More and more businesses are beginning to realize the power of social influencers over traditional advertising. In this article, I’ll present some interesting reports to convince you that you shouldn’t underestimate the value of influencer marketing.
1. Consumers trust recommendations from influencers
The impact of influencers on consumers’ purchase decisions can be clearly seen in research conducted by McKinsey. The research team examined 20,000 European consumers and their purchase decisions across 30 product areas from over 100 brands. They found that social recommendations resulted in an average of 26% of purchases across all 30 product categories.
Researchers also discovered that recommendations played a major role in influencing purchase decisions in all product categories. In fact, about two-thirds of the impact was made directly while the rest was indirect. The team also found that 45% of the social influence generated is made by 5% of the recommenders.
So, you can see that recommendations from influencers have a huge impact on whether or not people buy your products. An earlier study by Nielsen in 2012 concluded that 92% of consumers worldwide trust recommendations and word-of-mouth suggestions. These findings are proof that influencer marketing will continue positively impacting consumers’ purchase choices.
2. Social media is growing rapidly
The use of social media channels is growing at a rapid rate across various age groups. Since influencers mostly reach out to consumers through these networks, influencer marketing becomes a crucial addition to any successful marketing strategy. For instance, Instagram hit 400 million active users on a monthly basis in September 2015. Just think about the prospects of advertising your brands and products through influencers on this channel.
3. More and more people are blocking ads
The 2015 Ad Blocking Report published by Adobe and PageFair revealed some shocking data for Internet marketers. They found that over 198 million people actively use ad-blocking around the world. This means that global ad-blocking grew by 41% in just 12 months.
Specifically, ad-blocking in the U.S. grew by 48% to 45 million people. Ad-blocking in the U.K. grew by an alarming 82% with 12 million active users in the same time period.
So, what happens to all the investments you’ve made in pop-up ads if a majority of users are now blocking them? The report states that publishers lost almost $22 billion due to ad-blocking in 2015. If people are blocking ads, they clearly don’t trust this channel.
This means that it’s high time for Internet marketers to move on to other forms of marketing channels that customers trust. As previously mentioned, consumers trust influencers and recommendations from them. It’s advised you set aside more time and effort on networking with influencers for your business strategy.
4. It helps with overall performance
Deloitte reports that there’s a 37% higher retention rate for customers who have been referred by other customers. This means that you have a good chance of improving your retention rate when customers recommend you to their friends and family. An influencer could be any popular celebrity or industry expert who’s a loyal customer of your brand.
In addition to higher retention rates, influencer marketing promises improving overall business performance. The Tomoson study mentioned before showed that 51% of marketers believe influencers help them attract and retain better customers. Influencer marketing, along with email marketing, is deemed to be the most cost-effective channel for acquiring customers.
The Tomoson study found that for every $1 businesses spend on influencer marketing, they are making $6.50. The top 13% are the best-performing businesses who make $20 or more for an investment of $1. About 70% earn upwards of $2 for each dollar spent.
5. Your competitors are spending more on it
Another major reason you shouldn’t be ignoring the power of influencers is because nearly 60% of marketers plan to increase their influencer marketing budget in 2016. In a survey conducted by Tomoson, 59% of the 125 participating marketers said influencer marketing is so effective that they intend to spend more money on it.
It’s clear that you shouldn’t be underestimating how deeply influencers can influence consumers’ purchase decisions, especially so many of your fellow marketers are investing more in it. If your competitors are setting aside more money to market their brand and products through influencers, why not you?
Overall, these studies show that a growing number of marketers are using influencers to promote their brand image and products or services. They also reveal how a majority of marketers already using this marketing channel are finding it highly effective in terms of ROI, retention rate, and customer acquisition. Now, it’s about time you join the bandwagon and start setting aside more of your finances and efforts on influencer marketing.