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What is Influencer Marketing?

December 9, 2022
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Influencer marketing has unequivocally proved it isn’t just a passing trend. 

The marketing tactic—a collaboration between a company and an influencer to boost brand awareness and sell a product or service—has skyrocketed in popularity. By 2025, it’s projected to expand to a $24.1 billion industry.1

As consumers increasingly turn to influencers to make their purchasing decisions, even a cursory glimpse at our social media feeds reveals an influencer marketing strategy’s range and power. But just because influencer marketing seems to be everywhere doesn’t make it easy to keep a handle on how it works, and how it’s changing.

For that, we offer this blueprint for understanding influencer marketing as it exists today. Let’s unpack how the tactic works in practice and what to know before you add it to your marketing game plan.

The basics of influencer marketing

What is influencer marketing exactly? Think of influencer marketing as word-of-mouth recommendations on steroids: Essentially, an individual (or team) with clout endorses a business and the products, services or experiences they offer. 

In the digital age, influencer marketing first made it big in blogging. Today, it’s predominantly used on the most titanic social media sites, including: 

An Influencer marketing strategy has untold benefits to offer brands who haven’t gotten in the game yet (we’ll get to those momentarily). But perhaps one of its most appealing advantages is that it humanizes brands and facilitates company-consumer trust branded content marketing strategies through real people.

Remember, nearly half of all consumers today take their purchase cues and recommendations from influencers.2 Companies ranging from Alo Yoga to local independent restaurants rely on influencers to foster visibility, reach their target audience and drive sales.

influencer marketing agency

What are influencers?

Influencers are the center of a successful influencer marketing strategy. We might all want Prince Harry to give our business a grand royal endorsement, but influencers arrive with a range of reaches, audience segments and personal flavors of content. 

And while traditional celebrities are natural mega-influencers, there are many instances where even those who lack fame through traditional channels still hold sway online—sometimes, even more than those with a multi-million following. 

These could be:

  • Fitness professionals
  • Photographers
  • Foodies
  • Travel vloggers
  • Social media personalities
  • Bloggers
  • Authorities (dermatologists are massive on TikTok)

In other words, influencers are often ordinary people whose social media presence has the potential to impact purchasing decisions.

The influencer ecosystem: 4 different types to know

From social media influencer to content creator and blogger, there are different types of influencers. These Influencers are further broken down into four categories:

  • Nano-influencers – These have a following in the 1K to 10K range. Their reach may seem limited but they’re typically super-engaged with their audience. (Consider it more of a boutique experience.) Nano influencers can be a terrific option for retailers working in a hyper-specific niche and local businesses.
  • Micro-influencers – The next step up, these tastemakers have followings between 10K and 100K. They too are generally known for nourishing close relationships with their followers and are chosen for their relatability and authority in their field.
  • Macro-influencers – This set has followings between 100K and one million (though some agencies cut off this number at 300K).3 Usually, these are individuals who have carved out a name for themselves on platforms like TikTok, YouTube and other social media sites—the Jeanuiseats and FashionJacksons of the bunch. They might be specialized in a single area, like food, or be popular for simply being themselves.
  • Mega-influencers – These are the celebrity influencers, like Kim K. Their followings are astronomical, sometimes in the tens of millions. It goes without saying that mega influencers can fuel brand awareness, but people generally follow them because they’re famous—not because they’re looking for product recommendations. Indeed, 70% of teens trust non-celebrity influencers more.2

For brands, each type of influencer has its pros and cons. Different influencer tiers come at different costs, degrees of management and creative collaboration.

How much does influencer marketing cost?

The cost of an influencer marketing campaign is contingent upon factors like:3

  • The tier of potential influencer (i.e. nano- vs. mega-influencers)
  • The scope of your influencer marketing campaign
  • The social media platform(s) you elect to use (Instagram, YouTube, TikTok and so forth)
  • The degree of the influencer’s expertise
  • The kind of content your influencer campaign uses (e.g. TikTok videos, Instagram reels, photos, etc.)

Some influencers agree to a barter partnership—meaning, partners are compensated with a brand’s services and products. Others are paid on commission. Normally, though, influencers are financially compensated for their time, effort and reputation.

So, how much does an influencer marketing partnership cost exactly?

Because so many variables are involved, the cost of influencer marketing can vary dramatically:4

  • I​​f your potential influencer uses Instagram, for example, a single Instagram marketing post may cost anywhere from $10 to $100 with a nano-influencer. With a macro-influencer, it could be between $5,000 to $10,000.
  • Youtube influencers tend to be compensated more. Nano-influencers typically make between $20 and $2,000 for videos; a macro-influencer could earn up to $20,000.
  • Compensation averages for TikTok are still in flux, ranging from nano-influencers’ $5 per video to $2,500 for mega-influencers.

It can be challenging to determine how much to pay influencers, and how much of your marketing budget should be allocated to influencer marketing. Partnering with a digital and influencer marketing agency can help you calculate a fair exchange between you and your influential collaborators.

What are the benefits of influencer marketing?

Some influencer marketing relationships may come with a hefty price tag, but they also have the potential to reap significant ROI. 

But the benefits aren’t just financial. Here are just a handful of influencer marketing’s long-term advantages for brands:

  • It can cement your legitimacy as a brand—especially if you’re just getting started
  • It can create a more trusting, authentic relationship with your target customers
  • It promotes an engaged customer base
  • It helps you find new customers
  • It lets you learn more about what your target audience wants
  • It boosts your brand’s scalability

In this day and age, the questions brands have to ask themselves isn’t if influencer marketing is effective, but rather how they’re going to make those partnerships happen.

How to get influencers to promote your product

When a brand and a social influencer enter into contract, it raises the stakes for both parties. Influencers want to put their face behind brands that merit consumer trust. Likewise, companies want their products promoted by influencers with strong bonds with their audience.

To that end, there are some important things to consider before deciding how to approach an influencer partnership:

  • Consider who will resonate with your target audience – Your target audience should dictate the influencers you work with. Who do they follow and engage with on a regular basis? What type of influencer will give more value to your product by association?
  • Consider medium – There are multi-hyphenate influencers who operate across platforms, but different channels can work to benefit different brands. An ASMR YouTuber could be a perfect match for an up-and-coming meditation app, while a TikTok MD could help rep a pharm-to-door medication delivery service.
  • Prioritize engagement—not follower count Social media engagement can have a significant impact on your strategy. A macro influencer might seem like a natural way to heighten visibility. But if they don’t engage with their followers that can be money down the drain for brands (to say nothing, of course, of the persistent problem of fake followers). Zero in on influencers who have a loyal base and actively, consistently engage with them.
  • Align influencers with your values – An influencer who posts consistently about body positivity will be keener to partner with a brand that does the same. Be clear about your objectives and why you have specifically chosen them as a brand ambassador. Likewise, it’s important to investigate other partnerships they’ve set in motion to ensure there’s no conflict between what you represent as companies.
  • Host an influencers event – An influencers event lets you communicate directly with multiple prospective collaborators at once. This is your time to identify who represents your core values and why a partnership with you is more valuable than a partnership with your competitors. This might result in some pivotal connections that could support your business in the long term.
  • Work with a connector agency – Influencer marketing can be lucrative, but locating the ideal influencers and managing partnerships requires both expertise and effort. It’s also an ever changing strategy that requires attention. iInfluencer marketing in the future may work and look different compared to now. A digital marketing partner that has its own Tiktok agency or social media management team can help you at every point in the process, from identifying the most promising opportunities to managing the content influencers use to promote your brand. A digital marketing agency worth its salt will have a team of trusted influencers to work hand in glove with brands, whether they’re a household name or an up-and-comer.

Get more out of influencer marketing with Power Digital

Influencer marketing is a must for brands who want to expand their presence, reach their target audiences and make good on their ROI. But you don’t need to have a personal relationship with the likes of Gwyneth Paltrow to advance consumer trust in your company.

At Power Digital, we connect brands with thousands of influencers across sectors, specialties and audience segments. Our data-focused approach uses NOVA analytics to evaluate your marketing needs, unite you with your ideal partners and execute a digital strategy (while taking care of your partnerships’ fine print).

Ready to get started? Reach out to us today to hit your next stride in growth.

 

Sources: 

  1. Globe News Wire. Global influencer marketing platform industry report. https://www.globenewswire.com/news-release/2021/01/04/2152794/0/en/Global-Influencer-Marketing-Platform-Industry-Report-2020-2025-Focus-on-Search-Discovery-Campaign-Management-Influencer-Relationship-Management-Analytics-Reporting.html
  2. Digitial Marketing Institute. 20 surprising influencer marketing statistics.  https://digitalmarketinginstitute.com/blog/20-influencer-marketing-statistics-that-will-surprise-you
  3. Forbes. How much do influencers cost? Here’s how to calculate costs for your next campaign. https://www.forbes.com/sites/forbesagencycouncil/2021/10/21/how-much-do-influencers-cost-heres-how-to-calculate-costs-for-your-next-campaign/?sh=22aa3817b8f1
  4. Influencer Marketing Hub. Influencer Rates: How Much do Influencers Really Cost in 2022?  https://influencermarketinghub.com/influencer-rates/
  5. Forbes. History of influencer marketing predates social media by centuries–but is there enough transparency in the 21st century?  https://www.forbes.com/sites/petersuciu/2020/12/07/history-of-influencer-marketing-predates-social-media-by-centuries–but-is-there-enough-transparency-in-the-21st-century/?sh=122a902a40d7

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