What is Influencer Marketing

US Digital Advertising Industry Analysis Digital advertising in the U.S. has come a long way, with many companies now focusing a great deal of their marketing on the kind of targeted marketing that digital advertising allows. In the retail industry, digital marketing has increased from $15.83 billion spent in 2016 to a projected $27.58 billion spent in 2019. The automotive industry has nearly doubled its expenditure on digital advertising since 2016, when it spent $9.14 billion as compared to a projected $15.65 billion for 2019.

The same goes for financial services, which spent $8.78 in 2016 and is expected to spend $15.25 billion on digital marketing in 2019. The entertainment industry spent $3.45 billion on digital marketing in 2016 and for 2019, it is expected to spend $6.64 billion. In the Appendix are more figures by industry for digital ad spending in the U.S. What the statistics show, however, is that digital ad spending is increasing year over year across all industries as more and more people use the Internet as a primary source of information and news (eMarketer, 2018).

Part of the reason for this growing trend is that more Internet users and consumers are buying mobile phones—smart phones and iPhones—which allow them to browse the Internet virtually anywhere at any time. So it is no more a matter of simply having to sit at one’s desk and browse. Today, one can browse on the go. This means that more eyes are focusing on the Internet than on traditional media, such as TVs or print media such as magazines.

Advertisers have to go where the eyes are going, and so digital advertising is growing and every industry shows evidence of that. Mobile advertising is the main source of growth, too. As Beattie (2018) notes, “while U.S. digital advertising has grown significantly, mobile advertising has been outpacing all other platforms. In 2018, it will account for 69.9% of all digital advertising. Holding 33.9% share of all of the U.S. advertising spend, mobile will overtake TV, leading the ad space. That figure is projected to reach 47.9% by 2022.

One of the key drivers of this is mobile commerce.” In other words, people are using the mobile phones to do their shopping today. Mobile phone advertising, therefore, is the primary focus of digital advertisers in all industries because that is where the eyes of consumers are most fixed. Influencer marketing is also on the rise. The reason for this shift to influencer marketing is that more people are using ad blockers or ignoring digital advertising altogether.

They are not interest in traditional or conventional ads because they do not trust them and do not view them as informational. Today’s generation wants to know from peers which products are good and which are bad—so they are turning more and more to influencer marketing. They view this type of marketing (videos on YouTube where a person from their age group gives a run down on a line of products) as more trustworthy.

Indeed, polling shows that 70% of teens trust influencer marketing more than they trust traditional celebrity marketing. YouTube has become the go-to source for influencer marketing, as influencers put up videos about new products and essentially act as brand ambassadors while they build their own YouTube following. It is a win-win for both the influencer and the company that is promoted. The main target of influencer marketing is women, as 86% of women use social media to get advice on what products to purchase (Knightley, 2018).

Moreover, roughly half of all consumers rely upon influencer marketing when making their consumption decisions. And the upside for influencer marketing campaigns is that they earn an estimated $6.50 for every dollar that is spent (Knightley, 2018). Knightley (2018) notes that “influencer marketing is the fastest-growing online customer-acquisition method” and that “57% of fashion and beauty companies engage in influencer marketing.” By 2020, it is expected that the influencer marketing industry will reach $10 billion. Consumers today want to get advice from influencer marketing.

Celebrities may still have some appeal, but today’s young consumers want to know what people in their own age group are saying as well. At the same time, it is important to note that more and more web browsers are using ad blockers, which blocks digital advertising on web pages. How many customers are now using ad blockers? About 40% of Internet users now have some form of ad blocker installed on their Internet device (Knightley, 2018).

This means that influencer marketing is helping to fill a big gap because there is no way to block influencer marketing. Rather, influencers are sought out by consumers because they test products, give reviews, and do all sorts of things that relate to a product. That is why today marketers will spend about $50,000 on an influencer marketing campaign (Knightley, 2018).

The return is great, though, because it is also estimated that about 40% of Twitter users have made an online purchase based on a tweet—which is a form of influencer marketing (Knightley, 2018). The mobile device is a great tool for impulse buying and this is the reason: one surfing the web will see a recommendation.