January 20, 2018

Helping PR pros make smarter decisions

Influencer marketing remains strong, but 2018 could see challenges

Influencer marketing remains strong, but 2018 could see challenges

Influencer marketing is poised to have another solid year in 2018, according to a recent survey done by Linqia (which, it should be noted, is an influencer marketing platform). Survey respondents indicated that many were increasing budgets for influencer marketing (39 percent), and only five percent stated they would be reducing their influencer marketing budget.

Instagram and Facebook are the top social channels for influencer marketing according to the survey. With brands increasingly battling for consumer attention, primarily on social channels, influencer marketing is seen as a way of getting in front of target audiences.

Social media and influence

A recent study by the Institute for Public Relations (IPR) finds that social media influencer marketing does work. How well it works is dependent on a variety of factors, including the age of the target audience and the type of industry or business.

The IPR study looked at four industries (travel, financial, healthcare, and retail), and found that people across all age groups were willing to turn to social media for information and opinions on travel. Forty percent of those surveyed indicated their decision-making on travel-related questions was influenced by what others said on social media. The amount of reported influence was lower for the other business categories.

People continue to state that word-of-mouth, particularly from friends and family members, is the most effective means of influencing the purchase of a product or a service. This built-in trust extends to recommendations that these friends and family members make when they post opinions to social channels.

Influencer marketing in business channels

Although influencer marketing is primarily seen as brands working with celebrities or other high-profile figures to reach target audiences, its use is now reaching into more traditional lines of business too. A recent piece in Forbes describes how influencer marketing is being used to build confidence in businesses using blockchain platforms and cryptocurrencies. Building trust is seen as key to the success of these businesses, and influencer marketing is one way to establish confidence. One business highlighted in the article is taking a different approach to influencer marketing—instead of working with outside influencers to build confidence in the business, ShipChain is bringing influencers on board. This team of influencers bring credibility to the company.

It is the same influencer marketing principles, applied to attracting a different audience. Rather than trying to reach customers in the general public, they are trying to build confidence with investors and business customers.

Disclosure must be clear—and regulators are watching

Businesses are increasing influencer marketing budgets, and individuals state that opinions and recommendations posted to social channels impact their decisions. Even business-to-business companies are using a form of influencer marketing.

It looks like influencer marketing is on an upward trajectory, but there is one problem: regulators are cracking down on an apparent lack of disclosure. The Wall Street Journal detailed some of the problems with influencer marketing in a recent piece, focusing on the issue of inadequate or missing disclosure. In one instance, a celebrity had posted a thank-you to a luxury travel company in an Instagram post. She felt that a thank-you was a clear indication that the company had provided her with free travel services—but the Federal Trade Commission (FTC) disagreed.

Disclosure is legally required, but it can be tricky to nail down. In another example in the WSJ piece, a post on Instagram featured a celebrity holding a designer handbag at an event. It turned out that the handbag had been given to the celebrity, but with no request or expectation that it would be promoted—so is this not considered influencer marketing because there was no promotional agreement? Or is it an endorsement of a product to simply feature it prominently in a social media post?

The FTC appears to be taking a fairly expansive view of what constitutes an endorsement. Even adding a brand hashtag to a social media post might be considered an endorsement if the influencer has any kind of financial relationship with a brand.

As influencer marketing continues to grow, businesses should expect that regulatory attention on this activity will also increase. One place businesses should start is by reviewing the FTC’s publications on endorsements. The FTC also recently released a letter directed at online influencers detailing how prominent disclosures about existing relationships must be.

The quick take on the FTC’s message is that a brand cannot be too clear about disclosures. The more prominent the disclosure is, the better. Will prominent disclosures negatively affect the buying public to take an influencer’s recommendations? While we don’t know that answer to that question definitively, indications from IPR’s study show that it is unlikely—online influence in social media appears to be widely accepted.

Other potential challenges

The study by Linqua that was mentioned earlier in this piece uncovered other potential areas of concern for those engaged in influencer marketing. One major problem is the ways in which platforms are prioritizing paid and promoted content. For example, Facebook’s decision to prioritize paid content along with the reduction in organic reach means that marketing programs—including influencer marketing—will need to have a promoted content strategy in place to be effective.

Investing the time needed to run influencer programs is another area of concern, as is the ability to accurately measure the effectiveness of influencer marketing.

Despite these concerns, influencer marketing is poised to continue strong well into 2018. Smart marketers will keep an eye on these challenges, and make plans to address each in the coming year. Clear disclosure, paying careful attention to social platform algorithm changes, and figuring out ways to measure influencer program impacts will be the areas that define winning influencer outreach.

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About The Author

Jennifer Zingsheim Phillips is the founder of 4L Strategies, and has worked in communications and public affairs for just over 20 years. Her background includes work in politics, government, lobbying, public affairs PR work, content creation, and digital and social communications and media analysis.

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