsi. Even though this kind of influencer marketing is still popular among marketers, the ‘Evolution Of The Influencer’ (Wallace; 2017) took a step towards more authentic and trustworthy people: social media influencers. The internet democratized influence to a point at which regular people can create huge followings via their blogs and social media channels.


Earned vs paid strategies

Regarding the strategies revolved around influencers, the Forbes contributor John Hall likes to split these into earned strategies and paid strategies. Earned content is unpaid content displayed by natural advocates of the brand whereas with paid strategies the brand pays influencers to (positively) display their brand. Earned content is the strongest of the two types in a sense that it increases engagement levels the most, stimulating consumers to make a positive buying decision. It is, however, the most difficult type to attain as it should come from the fellow users naturally. On the other hand, paid content is a much broader strategy, which is more useful to gain awareness; a prerequisite for engagement.


About these strategies, Thijs Jaski – Manager of Social Media ING – mentioned that paid strategies have lost quite some of its credibility already, explaining why paid content does not add much to the engagement levels. Even though influencer marketing is still in its infancy, consumers have already started noticing that they are being influenced by the paid influencers; something which is not particularly appreciated. Thijs, therefore, questions whether paid influencers are the right strategy to gain awareness.


Ryan is one of those paid influencers left proving Thijs’ doubt wrong, even though it could be argued that Ryan’s age is the reason why people still cling on to him. The general honesty of a child adds to Ryan’s trustworthiness, something others apparently seem to lose quickly. “You can’t find that much fault in something this innocent”, claims Sarah Szabo from Nicki Swift (YouTube).


Mega vs Micro influencers

As stated in the previous paragraph, viewers tend to not believe paid strategies anymore. This happened because of two factors. Firstly, several social media channels have made some restrictions on influencer marketing; influencers are now legally obligated to mention it when they have been paid for promotion. Secondly, paid strategies are usually performed through mega influencers. These are the key voices in social media, have a fan base consisting of minimal 10,000 followers (Tint; 2018) and their online presence is their full-time job. However, our sources have shown a remarkable trend: the more followers a social media user has, the less engagement they get on their posts. Besides the fact that mega influencers are less likely to get comments, they are also increasingly expensive. These are the main reasons why most companies recently turned to micro-influencers.

The more followers a social media user has, the less engagement they get on their posts

Micro-influencers are the ones on the web with smaller, but more responsive followings. Content created by micro-influencers aligns more with the successful concept of word-of-mouth marketing. Where paid strategies thus match with mega influencers, the micro influencers fit the earned strategies better. An example of a company using micro-marketing is the multinational skincare brand Clinique. Clinique decided to use the micro-influencer strategy to raise awareness for their new line of products for men. To achieve this, they contracted male influencers as filmmakers, stylists and outdoorsmen, who were asked to post pictures in which they show the use of Clinique’s products in their daily lives. Results were engagements rates almost 4 times the size of these generated by the standard Clinique Instagram account and more than 67,000 interactions (Tint; 2018). Micro influencers cause mega engagement.


The influencer strategy cross-table

Figure 1 shows how the influencer strategies (paid vs earned and mega vs micro) match each other. Box 4 is one of the more reasonable outcomes as it makes little sense to use micro influencers for awareness as they only have a small fan base. Therefore, micro influencers are perceived to not being paid causing them to be trustworthy and thus causing them to stimulate engagement box 1 is economically supported too, but because of the opposite: mega influencers with their large fan bases are the only influencers being paid to cause lower trustworthiness/engagement opposed to high awareness.


On the contrary, box 3 is economically inefficient because of a couple of upsides and downsides of which you would have to weigh against each other. The benefits are 1) that influencers are more easily attainable as they are given a monetary incentive to show your content instead of having to do this naturally and 2) that micro influencers are less expensive compared to mega influencers. The major disadvantage is that you eliminate the trustworthiness by endorsing the influencer.


If we would summarize these gains and losses we could conclude that the micro influencer in box 3 has the exact same effect as a mega influencer in box 1, but simply on a smaller scale. This conclusion causes a final and decisive disadvantage to emerge, being that now more influencers have to be found to collectively cover the same ground as one mega influencer. This considered, transaction costs would have to face major increases. Box 3 is therefore rather uninteresting, as it has a similar effect as box 1 has, but with additional transaction costs.


Box 2 is the sweet spot in the market, but as you would expect also very rare. It could very well be that mega influencers naturally promote your brand for the same reasons micro influencers do. However, mega influencers are perceived as untrustworthy more quickly, even if they are not endorsed, because of their reputation for being paid. Mega influencers are therefore also more cautious with showing their usage of brands. Therefore, while box 2 and 4 are evenly uncontrollable, box 2 is even less likely to happen because of the above reasons.





The future of influencer marketing

It is fair to state that 2017 was the year of influencer marketing. We do not expect this trend to be over soon, but there will be some changes in this field over the next years. This has all to do with a couple of trends that started in 2017 and will definitely continue in the upcoming years. Firstly, probably one of the most important and biggest trends you can expect in 2018 is the increasing transparency of partnerships by influencers. In the early years of influencer marketing, it was possible for brands as well as for influencers to keep their partnerships with each other secret. Since the implementation of the FTC Endorsement Guides (April 9, 2017), it is legally stated that an influencer should clearly disclose if he or she is being compensated for promoting a certain brand. So far this can be easily done by adding simple hashtags to the post like #ad or #sponsored. We expect, however, that this will be made more difficult in the years to come. Secondly, influencers are going to be active on more and more social media platforms. Whereas Instagram was the most popular platform for influencer marketing in 2017, YouTube, Snapchat and even Pinterest are starting to catch up. This phenomenon is also made possible by the fact that the pool of influencers to work with enlarges day by day. The average 9-5 worker has realized that anyone can become an influencer nowadays. In fact, “social media influencer” has become an actual career that people aspire to (Sprout Social, 2018).


Influencers pop up on all sides of the internet in both paid and earned strategies, both mega and micro forms, and apparently in all industries and age-ranges. as the trend of influencer marketing moves fast, it will soon be clear whether it will be the next big thing or drown in its fake credibility. The earned content seems to have a good chance of survival knowing its nature, but whether it will ever become predictable remains rather unclear. For now, the mega influencers see a good opportunity to make some extra cash because of their fan base while the micro influencers wander around the web unaware of the strategies they are part of and the desired impact they make.

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Britt Oude Lenferink & Vincent Visser