Nearly 65 percent of marketers now measure the return on investment (ROI) from influencer campaigns, with conversions and sales as their top measures, according to a survey conducted by Influencer Marketing Hub and CreatorIQ.
The “Influencer Marketing Benchmark Report 2020” found that more than 380 new influencer marketing-focused agencies and platforms were established last year, with a total of 1,120 open in 2019, compared to just 190 in 2015. With an increase of at least 50 percent each year since 2016, when the industry was worth $1.7 billion, the industry will reach $9.7 billion in 2020. Searches for “influencer marketing” on Google also continue to grow, rising to 70,000 in 2019, up 9,000 from 2018.
Most (91 percent) of respondents said they believe influencer marketing is an effective form of marketing and 79 percent are dedicating a budget to influencer marketing in 2020. Among those respondents, 65 percent intend to increase their budget over the next 12 months. Thirty-nine percent of respondents plan to spend 10-20 percent of their budget on influencer marketing while 23 percent will allocate 20-30 percent of their total budget on influencer campaigns. Nine percent intend on spending over 40 percent of their budget on influencers.
How much brands are willing to spend on influencers varies as 43 percent said they spend less than $10,000 annually while 29 percent spend between $10,000-$50,000. Eleven percent spend $50,000-$100,000, 10 percent spend $100,000-$500,000 and five percent spend more than $500,000.
The most common measure of influencer marketing success is now conversions and sales, as noted by 39 percent of respondents. Thirty-four percent focus on engagement or clicks followed by 27 percent who focus on views, reach and impressions.
The average earned media value (EMV) per dollar spent on influencer marketing increased in 2019 and more brands (77 percent) now favor the measure. Businesses that have a grasp on influencer marketing gained up to $18 in EMV for every dollar spent on influencers while average firms saw an EMV of $5.78 per dollar they spent on influencer marketing.
The research shows there’s a clear move from mega-influencers to micro- and nano-influencers as these small but mighty players have higher engagement rates than influencers with big followings—particularly on Instagram, where nano-influencers have seven times the engagement rate than mega-influencers.
Additionally, although Twitter has overall lower levels of engagement, Twitter nano-influencers have 1.4 percent engagement compared to mega-influencers, who only have a 0.3 percent engagement rate. The same pattern is evident on TikTok—users with small audiences have 9.38 percent engagement while ones with large audiences see just 5.3 percent engagement.
The proof is also in the budget brands are dedicating to micro-influencers—respondents spent 47 percent of their influencer budget on micro-influencers, compared to 23 percent for celebrity influencers.
When evaluating influencers, 41 percent of respondents rated engagement or clicks as being the most important criterion and 53 percent see great value in working with influencers who have a real influence on their audience.
Now more than 90 percent of all influencer campaigns include Instagram and 84 percent of creators have upped the amount of content they produced in 2019. As influencer marketing efforts get bigger and better, marketers must give influencers clear guidelines on how to disclose endorsements. The survey analyzed 4,200 posts on fashion micro-influencer accounts for a month and found that only 14 percent of posts were fully FTC- and CMA-compliant, compared to 11 percent last year. With more content also comes more influencer fraud as 68 percent of respondents said they’ve experienced influencer fraud, up from 63 percent last year.
Instagram is included in the majority of influencer campaigns, followed by Twitter at 45 percent, Facebook at 40 percent, YouTube at 20 percent and Pinterest at 10 percent.
The findings are based on answers from 4,000 marketing agencies, brands and other industry professionals, 70 percent of which were business-to-consumer (B2C) brands and the remaining business-to-business (B2B). Nearly half of respondents are based in the US, 16 percent in Europe, 12 percent in Asia, five percent in Africa and 15 percent representing the rest of the world. Fashion and beauty represented the most popular vertical (24 percent), followed by travel and lifestyle (13 percent) and health and fitness (12 percent).