Influencer marketing is worth at least $1 billion, and it has grown up a lot this year, with more sophisticated data and tighter media contracts. But influencer marketing still faces problems like fraud and lack of sponsorship disclosures required by the U.S. Federal Trade Commission. Here are five things we learned about influencer marketing in 2017.
Data around influencer marketing has improved
Although it is hard for many marketers to pinpoint return on investment for influencer marketing, the ability for brands and agencies to dig into the audience data of influencers has significantly improved over the past year, according to Kerry Perse, U.S. director of social media for OMD.
“Measurement capabilities of influencer networks are getting sophisticated,” said Perse. “They used to just provide delivery — or impressions — and engagement metrics. But now, some [influencer platforms] started partnering with Nielsen to create studies or [with] viewability companies like Moat.”
She added that agencies can now also get data around the tone of voice, content style and follower demographics of influencers to make sure brands reach the right audience.
Influencers sign tighter contracts
Talent agencies and influencer platforms updated their influencer contracts to require briefs from brands or agencies, and clear up gray areas like post timing, content rights, minimum performance guarantees and FTC compliance. Media agencies and social media shops now also work closely with their legal teams to ensure their contracts are updated and fluctuate with trends.
Influencer marketing goes beyond social
Agencies are increasingly looking to use influencer content outside of the social media environment for programmatic buying, podcast promotions, e-commerce advertising and even TV commercials. Of course, there are additional content usage fees.
Perse believes influencers are becoming media properties, so her team usually structures influencer contracts to include longer content usage periods across different platforms. “It used to be that we could use the content for the lifetime of a campaign, which is typically around six weeks. But now, [content usage] is often about six months,” she said.
Micro-influencers are a flawed concept
Micro-influencers are trendy in influencer marketing, with some advertisers thinking social stars with thousands of followers deliver higher engagement than those with millions of followers. Others believe micro-influencers are a scam started by influencer marketing platforms because it is easier for those platforms to recruit these influencers.
Perse thinks the labeling of micro-influencers is irrelevant, as it’s all about how engaging an individual’s content is. “We care about the quality of the content and engagement,” she said. “We also examine how their organic engagement performs compared to their branded engagement. If an influencer’s followers love this individual’s content but don’t care about branded content, we won’t work with this person.”
Michael Dobson, group director of social media for Crossmedia, thinks that despite the labeling, influencer marketing is essentially more of a branding play than a performance play. “Influencers are content generators for a brand. While you can drive some direct response, it’s more about how you position it as a branding play,” said Dobson. “Influencers are limited on tracking direct response but strong in the engagement proxies of social.”
Fraud and FTC compliance are growing problems
Like other forms of advertising, fraud plagues influencer marketing. Some of influencers’ social media fame is fake: Wannabe influencers use bots to appear popular, buy followers or turn to Instagram pods — groups of 10 to 15 users commenting, liking or sharing each other’s posts.
Fraud aside, the FTC has aggressively cracked down on sponsored content from influencers who fail to clearly and conspicuously disclose their endorsement relationships with marketers. Some advertisers argue that it’s tough to remain both authentic and FTC compliant, while others believe the FTC should create more specific guidelines for influencers.