The concept of word-of-mouth advertising is hardly novel. However, the influencer marketing industry, a modernized version of this age-old tactic, has become increasingly popular in recent years.
A profound shift has been noted in the marketing budgets of most brands as well. This shift has seen over 75% of brands allot a designated portion of their budget exclusively for influencer marketing.
This trend isn’t limited to newer, smaller companies, either–major players in the industry are also jumping on the influencer bandwagon.
The industry has experienced a substantial uptick from 2016, with the market growing from $1.6 billion to a staggering $21.1 billion globally this year, according to recent Statista research.
With a majority of B2C businesses now allocating dedicated funds towards influencer marketing, these figures illuminate an intriguing and quickly evolving environment for B2C businesses.
Reaping the Marketing Bounty: Growth and ROI in Influencer Marketing
Does investment in influencer marketing truly yield fruitful returns? A study conducted by Harvard Business Review provides an affirmative answer to this question. The research reveals that a marginal increase of 1% in influencer marketing expenditure could result in an engagement uptick of 0.46%.
Indicating that the strategy can indeed deliver positive returns on investment, the study also pointed out that a considerable value remains untapped, as the average firm could elevate their engagement by 16.6% by merely optimizing their influencer marketing budget allocation.
There are many compelling reasons for the growing popularity of influencer marketing among B2C businesses. Firstly, influencer marketing opens the door to a vast audience, previously inaccessible to businesses. By partnering with influencers, brands are leveraging the influencers’ established audience base, reaching out to more people than they could independently.
The trust factor also plays a significant role in the success of influencer marketing. When a favorite influencer endorses a brand, the audience, which already has faith in the influencer, is likely to trust the brand as well.
Lastly, influencers can contribute to the creation of more pertinent content that prompts sharing, commenting, and linking by followers.
Influencer marketing is also a formidable tool for bolstering search engine optimization (SEO). When influencers provide links to a website, it’s considered a vote of confidence by search engines like Google, enhancing organic search results.
Survey Says: B2C Businesses are Buying In
A survey by Meltwater brought to light that 71% of B2C businesses plan on integrating influencer marketing into their strategies in 2023. This shows a growing recognition of the benefits that influencer collaborations offer–increased visibility, audience trust, and potential sales. Thus, influencer marketing is swiftly becoming the new norm for B2C businesses.
To unlock the potential of influencer marketing, B2C businesses must first identify their target audience and choose influencers whose values align with theirs.
A good reputation, a large, engaged following, and interest in collaborating with the brand are key factors that B2C businesses must consider, as a large following doesn’t necessarily equate to program success. Smaller, more engaged audiences may lead to better results.
While the choice of the right influencer is critical, the form of compensation offered by brands also plays a role in the success of such collaborations
The exchange of free products for promotion is a common practice in influencer marketing. Brands often incentivize influencers by offering their products in lieu of payment.
However, Statista’s research shows that influencers’ acceptance of such payment is not assured, with 17% declining such offers outright. Meanwhile, 54% would consider accepting free products if their value is high, and 29% would do so if they genuinely love the brand.
Influencer marketing, which was once an experimental marketing tactic, has now become a staple for B2C businesses. With over 70% of B2C businesses slated to invest in influencer marketing in 2023, the trend is expected to continue.
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