Even with recent reports of fraud and fake followers, influencer marketing continues to be big business. According to measurement firm Points North Group, influencer ad spending by brands in the US and Canada totaled $211 million in Q2 2018. Nearly three-quarters ($150 million) was devoted to Instagram.
A February 2018 survey by influencer marketing agency Activate found that 88.9% of influencers worldwide said they were using Instagram for influencer marketing campaigns more than they did a year ago.
Despite Instagram's growing prominence in influencer marketing, an April 2018 CPC Strategy study showed Facebook was the leading platform where US internet users heard about new products, events or services from people they follow. Nearly 70% cited the ubiquitous social network, while Instagram (11.3%) and YouTube (9.5%) ranked a distant second and third. This survey was comprised of all age ranges, though, and many influencer campaigns are targeted at younger consumers. Gen Z has different preferences. To wit, Instagram was the most influential among internet users ages 13 to 17 and nearly on par with Facebook among those ages 18 to 24.
Social media users who have been swayed to make a purchase based on a stranger's recommendation were most likely to buy products like clothing, electronics or beauty items (22%). This category was also more popular with women (25%) than men (18%). Events, travel and services had lower levels of persuasion, and around 39% claimed to have never bought something based on an influencer's post. Gen Z and millennials were more inclined to buy event tickets than others, while those 45 and older were more likely to make a travel-related purchase.
That said, 40% of consumers admitted that they either do not see sponsored posts or are unable to tell if a post has been paid for. Music to brands' ears, this may be due to posts that are so natural and seamless that they blend in, but it could also be a result of influencers not disclosing paid posts with appropriate hashtags. Only 52% of social influencers worldwide labeled content as sponsored and 41% only did so when asked, according to a Zine study from January 2018.
Also, the definition of who is considered to be an influencer appears to be shifting. According to CPC Strategy, just 19.2% of respondents thought celebrities promoting products best described an influencer. Nearly 35% defined an influencer as someone who had a lot of social media followers, while 32.8% said an influencer is anyone who promotes a product on social channels.
This tracks with the rise of microinfluencers (which we define as an influencer with 1,000 to 10,000 followers), who are seen as more authentic by consumers. They are also more cost-effective for marketers since influencers with smaller followings command lower fees and are far more likely to work in exchange for freebies than their counterparts with massive fan bases.