Wednesday, April 25th, 2018 | 7 min read
No one wants a warning letter from the US Federal Trade Commission (FTC) in their mailbox. But that’s what 90 influencers and marketers received in 2017, reminding them to clearly disclose influencers partnerships on their social media posts.
Regulations like these may become more common as influencer marketing continues to grow at a rapid pace – and grow it does. According to the Association of National Advertising (ANA), 75% of brands use influencer marketing and 43% of them plan to increase their budgets within the next year.
By partnering with social influencers, marketers can reach built-in audiences of loyal followers with authentic and original content. In fact, research from #paid and Nielsen Consumer Insights found that influencer marketing has an overall positive impact on brand affinity and purchase intent, and it’s 2X more likely to engage viewers than TV ads. Influencer content also allows brands to work around ad blockers, which are now used on more than 600 million devices.
As influencer marketing continues to flourish, trends are emerging – indicating how this strategy has already impacted digital advertising and what brands need to know going forward.
Here are three influencer marketing trends shaping 2018.
1. Disclosure is Crucial
The FTC is expected to continue cracking down on transparency and disclosure, especially if influencers and brands don’t play by the rules. The FTC’s Endorsement Guides state that if there is a “material connection” between an endorser and advertiser, it must be clearly disclosed. Yet eMarketer reported that 52% of influencers say they don’t labeled their sponsored content. And marketers aren’t off the hook, as 40% of influencers say they only labeled their content when asked to by the brand.
Some marketers and influencers also haven’t labeled their sponsored content because they worry that users won’t engage if they know they’re being served an ad. Yet a study by Open Influencer found that these labels don’t actually affect consumer sentiment. Another part of the problem is that influencers haven’t quite understood what constitutes a proper label. The new FTC guidelines help clear that up: Popular hashtags like #thanks, #collab, #sp, #spon, and #ambassador are not sufficient for announcing an influencer partnership.
As the FTC’s warning letters state, “To make a disclosure both ‘clear’ and ‘conspicuous,’ you should use unambiguous language and make the disclosure stand out.” For example, the FTC told influencers to put their disclosure in the first line of their Instagram caption, since the third line gets cut off by the “Read more” section.
Outside of the FTC, the UK is also tightening its rules around influencer marketing. Its own Advertising Standards Authority (ASA) just announced that it will launch an official review of how influencer content is disclosed online. “People shouldn’t have to play the detective to work out if they’re being advertised to,” said ASA chief executive Guy Parker. “That means the status of a tweet, blog, vlog, Instagram post or story should be clear.”
2. Instagram Dominates
Almost 80% of marketers consider Instagram their primary platform for brand collaborations, as eMarketer reported. In fact, the number of influencer posts on the platform nearly doubled to more than 1.5 million between 2016 and 2017. This mirrors the ANA study, in which 36% of marketers said Instagram was the single most important channel for their influencer marketing.
It’s easy to see why. Branded influencer posts drive more engagement than posts from a brand’s own Instagram account, as a 2017 NewsWhip study found. Instagram is also making it easier for brands to disclose their influencer partnerships. The platform recently launched tool that allows influencers to tag their branded content with the disclaimer: “Paid partnership with [business partner]” in their post’s header. These tags will allow brand partners to view metrics on their influencer posts and sign off on partnerships directly in the app by approving the tag.
As Instagram continues to grow for influencers, other social channels will have to catch up. Snapchat, for example, has begun verifying influencers with significant followings and allowing them to use its Official Stories feature. Meanwhile Facebook is testing new features for creators like engagement leaderboards for their top fans, portfolios of influencer marketing insights, and monthly subscriptions for superfans.
3. Celebrity Endorsements Lose Luster
Influencer marketing continues to flourish in part because consumers engage with, relate to, and trust social influencers more than major celebrities.
According to a study from Fullscreen and Shareablee, mid-tier influencers with 250,000 to 1 million followers are more engaging and trustworthy than big celebrities. Thirty percent of consumers even purchased a product recommended by a digital creator compared to just over 20% who bought a product promoted by a traditional celebrity. The ANA even found that most brands are using either mid-level or micro influencers with under 100,000 followers. This shows that brands are prioritizing quality over quantity; they’d rather reach a highly engaged audience of 100,000 than an indifferent audience of 1 million.
As eMarketer reported, millennials are also wary of celebrity endorsements; 78% of them had an either negative or indifferent view of these endorsements. Still, that doesn’t mean brands can partner with any influencer and call it a day. Consumers don’t want to feel cheated, so brands need to ensure that each influencer can create authentic content for their audience and, of course, be transparent about their partnerships.
Preparing for an Influencer-Driven Future
It’s an ad-blocker-eat-ad world out there, and influencer marketing is emerging as a compelling solution. It allows brands to expand their reach, engage built-in audiences, and generate unique content with some of the best creators on social media.
As influencer marketing grows, however, new challenges and regulations continue to crop up. So marketers have to be sure they’re taking a smart and responsible approach to their influencers partnerships. By promoting transparency, keeping an eye on the major social platforms, and carefully selecting influencers, they can better reach their target audiences – and stay off of the FTC’s watch list.
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