In my previous post, Radical shifts in the media economy, I spoke of the changes that have arisen in the media landscape, touched upon the democratization of communication, and mentioned the emergence of the influencer economy. Today I am going to delve into the influencer economy and some of its implications for society now and in the future.
What is the influencer economy?
At its most simple level an influencer is defined as:
“one who exerts influence : a person who inspires or guides the actions of others”Merriam Webster dictionary
I first became aware of this emergent class of individuals back in about 2012, when a bunch of my acquaintances on Twitter suddenly started to take photos of every meal “for Instagram”. Then they started talking about how they were parlaying their Insta (I shall call it thus henceforth for brevity) pictures of food into free meals at some rather nice restaurants. Then some folks came to me talking about agencies to respresent influencers, and suddenly many folks I knew were monetising their Insta ‘fame’ and were doing paid posts and similar. Put simply, in this new world with democratized communications technology, ordinary folks who have a particular passion can show it off to the world and be remunerated for it. Now there are even influencers who give advice on how to become an influencer. However, the influencers are still interacting on behalf of brands in very traditional ways, such as product demonstrations and product endorsement. But the key insight that drove the development of the influencers as a key part of a modern marketing strategy was that consumers trust other consumers more than they trust brands. Thus influencers have become a convenient way for brands to cut through and reach consumers via social media. Roll on a decade and now being an influencer is big business, with Insta as the top platform for influencers:
“The market grew from $1.7 billion in 2016 to $9.7 billion in 2020. In 2021, it soared to $13.8 billion, indicating a steady growth. This year, the market is projected to expand to a whopping $16.4 billion industry. ”Influencer Marketing Statistics for 2022
How influencers are changing things
In the early days of the internet it was full of people who were just hanging out and doing stuff for free. There was little thought of monetization, and certainly no conscious thought of becoming an influencer. Indeed, many on the early internet probably would have thought that the very idea was a bit naff. But with the emergence of social media from the early 2000s through to the 2010s it seemed as if the thoughts of everyone in the social media space started to turn to monetization. Which it turns out is not some new-fangled revenue model – it is precisely the same model as that which had powered those ‘rivers of gold’ that had made the mainstream media so rich back in the day – advertising. Now that influencers are such a big part of the modern marketing mix it is leading to some interesting changes in how influencers act, and I will explain this more in the next post.
Advertising in new media
However, unlike the static classified advertisements that made so much money for the news media back in the day, these new platforms provided new affordances. Unlike in the past, now ads were data that could be mined, and users became the commodity that could be tracked across the internet. This data driven approach means that marketers can micro-target to specific segments and can measure the engagement right through from the initial contact right through to purchase. This new data driven advertising media landscape has collided with the rise of the influencer in interesting ways. More on this in the next post.