Legend has it that you could buy a townhouse for the price of 10 tulip bulbs in 17th Century Holland.
The Netherlands’ tragi-comic period of "tulip mania" is regarded as one of the world’s first speculative market bubbles. From the beginning of the 1600s, tulip prices soared to incredible heights before a dramatic bust in 1637 — when people suddenly realized that they were trading nothing more valuable than flowers.
Tulip mania comes to mind when reading about "influencer marketing," the practice of paying or otherwise incentivizing "stars" of social media to promote your content to their followers.
Last year, a now notorious article appeared on marketing portal Digiday’s "Confessions of a Digital Marketer" column, where a social media executive described how the excitement around influencers led to a crazy speculative market:
“We threw too much money at them and did it too quickly. So in 2014, they were making $500 to show up and take some photos. Then it became $1,500. Now it’s hundreds of thousands of dollars.”
Then, this summer, a U.S. marketing agency revealed that it had conducted its own experiment on influencer marketing. The firm created a couple of fake influencer accounts, using models and stock imagery to create influential Instagram accounts, before buying up followers. Before long, real brands were contacting the fake influencers, offering them hundreds of dollars to be associated with them.
So, is influencer marketing just the next tulip mania?
Hearing Out Influencer Marketing’s Proponents
The website Influencer Marketing Hub has some impressive statistics about the impact of influencers. According its data, 40 percent of Twitter users say they have made purchases as a direct result of a tweet from an influencer. And a 2015 Deloitte report said that 47 percent of millennials are influenced in their purchase decisions by what they see on social media (though not necessarily by influencer marketing).
Even if we take these kinds of statistics with a pinch of salt, it doesn’t seem unreasonable to believe that influencer marketing can work in some cases. People have always wanted to be part of groups, and people have always imitated what leaders in those groups do.
What’s more, some argue that we have moved beyond the "peak of inflated expectations," to use the Gartner hype cycle analogy, and have fallen into the "trough of disillusionment." However, before long, we can expect influencer marketing to become a tool that provides real ROI.
Doubts About Influencer Marketing
There’s no doubt that people trust the recommendations of people they know when making purchasing decisions (rather than what an ad claims.) However, one study showed that the vast majority of these conversations happen offline. Around 90 percent of influential conversations relating to purchasing decisions happen face-to-face, in the office, at parties or over a cup of coffee.
The point is this: Yes, people do see things online, and maybe some will be influenced by what they see. Yet, in the majority of cases, the internet plays only a small part in how people are influenced.
When influencers are paid to promote a single tweet or Instagram photo, in a world where people are already bombarded with ads, are they really any more influential than any other attempt to get customers to depart with their money?
You could, of course, launch these same criticisms against any other form of advertising. But, as this article explains, the more brands try and get aboard the influencer bandwagon. the less valuable it becomes. As consumers become increasingly aware of what’s going on, they become increasingly blind to the ads.
But, the problem with influencer marketing goes further:
- It damages trust: If an influencer is shown to just be promoting some brand, their audience will rapidly lose trust in the influencer — undermining all their value.
- It is disingenuous: Traditionally, an advert’s an advert — you know what you’re looking at during an advertising break on TV, a billboard or those 30 annoying seconds on YouTube. Influencer marketing treads along more shaky ethical ground, however, by duping an influencer’s followers into believing they actually like your trainers/drinks/smartphone.
- It has legal risk: Legislators around the world are getting wise to influencer marketing and are requiring that any sponsored post be clearly labelled as an ad (which is highly likely to activate people’s banner blindness)
So, is influencer marketing just a passing fad? A period of tulip mania for brands and marketing agencies?
Ultimately, like any marketing method, you need to line up your campaign with your target audience personas. If, like many users of social media, your audience is barely influenced by the so-called influencers, chances are, your money will be wasted. But, in some cases, like a well-cared for tulip, those investments in influencers might just bloom.