With more than one billion active users per month, Instagram is a powerful channel for encouraging consumers to take action and make purchases instantly.
Influencer marketing, as a mainstream marketing tool, involves brands paying, or giving free products and services to Instagrammers and other social media leaders in exchange for promotion in a seemingly natural way.
As such, the industry has seen influencer marketing become a booming business with companies now allocating more advertising spend to influencer marketing than traditional mediums such as print or television. With the COVID-19 outbreak seeing more people staying home, this has only increased as audiences consume more content than ever.
Are these trend-setting accounts valuable from an advertising perspective?
Trust is now an increasing issue in the digital world and finding the best influencers for a campaign remains a struggle as the rise of fake profiles, bots and buying likes has brought reputations into question.
There’s now a common perception that influencers are ‘entitled individuals’ who achieve their status through promoting products they have either received for free or for selfies on Instagram. As a result, marketers have seen stereotypical influencer content driving consumers away.
According to Mediakix, the number one concern when it comes to influencer marketing is engaging with profiles that have been built on fake followers, as endorsements with fake influencers will fail to deliver a meaningful return on investment for businesses and brands.
The number of influencers online is reaching a level of saturation that is making it difficult for even the most successful influencers to achieve cut-through, and brands are likely to see diminishing returns as a result.
A recent article by Forbes suggests the transition is already occurring with pandemic budget cuts. Fewer brands are working with influencers now compared to last year and consumers are already seeing fewer sponsored posts.
Is lack of regulation in Australia encouraging undisclosed sponsored posts?
With little regulation of the Australian influencer market, there are arguments that today’s consumers can’t tell the difference between genuine recommendations and masked sponsored posts.
The Australian Influencer Marketing Council (AIMCO), established in late 2019, provides marketers and creators with guidelines on the legal and recommended procedures behind influencer campaigns. This code of practice covers influencer selection and qualification, advertising disclosure, and recommended metric disclosures to build trust and transparency in online advertising.
A spokesperson for the Australian Competition and Consumer Commission (ACCC) said influencers have the same obligations under consumer law as any other form of advertising or marketing. In 2018, the maximum penalty for breaching the Australian consumer law substantially increased to $500,000 for each post from an influencer while it increased to $10 million for a business.
According to Business Insider, no Australian influencer to date has been sanctioned or faced a penalty from the ACCC for not marking their posts as sponsored.
Could micro-influencers be the answer?
Marketers, now more than ever, are considering the relevance and engagement of subscribers rather than the vanity metrics of a number of followers and likes across social platforms. With Instagram removing likes, engagement is fast becoming the new impressions and quality content that is real and unstaged is becoming the key to successful marketing campaigns.
This paves the way for micro-influencers who are everyday people with a particular passion or niche and are often perceived as more genuine and trustworthy. These users likely have anywhere between 1,000 and 100,000 followers and offer the perfect combination of intimate engagement and broad reach.
What makes this humble group of influencers attractive is that they likely already have a love for your products and services so will speak about them with authentic excitement and genuinely feel their followers should know about them. Ultimately the result from their followers is a legitimate interest.
Using micro-influencers will also enable businesses to stretch their marketing budget further. Instead of investing all spend in one social influencer with more than 500,000 followers and getting one or two posts which perform well, businesses could invest in anywhere from a dozen to hundreds of micro-influencers and see their products and services reach a larger and more targeted audience that will deliver higher engagement across a variety of audiences.
As social media users continue to build their personal reputations online, it’s important for brands to look for ways to build meaningful communities around smaller audiences and engage with people who already have an affinity for your brand.