With the rise of social media video apps like TikTok and Instagram's reels, influencer marketing is at its most popular ever. We take a look at why FMCG brands will spend big on Influencer Marketing in 2021.
Influencer marketing has gone from a trendy buzzword to an institution in just a few years. As with many trends which originate online, many of us are more familiar with the phrase than its definition, so let’s begin with a short look at what influencer marketing actually is. Influencers are generally defined as experts, stars, and other aspirational figures who can inspire us to purchase products based on our pre-existing relationships with them. It’s easy to conclude that influencer marketing is simply a traditional celebrity endorsement on an online platform, but such a conclusion ignores the feature which makes this form of advertising uniquely effective.
Influencers have closer and more meaningful relationships with their audiences than traditional celebrities. They might be the first thing a consumer sees when they wake up in the morning, or a trusted expert who gives reliable advice on cooking, gardening, or professional matters. While trends shift quickly, especially among Instagram fashion influencers, young people are much more responsive to social campaigns based on influencers than traditional marketing methods.
Influencer marketing is also being propelled by the change in how young people consume media. Rather than TV networks or newspapers, millennials and Gen Zs are far more likely to engage with TikTok, Snapchat, or another form of social media. Using influencers is a way to penetrate the phone-centric world of the next generation of shoppers. Marketing experts have predicted that the influencer industry will be worth $15 billion by the end of 2022, and we expect its growth to continue unabated as the decade wears on. While FMCG has been slower to catch on than other industries, 2021 is likely to be the year the grocery industry jumps on board the bandwagon.
A recent survey from Kroll found that many FMCG brands were reporting negative experiences with influencers. A quarter of the companies they queried reported that they suffered losses of between $100,000 and $250,000 due to negative interactions with social media influencers, while 85% of FMCG companies reported that their brands had been hurt by negative relationships with influencers. While many aspiring influencers attempt to use fake followers to secure a contract that they can’t possibly live up to, the dangers of influencer marketing can be even more damaging.
An influencer who is dishonest, accused of serious crimes, or one with controversial, hateful, or socially repugnant views can undo years of careful and meticulous brand-building. As Benedict Hamilton, Kroll’s director of Business Intelligence and Investigations states, “Companies spend years creating brands built on trust and loyalty, characteristics which are hard-won but can be quickly lost, and are difficult to regain. When a negative incident with an influencer occurs, the reputational damage that follows can have long-term commercial impacts.”
Yet in spite of the dangers of investing in influencers, the vast majority of FMCG brands are planning to ramp up their investment in this form of marketing. 46% of respondents to the Kroll survey said that they would spend between 31-50% of their budgets on influencers, a sharp increase over the 2020 figure, and nearly 1 in 10 said that they’d lay out 70% or more of their marketing budget on influencer driven campaigns.
Why is influencer marketing experiencing such rapid growth in spite of serious concerns over the risks inherent in the strategy? One reason is surely the pandemic, which has pushed all of us to spend more time on our devices, while also fuelling the rapid growth of eCommerce in the FMCG sector. But Michael Weaver, a Managing Director at Duff & Phelps, doesn’t see the trend towards influencers as a COVID-19 related flash in the pan: “We can’t deny that the lockdown and subsequent restriction measures have played a part in boosting the industry. But regardless, we don’t expect influencer marketing to slow down post-COVID-19 either.”
Phelps goes on to describe why this form of marketing is quickly taking over the industry. He notes that the strategy of finding an extremely famous, expensive celebrity to make your pitch for you has become “increasingly obsolete in the digital age” while influencers offer a much stronger return on investment. Currently, 32% of UK companies who employ influencers are using third party security firms to verify the follower counts, and research the backgrounds of the influencers they are building relationships with, according to The Drum. This can take a lot of the guesswork and risk out of the process of finding the right partners, and it likely accounts for the reason that a majority of UK brands reported that they trust their influencers.
In 2020, many brands have begun to employ “microinfluencers”, people with smaller or more local followings than the reality TV stars and famous names we associate with the trend. These microinfluencers are good for business because they’ll often accept compensation based on actual results, meaning that you can pay a commission based fee rather than breaking the bank to sign up The Rock. The more intimate and local nature of their relationships with followers will also lend a greater degree of trust to their pronouncements, and increase your engagement with the public. For smaller brands seeking to carve out a slice of the FMCG pie, microinfluencers could be a godsend.
If you’re looking to put influencer marketing to work for your brand, one thing you absolutely need to do is build the capability to access real-time sales data. Before you invest heavily in the strategy, or any particular influencer, you’ll need to see tangible evidence that they can drive sales, so finding an eCommerce platform that lets you under the hood is essential. You’ll want to be very specific with the messaging and demographics you’d like to reach, so data should guide your entry into the field. We’d also strongly recommend you thoroughly examine the background of anyone before considering a partnership with your brand. A toxic tweet or criminal history could ruin the trust and goodwill you’ve worked so hard to build. If you’re looking to modernize your marketing approach, get in touch with Adimo, and put our cutting edge eCommerce technology to work today!