Top 10 Reasons Why Influencer Marketing Works as an Advertising Tool

The business of influencer marketing is slated to hit $10 billion by 2020. No matter how you view influencers and their legitimacy, they make money. There is success to be had for both the influencers and the brands they advertise.

Of course, it can be a little unnerving to think about investing valuable marketing dollars into what is essentially a personality. It's time to rethink marketing campaigns and the relationship people have with brands. Gone are the days of brand loyalty built purely off of commercial art, jingles, and ad space.

If you want to be competitive, you need to use this advertising tool as you would any other industry standard.

Why Use Influencers as an Advertising Tool?

These days, influencer marketing has plenty of myths and misconceptions surrounding it. There are cautionary tales and calls to "kill" influencer marketing.  This debate is akin to the old digital marketing vs traditional marketing.

There are claims that influencers are ruining digital marketing campaigns. The arguments largely revolve around surrendering control and creativity to virtual nobodies with large follower counts. When you think about it, though, web influencers are not much different than B or C-list celebrities.

Not everyone can make it and become an influencer. It's like using local celebrities for improving reach, only better. Online influencers provide many benefits that traditional advertising can't.

There are ten good reasons why you should be tapping into influencer marketing today.

1. Word-Of-Mouth Advertisement

Word-of-mouth advertising is the most sought-after and valuable form of advertising. Being able to influence a buyer's decision behind the scenes is what we all aim for. Aggressive positioning always has its limits, whether through budgeting or agitating buyers.

Consumers get desensitized from plastering of advertisements, and the ROI soon bottoms out. Word-of-mouth advertising has a higher conversion rate and retention rate. Influencer marketing is the perfect marriage between word-of-mouth advertising and digital marketing campaigns.

2. Social Media Benefits

Being present on social media is integral to any digital marketing strategy. You should be increasing your spending on social media advertising. Why not kill two birds with one stone by using influencers as a major advertising tool?

A healthy mix of PPC ads and social media marketing is the key to digital marketing success. An influencer is the next generation of PPC targeted advertising. You're tapping into a market of consumers that demonstrate a higher rate of commitment to purchasing based on influencers they trust.

In fact, 30% of consumers are more likely to buy a product recommended by a non-celebrity blogger. Consumers don't want to be sold anything directly. Influencers create an organic dialog with their followers to tell them about something they've tried.

The resulting shares that stem from your influencer ads can greatly boost your online presence. It's a good idea to set up funnels and social media contests with your influencer campaigns.

3. Influencer Marketing ROI

A well-executed influencer marketing campaign produces $6.50 for every $1 invested. This type of ROI is observed through a number of methods. The most basic form is trackable links.

You tell the influencer to share your trackable link and then you can directly measure your ROI. A more detailed method would be social media analytics. There you can track engagement rates, new followers, and so on.

From your engagement rates, you can measure your ROI per engagement. Engagement, website traffic, campaign ads, trackable URLs and editorial coverage metrics give you a detailed earned media value. Feedback and comments provide another ROI that is often hard to quantify, but undoubtedly important.

4. Selection of Influencers

There are over 1 billion users on Instagram now, and 8% of those users have at least 50,000 followers. These are what we consider micro-influencers.

Because there are so many influencers right now, there's a lot of flexibility for campaigns. You have influencers in numerous niches, targeting a wide range of demographics with various tiers of followers. You don't need to set aside tens of thousands of dollars to tap into influencers.

Micro-influencers carry the same type of value, but with a smaller reach. We're still talking tens of thousands of followers. Keep in mind that these followers are much more valuable than follower counts of the average Joe.

These potential customers are engaged and place a lot of trust in purchase decisions behind influencers.

5. Utilizing Momentum

The internet's version of the "fear of missing out" behavior can be ravenous. When social media posts go viral, they can hit bigger than a Black Friday sale. Influencers create this snowball effect, where they get the ball rolling for you.

Your digital marketing strategy can carry this momentum with ads, email marketing, and increasing social media reach. As people start to see your brand more and more, you reap the benefits of this psychological urge. Tying your digital marketing campaign to the holiday season is how businesses go global.

We mean that literally and figuratively. Global travel influencers can really breathe some new life into your typical e-commerce business.

6. Traditional Ads Struggle

An argument can be made that traditional advertisements (banner ads, video ads, paper ads) are less impactful. Newer generations have become desensitized to these ads. They are tuning out of cold marketing strategies, and it's showing.

Even podcast ads have reached that cringe territory. Nobody wants to hear their favorite podcaster spend five minutes talking about some product they obviously don't use. It's no different than radio show DJs who comically pitch ads about lip balms.

People will still continue to use AdBlock, premium streaming services, and Netflix to avoid paid ads. Meanwhile, the active followers of influencers demonstrate that people actually prefer these ads.

7. Influencer Clout

Well after your influencer ad is posted, your association with them continues to pay dividends. You can use this relationship to add name-recognition to your brand, even if they are micro-influencers. The numbers produced off of your influencer's post grab attention everytime you reshare it.

You also want to give the impression that your brand constantly rubs shoulders with celebrities. After you acquire a few internet celebrity names under your belt, you'll start to earn that reputation. In some ways, dozens of micro-influencer ads can be more lucrative than one A-list influencer ad.

8. Non-Invasive Advertising

Similar to non-invasive surgery, influencer marketing doesn't disrupt the person's daily lives. They aren't getting blasted in the face with an unsolicited advertisement. Influencer ads are clearly marked and aren't embedded in their entertainment mediums.

This process is a lot more organic, it plays off the strengths of the influencer, and is a more hands-off approach. Usually, influencer ads require way less planning, rehearsing, or directing by the advertising team. It's actually counterintuitive to force influencers to abide by scripts, fake their experiences, or tell made-up stories.

The highest rate of conversions come from educated consumers who are deciding to buy based on their own willpower. Intent to purchase is hard fought in a sea of ads, but it's much easier to get through recommendations from friends and mentors.

9. Valuation of Influencers

As we mentioned previously, social media numbers grab attention on their own. People obviously place more trust in accounts with high follower counts, shares, likes, and comments. The evolution of influencer marketing has created a whole new way of evaluating brands.

While there is no exact science to the valuation of accounts, Facebook's relevance score is one way to measure. Taking a look at what social media monetization services charge is another. Estimates range from less than a dollar per like, share, or Tweet, to $5-8, depending on where you look.

Larger companies often base Tweet/Post-based giveaways or discounts on what the perceived value is for them currently. Influencers offer you a cheap and honest way to get a ton of social media value in a short period of time.

10. Hyper-Targeted Focus Groups

Influencers are a great advertising tool, but they're also a great way to focus test, too. If you want raw, unfiltered feedback from a subset or demographic, hire an influencer. This is cheaper than hiring an agency to do focus testing or gradually swallowing that pill of failure.

Advertising used to be much more haphazard and relied on lots of broad industry surveys. It didn't help that this data was also held by a handful of gatekeepers. These entities dictated what got shown, according to their liking or political leanings.

Thanks to influencer marketing, small businesses have access to a powerful amount of data with a low barrier for entry. More experimentation can be done to stand out, as a result. Everything can be tracked, quantified, and analyzed online.

Grow Faster, Invest in Influencers

Branding is a neverending conquest. Marketing budgets should grow proportionate to gross profits. How you spend those marketing dollars should evolve with the greatest ROI, the most reach, and relevance to your brand.

Marketers are increasing their budgets for influencers each year. This isn't because they're trying to ride another trend, it's the natural progression of word-of-mouth advertising. Don't be another one of those companies that catch the train late, like social media marketing.

If you want to learn more about influencer marketing, and why it's a top advertising tool, check out our own influencer market services here. The proof is in the pudding. We provide all the reasons why you need to tap into influencer potential.

Find out how much we can make your company grow faster today.