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The concept of a brand hiring a popular personality to promote a product or service isn’t new, and brands know that celebrity endorsements can sell products. In the age of social media, however, brands are finding new ways to leverage popular figures as brand ambassadors, and these people aren’t necessarily famous actors, singers, or athletes.
While brands certainly continue to tap celebrities for endorsement deals, they’re also starting to enlist social media personalities, broadly known as “influencers,” for advertising campaigns. Social influencers generally focus on specific content areas — like fashion, beauty, parenting, or gaming — and cater their content to a specific vertical.
In this report, BI Intelligence, Business Insider’s premium research service, identifies the ways brands can find and manage relationships with social media influencers. We note the most engaging industry verticals, the pitfalls to avoid, and the opportunities to cash-in on. Finally, we explore how major social platforms are increasingly building out tools that enable their most popular users to build their personal brands.
Here are some of the key takeaways from the report:
- Influencer marketing ad spend is poised to reach between $ 5 billion and $ 10 billion in 2022. Taking the midpoint of $ 7.5 billion as a base case, this represents a five-year compound annual growth rate (CAGR) of 38%.
- Brands need to fine-balance providing influencers with enough creative freedom, while also ensuring the messaging positively reflects the brand. Nearly 40% of influencers believe that overly restrictive content guidelines are one of the biggest mistakes brands and agencies make when working with them.
- Influencers tend to have higher user engagement than content generated by brands. The average influencer engagement rate across industry verticals is 5.7%. As a comparison, the average engagement rate for brands on Instagram has fluctuated between 2-3% in the past year.
- Authenticity is key for influencer marketing messaging. Brands should give influencers sufficient creative freedom to keep posts authentic, as it makes posts less likely to be dismissed by users. Other best practices include repurposing influencer content for multiple platforms, evaluating the audience and following of an influencer, and leveraging data to optimize future campaigns.
In full, the report:
- Outlines recent steps the top social platforms are taking for influencer posts.
- Details the best practices brands should adopt when starting out with influencer marketing.
- Discusses the top verticals that are poised to benefit the most from influencer marketing, and which ones are growing.
- Highlights the factors that will be critical for compliance with social platforms and the FTC.
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