In recent years, social media influencers have become a major force in marketing and popular culture. Companies have invested huge sums to partner with influencers and leverage their follower bases to promote products and services. However, there are signs that the influencer marketing bubble may be about to burst.
What is an influencer?
An influencer is someone who has built a reputation and audience around a specific niche or industry on social media platforms like Instagram, YouTube, TikTok etc. They have a large following of engaged fans who pay attention to their opinions, recommendations and lifestyle. Influencers often get paid by brands to promote and endorse their products and services.
How did influencer marketing become so big?
Influencer marketing took off around 2010 when platforms like Instagram gained mainstream popularity. Brands realized they could tap into the follower networks of popular social media personalities to reach consumers in an authentic way. The industry grew rapidly throughout the 2010s. According to a report by Mediakix, the influencer marketing industry was worth $5-10 billion by 2020.
What are the benefits of influencer marketing?
There are several reasons why brands invested heavily in influencer campaigns:
- Influencers are seen as more authentic and trustworthy than traditional ads.
- Dedicated followings allow targeted marketing to specific demographics.
- Aspirational quality of influencers connects brands to lifestyle trends.
- User-generated content is more engaging and interactive.
- Relatively low cost compared to traditional celebrity endorsements.
For a time, it seemed collaborating with influencers was a magic formula for sales and brand awareness. But cracks are starting to show in the influencer economy.
Is influencer marketing headed for a crash?
Despite its rapid growth, there are signs that influencer marketing may be facing a downfall:
Market saturation
When influencer marketing first emerged, partnering with a top social media personality was a novel tactic that garnered attention. Now, there is an oversaturation of influencer campaigns. Followers are being bombarded with #ads and #sponsorships from influencers, diminishing their impact.
Declining engagement
In a bid to earn more money, many influencers have focused on expanding their follower counts. However, this growth has come at the expense of engagement. According to analytics platforms, average engagement rates on sponsored influencer posts have fallen from 4% in 2016 to just 2.4% in 2019. Lower engagement makes influencer posts less valuable.
Influencer fraud
As influencer marketing has ballooned into a multi-billion dollar industry, problems with fraud have emerged. Some influencers use bots, fake followers and shady practices to inflate their numbers and earn more money from brands. A 2019 study by Points North Group estimated that up to 15% of influencers have bought fake followers, undermining the authenticity influencer marketing was built on.
Lack of transparency
While regulations have improved, many influencer partnerships still lack transparency. It’s not always clear when posts are paid endorsements rather than organic recommendations. 72% of consumers want better disclosure from influencers on sponsorships. Lack of transparency leads to distrust.
Rising production costs
As competition has increased, brands are spending more on extravagant influencer campaigns to stand out. Lavish events and productions have caused costs to balloon. Yet it’s unclear if these over-the-top tactics are driving ROI. With economic uncertainty, brands will likely cut back on these expensive campaigns.
Are influencers themselves getting tired of social media?
Problems with declining engagement hint that even influencers themselves are getting tired of the platforms and aesthetic they helped popularize. The pressure of constantly creating content, chasing trends and pleasing algorithms for years has burned out many top influencers.
Some of the biggest names in the influencer space have announced hiatuses or even full departures:
PewDiePie
In December 2019, Felix Kjellberg (better known by his YouTube handle PewDiePie) announced a break from the platform that helped make him a star. With over 100 million subscribers, he is the most followed individual creator on YouTube. His exit hints at a shifting zeitgeist.
The Fat Jewish
Josh Ostrovsky (@thefatjewish) amassed over 12 million Instagram followers through his early comedy account. But in summer 2020, he expressed fatigue over creating content, saying: “None of this is interesting to me anymore.” He now focuses on other projects.
Emma Chamberlain
The Gen Z influencer grew one of the quickest followings ever, hitting 10 million YouTube subscribers by age 18. But in 2022, she announced an extended break from the public eye for her mental health after feeling “burnt out” at just 21.
These major departures from key influencers suggest the very people that made social media popular are tiring of the machine they helped build. That’s not a good sign for the industry.
Will influencer marketing completely go away?
Despite its flaws, influencer marketing still offers value to brands when done right. In the aftermath of a potential “influencer bubble”, the industry will likely stick around – but in an evolved form.
The rise of micro-influencers
Rather than celebrities with millions of followers, brands may shift focus to nano and micro-influencers with smaller but much more engaged, targeted audiences in the tens of thousands. The cost is lower and engagement is higher.
Focus on genuine connections
Successful future partnerships will hinge on brands building genuine connections and relationships with influencers over time rather than one-off paid posts. The goal is authentic co-creation that adds value rather than simply pays for ads.
Stricter regulations
Tighter rules around disclosing paid endorsements, vetting fake followers, and monitoring engagement metrics will help address some of the industry’s problems. This will ensure transparency and accuracy.
The rise of virtual influencers
Some brands are experimenting with influencers that are entirely computer-generated. While not authentic humans, virtual influencers like Lil Miquela can provide innovative opportunities for brands untethered to the limits of actual people.
TikTok takes over
Instagram has been the platform of choice for influencer marketing. But TikTok’s meteoric rise as the social media app of Gen Z could allow influencer marketing to refresh itself among a new generation. Authenticity and creativity reign supreme on TikTok over glamorous aesthetics.
Key Takeaways
- Influencer marketing has seen immense growth but is now facing disruption as problems like fraud, lack of transparency and declining engagement emerge.
- Mainstay influencers are departing these spaces, potentially indicating a shift in zeitgeist and consumer interests away from highly curated social media.
- While an outright influencer crash seems unlikely, major changes will have to occur for the industry to recover. Evolution may arrive via micro-influencers, stricter regulations, virtual personas, and platforms like TikTok.
- When done ethically, with genuine connections driving creative co-creation, influencer marketing still offers immense value. But the paradigm will likely shift as problems are addressed.
Conclusion
Influencer marketing appeared poised to take over the digital world only a few years ago. But the landscape is shifting quickly. Like any novel tactic, it went through a period of explosive hype before problems emerged to spur necessary corrections. While influencer marketing will likely survive in some form given the audience reach it provides, the days of simply throwing money at influencers for quick campaigns with questionable results appear numbered. Authenticity, transparency and innovation will determine what emerges on the other side as brands, regulators and influencers themselves reconcile how to evolve amidst a changing landscape. One thing is for certain in the fickle world of social media – change is the only constant.