Influencer Marketing: A growing sector with evolving challenges

Liselot Hudders, Ghent University, Belgium

Marketing is an industry that is as old as commerce itself; ever since someone had something to sell, marketing that product to potential buyers has been a powerful selling tool. The way we advertise and market is constantly changing, however. Influencer marketing is one of the most recent and most effective tools that has entered the marketer’s arsenal, finding its origins in electronic word-of-mouth. But the speed of adoption of the influencer marketing sector, as well as its market-disrupting abilities, has caused some changes to the industry as a whole – some positive and some negative [1]. The industry’s continued response to the growing importance and adoption of influencer marketing will be crucial over the next few years, especially considering wider and more open conversations about social media usage.

Who are they?

Influencers are modern day marketers who gain fame online by posting authentic, entertaining content and building expertise in a certain niche domain like fashion, food, gaming, luxury, travel, or parenting. They provide their followers with content in this domain, revealing intimate details of their personal life (e.g., their friends, family, interests, opinions, or habits) [2]. Our natural desire as humans for insight into the private lives of others (demonstrated by the sustained success of celebrity gossip magazines) is thus satisfied by the role of influencers. This influencer content is easily accessible by the continuous availability and excessive use of social media apps on people’s smartphones. In fact, Americans now check their phones 344 times per day – once every four minutes [3].

Influencers spend a lot of time building intimate relationships with their followers. They create the impression (often sincerely) that they care deeply about their followers’ opinions and feelings by asking them questions, responding to their comments, and revealing private details about their personal lives that one would usually only share with friends and family. Although this relationship can often feel like a friendship, it is largely one-sided as the follower knows the influencer much better than the reverse [4].

Nevertheless, this intimate relationship makes the influencer a trustworthy source of information, especially in the eyes of the follower; an influencer’s credibility is constantly at stake as they have often built expertise in their particular domain through years of reliable information [5]. It is unsurprising then, that influencers have become important allies for advertisers for their strong impact on followers’ consumption decisions. These ‘micro-celebrities’ have the gift of seamlessly integrating commercial content into editorial content, thereby increasing brand awareness, affecting brand attitudes and facilitating purchase behaviours [6].

The growth of influencer marketing

Influencer marketing started as a fragmented and non-integrated advertising strategy, in the early years being considered a nice-to-have, and mostly separated from the other elements in the marketing communication mix. Back then, influencers were motivated to include commercial content in their posts by being sent free products, being invited to brand events or being paid for one or more sponsored posts. These strategies are still used today but within much more strategic, long-term relationships, as influencers have become seen as an integral part of organisations’ marketing communications. In fact, some brands are now seeing success through the almost exclusive use of influencers to drive their marketing strategies.

The fitness apparel brand Gymshark owes much of its success and rapid expansion to their long-term collaborations with a limited number of successful fitness influencers, who all exclusively endorse Gymshark clothes on their social media to fitness fans who have a high interest in the product category. Rather than focusing on quantity, they focus on creating qualitative and diversified content with a few influencers, featuring them in brand events, videos and wider campaigns. The speed at which influencer marketing has been introduced and rolled out makes it both an exciting and concerning area in equal measure.

A strong business case for influencers and brands

The financial benefits of influencer marketing are compelling for influencer and marketer alike. Influencers with significant popularity and large follower counts can make huge amounts of money from their activities, developing a diversified revenue model by combining ad revenues with sponsorships [7]. As such, they receive products for free, are invited to exclusive events and receive money for the integration of commercial content in their content and the sales they generate with their posts (i.e., affiliate marketing). They increasingly develop long-term relationships with a brand by acting as brand ambassadors, launch their own product lines and are paid to take over the brand’s social media channel. Some influencers even launch their own brands and merchandise.

For marketers, influencers have become a powerful tool due to their cost-effectiveness. By relying on the power of user-generated content, advertisers can reach highly engaged audiences with minimal effort whilst benefiting from the creativity of influencers when developing marketing campaigns and surfing along their network. Influencers endorsing products to a legion of loyal and trusting followers has obvious advantages over traditional forms of advertising – especially considering Credos’ own research found that 63% of people say they “actively stop watching or listening during advertising breaks”. This cost-effectiveness, especially when employing micro-influencers, may reduce the barrier to entry into the advertising, thus increasing competition and fostering innovation.

A changing power dynamic

While one could say that influencer marketing is simply a – smart – combination of different well-known advertising tactics, it has created a synergy that has exceeded all expectations, shifting power structures in advertising creation; brands, for the first time ever, had very little control over the marketing content they were paying for. After all, the power of influencer marketing lies in handing over the creative design and content to the influencer as they know best what their followers like and want to see.

Brands, however, have since attempted to wrestle back control by offering more detailed briefings to influencers, organising structured campaigns with multiple influencers, and directing campaigns in which the influencers merely act as an endorser in a professionally filmed commercial. The fashion brand Pretty Little Things, for instance, developed an influencer programme to guide and educate influencers who are interested in endorsing their brand, including a detailed briefing of all requirements they have for the ambassadorship.

The success and growth of influencer marketing has also led to a greater professionalisation of the sector, with marketing and advertising agencies now connecting influencers with brands and assisting in the development of campaigns. In 2022, ISBA, the body that represents the advertising brand owners in the UK, released their Influencer Marketing Code of Conduct, aiming to ensure regulatory compliance while raising standards across the industry and improving the relationships between brands and influencers. These trends signal a shift back towards greater control for brands, providing assurances over messaging and delivery.

The industry’s professionalisation has also led regulators in numerous countries to introduce specific regulations regarding the proper disclosure of sponsored influencer content. The Audiovisual Media Service Directive in Europe (AMSD), for instance, now also involves social media content, while the ASA has now released its third edition of its Influencers’ guide to making clear that ads are ads handbook. Both regulators lay out clearly that content should be properly disclosed when being commercial, should not be misleading, and should not discriminate nor incite hate. The ASA also has specific guidance for influencer marketing that targets or appeals to a young audience, though the ability to enforce and police those rules in a fast-moving landscape are another matter.

The novel challenges of influencer marketing

Despite professionalisation and stricter regulations, several concerns have arisen regarding influencer marketing which may also be having reputational knock-on effects to the wider advertising industry. Influencer marketing can, at times, act as a covert marketing tactic, hiding itself as marketing and making viewers less critical [8]. The covert nature of influencer marketing may mislead followers as it is extremely difficult to distinguish commercial from editorial content and distinguish genuine from sponsored brand endorsements. These misleading sponsorships may also then harm advertising in the long run as consumers begin to feel manipulated and distrust advertising in general. In its infancy, it was extremely difficult to detect the commercial nature of an influencer post and recognise sponsored content as advertising due to lack of regulation.

Today, clear sponsorship disclosures are now added to sponsored content, making it easier for users to detect the commercial intent of the message. However, it may still be difficult to understand the exact nature of commercial deals due to ambassadorships leading to organic content as influencers post more than strictly requested in their contracts.

Regulators are doing all they can to keep influencer marketing in check, but the industry is a highly volatile one, with the influencer landscape changing on a daily basis (new influencers enter the market, while established influencers quit their activities, move to different platforms, etc.). This makes it extremely difficult to identify and monitor those social media influencers. Moreover, content is often available for a shorter period of time (e.g., Instagram stories disappear after 24 hours), which further hinders monitoring. Accordingly, current research reveals that unhealthy sponsorships are prevailing in influencer content; content analyses of kidfluencer profiles reveal that much of the content contains endorsements for unhealthy foods [9].

Further, research has shown that social media influencers promote e-cigarettes [10], alcohol [11] and gambling brands [12], and cryptocurrencies. Given the fact that those influencers are mainly popular among young children and adolescents, this practice raises ethical concerns as those risky behaviours are often positively depicted, potentially biassing social norms and potentially lead to addictive behaviours amongst adolescents. Media Smart UK are among a number of organisations worldwide who do work specifically on this issue, having identified it as an area of concern. Providing advertising literacy for young people will be key going forwards in this respect.

Regulation is having to constantly change its parameters for protecting children as it can be very difficult to detect and uncover the influencers who predominantly have a young audience. The influencer market is dynamic, with new influencers constantly popping up and others quitting their activities, and little to no transparency about the specific audience of those influencers and the extent to which children are watching their content. It may therefore be difficult to impose specific regulations to protect children (e.g., no product placements in videos that are targeting a child audience).

Additionally, and much less protected by current laws, one should be considerate of the impact influencer activities may have on the lives of children who are actively involved in the industry. Young children, known as ‘kidfluencers’, can have their own account on social media, and perform influencer activities under their own name. While ‘kidfluencers’ are more exceptional – especially given the efforts social media put in deleting child accounts – children are commonly featured on the accounts of their influencer parents. Such influencer activities, despite their value to the parents, may put undue pressure on the child. In many countries, discussions have begun regarding whether those influencer activities should be restricted and considered as child labour. In addition, a lot of personal details of the child are shared with followers, leading to violations of their privacy [13]. Parents not only share pictures of their children, but also disclose their hobbies, school results, habits, interests and even medical details.

Finally, the fact that influencers can make a living out of their daily life, are spoiled with luxurious gifts from companies and are living a seemingly perfect life, can evoke envy among followers. This, coupled with the fact that people are spending more and more of their time in the digital world, means that the natural human instinct of social comparison may be becoming skewed. Instead of looking around and seeing a reasonable range of wealth and excitement, people are increasingly comparing themselves to individuals whose success seems to far exceed their own. They are confronted with images of fashion influencers who show off their luxury clothes, travel influencers who are paid to spend time in luxury hotels, or fitness influencers who are paid for their daily fitness routines. In addition, as people rarely know the influencer in real life, it is difficult to check this content to reality and maintain perspective. This may result in negative social comparisons that are likely to affect one’s well-being negatively. Comparing one’s own body and life with that of influencers leaves the most secure and happy of us with the feeling that we are worse off, leaving us less likely to feel less satisfied with our bodies, friends, relationships and lives.

Conclusion

The fascinating world of social media influencers has opened up many new opportunities for advertising business. Influencing has quickly emerged as a new tactic in the marketing communication mix, taking up a position between media channel and advertising agency. Its success, however, comes with a few challenges for advertisers, changing power dynamics in the advertising world by giving influencers full responsibility to produce and distribute marketing messages on their own social media accounts. The reclamation of this control has been accompanied by tighter regulation and increased scrutiny, making influencer marketing a safer, more controlled industry, but there is still more to do to keep vulnerable members of our society safe.

References

[1] Hudders, L. & Lou, C. (2023). The rosy world of influencer marketing? Its bright and dark sides, and future research recommendations. International Journal of Advertising,  https://doi.org/10.1080/02650487.2022.2137318

[2] Hudders, L., De Jans, S. & De Veirman, M. (2021). The commercialization of social media stars: a literature review and conceptual framework on the strategic use of social media influencers. International Journal of Advertising, https://doi.org/10.1080/02650487.2020.1836925

[3] https://elitecontentmarketer.com/screen-time-statistics/

[4] Lou, C. (2022). Social Media Influencers and Followers: Theorization of a Trans-Parasocial Relation and Explication of Its Implications for Influencer Advertising. Journal of Advertising, https://doi.org/10.1080/00913367.2021.1880345

[5] Janssen, L., Schouten, A. P. & Croes, E. A. J. (2022). Influencer advertising on Instagram: product-influencer fit and number of followers affect advertising outcomes and influencer evaluations via credibility and identification. International Journal of Advertising, https://doi.org/10.1080/02650487.2021.1994205

[6] Ye, G., Hudders, L., De Veirman, M., & De Jans, S. (2021). The Value of Influencer Marketing for Business: A Bibliometric Analysis and Managerial Implications. Journal of Advertising, https://doi.org/10.1080/00913367.2020.1857888.

[7] Feller, G. & Burroughs, B. (2021). Branding Kidfluencers: Regulating Content and Advertising on YouTube. Television and New Media, https://doi.org/10.1177/15274764211052882

[8] Hudders, L., De Pauw, P., Cauberghe, V., Panic, K., Zarouali, B., & Rozendaal, E. (2017). Shedding New Light on How Advertising Literacy Can Affect Children’s Processing of Embedded Advertising Formats: A Future Research Agenda. Journal of Advertising, https://doi.org/10.1080/00913367.2016.1269303

[9] https://publications.aap.org/pediatrics/article/146/5/e20194057/75307/Child-Social-Media-Influencers-and-Unhealthy-Food

[10] https://tobaccocontrol.bmj.com/content/early/2021/10/08/tobaccocontrol-2021-056828.abstract

[11] https://www.frontiersin.org/articles/10.3389/fpsyg.2019.02991/full?utm_source=Email_to_authors_&utm_medium=Email&utm_content=T1_11.5e1_author&utm_campaign=Email_publication&field=&journalName=Frontiers_in_Psychology&id=497588

[12] https://www.elgaronline.com/view/journals/ielr/4-2/ielr.2021.02.03.xml

[13] Vanden Abeele, E., Vanwesenbeeck, I., & Hudders, L. (2023). Child’s privacy versus mother’s fame: unravelling the biased decision-making process of momfluencers to portray their children online. Information, Communication and Society, https://doi.org/10.1080/1369118X.2023.2205484

Liselot Hudders

Liselot an associate professor in marketing communication and consumer behavior at Ghent University, department of Communication Sciences and director of the Center for Persuasive Communication. She teaches courses in the bachelor and master. She is a board member of the European Advertising Academy and chair of the NeFCA persuasive communication division. She is also associate editor for International Journal of Advertising and Journal of Interactive Advertising. She serves in the editorial boards of Journal of Advertising, Journal of Advertising Research and Journal of Children and Media. Her work has been published in a diverse range of SSCI-ranked journals such as Journal of Interactive Marketing, Journal of Advertising, International Journal of Advertising, Communication Research, Computers in Human Behavior, Appetite, etc.