It’s no secret that influencer marketing is a thing and brands are relying on and utilizing prominent social figures now more than ever. But, just how much are companies spending on it?
Social Media has opened the door to many new jobs and introduced entire new departments to some companies. When looking at a marketing budget for the year, some companies and brands are even spending around $1 billion on these “influencer” campaigns. Although influencer marketing encompasses all channels of social media, Instagram has certainly emerged as the top channel for fashion brands.
When we hone in on the Instagram market, the price tag for a post is all dependent upon one thing: the number of followers you have. In a recent Harper’s Bazaar Article, they reveal that some influencers can make up to $100,000 for one post. Yes that’s one-hundred thousand dollars, not a typo, and yes some people are making your entire yearly salary by hitting the post button while sitting on their couch… let that sink in for a minute. Now although that type of pay day is reserved for the elite Instagrammers, who probably have anywhere above a million followers, others with followers in the hundreds of thousands can make anywhere from $5,000-$20,000 for a single post. Not bad.
Some Instagrammers are even getting paid to travel the world and live in expensive beachside villas in Thailand and Fiji. Probably the most well known is Jay Alvarrez (pictured jumping into a pool in the cover phtoto), a pro surfer turned professional world traveler who spends his day traveling the world for different brands and hotels. Jay has around 6 million followers on Instagram.
Although it is hard for companies to track the ROI of these deals, a study done by Burst Media shows that on average advertisers received $6.85 for every $1.00 spent on their “Burst” Influencer Marketing program and apparel companies were even higher, sitting at $10.48 for every $1.00 spent. Although there could be a little company bias going on here, the numbers must be good if brands are dumping so much money into these programs.
In an August 2015 Duke University Business School study, surveying 288 U.S. senior marketing executives, digital marketing spending will grow by 12.2% with the largest growth in social, mobile, and data analysis. Currently at an average of 10.7%, social media spending will grow to nearly a quarter of the total marketing budget within the next 5 years.
Before the development of the social crazed world we live in, brands would advertise in magazines and that was pretty much it, aside from some billboard ads for bigger brands. Now rather than wait to schedule an ad in a magazine and then wait for it to print every month, brands have the luxury of instantly showing the world what they are working on. This allows brands to not only get the word out about their products faster, but also build a hype around what they have in store. Much like adidas did with Kanye and Nike does with Lebron, they post the process and use these influencers to get people excited about their products before they drop. Consumers get emotionally invested in the upcoming drop and almost feel that they need to buy whatever it is, on release day.
Now I’m not sure what the next big marketing trend will be, but I am sure, that influencer marketing is here to stay for a while. If utilized in the right way, they are a great resource to get the word out about your brand and grow your following.
Posted above is a great video highlighting just how important influencers are in the marketing industry!