The Evolution of Advertising via Influencers

Clearly the (digital) future of advertising will be dominated by Facebook and Google. In terms of social media platforms, Facebook owns four of the top ten apps, the most visited being Facebook itself and Instagram. Google/Alphabet owns YouTube. $31 billion has moved from traditional media to digital media since 2006. Of that amount, 70% has been spent on Facebook companies and Google paid search. This is where “the eyeballs ARE” in 2018 and beyond.

The most famous social network sites worldwide as of October 2018, ranked by number of active users (in millions)

Because of the massive reach of these platforms, Influencer marketing has become mainstream. Seventy-four percent of consumers today trust social media to guide them through purchase decisions. But it is not clear that many “influencers” are really acting as “manufacturers rep’s” by omitting or disguising their ties to brands. That would be illegal in traditional advertising. With Federal Trade Commission (FTC) involvement growing, full disclosure is inevitable. It is already required in Europe and in many progressive companies in the United States where it typically takes ten years for Congress to act on such initiatives. By that time the whole game will have changed in the fast-moving digital world.

In terms of beauty search, Amazon is the leader with some 71% of beauty search originating in the Amazon platform. Even if consumers never intend to buy from Amazon, they place a high value on Amazon’s price transparency and reviews by “users” (who are often undisclosed Influencers too.)

For the moment, there is still BIG MONEY in Influencing.  AdWeek Magazing estimates that this $1 Billion Industry will grow to $10 Billion by the end of the century in the CBS News feature link below.

The rule of thumb in beauty and fashion is that an Influencer with 100,000 followers (Macro category) can make about $100,000 per year by posting “paid content” for sponsors. Click through this link for attribution and real life examples.

Mega-influencers (usually celebrities) make MUCH more (think Beyonce &  Kardashians.)

In professional beauty, the Influencers are typically on the lower end of this follower spectrum in a new category called “Nano-influencers” (fewer than 5000 followers.) However, they are subject matter experts on specific styling and coloring techniques and highly relevant to their technical audience.

Advertising is no longer a spectator sport; Players at all skill levels and community sizes are welcome to take the field.

While their reach is smaller, the relevance and engagement with their communities is much higher than that of celebrities. In fact, this is typically an inverse relationship; the higher the number of followers the lower the percentage of “engaged followers.”

Celebrities are great for general brand awareness but poor for any instructional value or emotional connection. Nano influencers are great for education teases and creative inspiration and “relatable” attainment.

At the end of the day, Influencer marketing is really just the latest form of “native advertising.”

This is the idea of making advertising blend in with the style of the news media. It goes back to 1901 when political propaganda was mixed in as a news story.

Native advertising matches the form and function of the platform upon which it appears. In many cases, it manifests as either an article or video, produced by an advertiser with the specific intent to promote a product, while matching the normal form and style which would of the platform’s editorial staff. The word “native” refers to this coherence of the content with the other media that appears on the platform. It has been around for a long time i.e. this un-labelled advertorial from1901.

This 1901 advertisement for patent medicine begins by looking like an editorial on political developments in China.

This has evolved over the years into advertorial websites, (BuzzFeed) shopping channels (HSN) and direct response infomercials. They are disguised in the medium where they appear until new regulations demand disclosure.

Other contemporary formats for native advertising now include user reviews, promoted videos, images, articles, commentary, music, search advertising, (when ads appear alongside search results, Twitter‘s promoted TweetsFacebook‘s promoted stories, and Tumblr‘s promoted posts which might appear as “you might be interested in product x” alongside legitimate editorial recommendations.

Just this week Gwyneth Paltrow is talking about “contextual commerce” in the Wall Street Journal with reference to her Goop lifestyle magazine and website. She says “this is when potential customers are flooded with newsletters, blog posts, print magazines, conferences, events, podcasts and Instagram ads where Goop products are surrounded our (GP Lifestyle) content.”

In this dizzying barrage of messaging, manufacturers must ask themselves, is a company website even relevant anymore? Should they be re-purposed as content libraries to serve other mediums? Would anybody really go to a brand-sponsored salon locator? Is it easier just to buy the first listing on Google or Google-maps? Responding to ”salons near me searches?” Would consumers rather get product knowledge and testimonials on Amazon? All of these traditional “costs of doing business” need careful consideration before investing (or re-investing) in platforms and brand loyalty programs where the eyeballs ARE NOT.

Go where the eyeballs already ARE!

To read more about the ongoing digital transformation of the beauty industry, connect with me on LinkedIn and follow this series of 6 different articles over the coming months.