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Home / Business / Online influencers tell you what to buy and customers ask who is listening

Online influencers tell you what to buy and customers ask who is listening



Ipsy, an online cosmetics brand, pioneered the payment of high-paying social media stars to promote eyeshadows and lip gloss on Instagram posts and YouTube videos.

Now the brand is again leading the time by retiring.

Companies will spend billions of dollars this year on influential online influencers who showcase their products on social media. However, with no way to measure revenue or to see how many people are seeing the ads, the companies that paved the way for the influencer economy – mostly early adopters like Ispy – wonder if it's worth it.

What started as friends and family? Sharing their favorite products has become a lucrative advertising industry for celebrities, influencers, and memebers. Such paid endorsements, which are referred to as sponsored content, correspond to a 30 second TV commercial. Celebrity stars can spend over $ 1

00,000 or more on a single YouTube video or Instagram photo.

Inflation

Despite signs that inflation rates are less influential, companies are paying them more money.

Price per Instagram post for inflation rates, by number of followers, in 2019

Estimation of global brand spending for influencers

middle class (50,000-500,000)

macro (500,000-1 million)

celebrities (several millions)

Estimating Global Brand Issues for Influencers

Price per Instagram Post for Influencers, by Number of Followers, 2019

Mid-Tier (50,000-500,000)

Macro (500,000-1 Million)

Celebrity (Several million))

Estimating Global Brand Issues for Influencers

Price per Instagram Post for Influencers by Number of Followers, 2019

Middle Class (50,000-500,000)

Macro (500.000-1 Mio.) [19659021] Celebrities (several millions)

Estimation of the global brand spectrum Price per Instagram post for influencers, by number of followers, 2019

Mid-Tier (50.000-500.000) [19659023] Macro (500,000-1 million)

Ce lebrity [19659027] But a hint of deception now stains the market of influencers. Influencers have disrupted advertiser loyalty by increasing the number of followers and sometimes buying fake ones by the thousands. They have also damaged their credibility with real followers by promoting products they do not use.

"With all these paid contributions, the question is whether influencers are real or just doing what they spend," said JaLynn Evans, a 19-year-old student at Virginia Commonwealth University.

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The loss of confidence undermines the power of influencers. according to

Marcelo Camberos,

Ipsy's manager. "Have they reached their peak? I do not know, "he said. Today, the company is recruiting its own customers to ship products for free.

It is difficult to keep track of the effectiveness of influencer advertising. In a sense, their influence diminishes. Engagement rates, which measure the number of likes that a post generates as a percentage of a person's followers, have declined year-on-year this year, according to InfluencerDB. This allows brands to support the management of influencer campaigns. [19659033] Shrinking Influence

Instagram exposure rates * decline.

"Consumers can see if someone is genuinely looking after a product or just trying to push it," he said

Anders Ankarlid,

Managing director of the online stationer A Good Company. "The bubble is bursting."

Advertisers can not ignore social media. Instagram alone has more than 1 billion monthly users. Mediakix, an influencer marketing agency, estimates that in 2019, companies worldwide will spend between $ 4.1 billion and $ 8.2 billion on influencers. That's an increase of $ 500 million in 2015, but still a fraction of the $ 624.2 billion that companies will spend on advertising worldwide this year, according to an estimate by media buying agency Zenith.

Walmart Inc.

This year, influencer posts were added to the site to promote products such as Sofia Vergara's Sofia Jeans and blogger Liz Marie's home collection. Last year,

Unilever

PLC warned that fraud undermines the power of the influencers. However, in June, the investment group agreed to acquire a stake in a software company that helps brands monitor influencer campaigns.

Despite questions of diminishing influence, the money paid for influencers continues to rise, according to Mediakix – around 50% a year since 2017 This helps to bring brands into line with influencers. According to Mediakix, prices per Instagram post range from $ 200 for an influencer with only 10,000 followers to over $ 500,000 for celebrities with millions of followers.

Brand Ambassador of the online cosmetics company Ipsy.


Photo:

IPSY

A lawsuit this month indicated that the funds were paid to the biggest celebrity influencers. The singer

Ariana Grande

sued Forever 21 Inc. for alleged theft after denying a promotional contract with the clothing retailer.

wife. Grande, which has 165 million Instagram followers, accused the company of hiring a similar model for its Instagram posts and website. The model wore a similar hairstyle and dress as the pop star in her music video "7 Rings", which has more than half a billion YouTube views.

"Market value for a single Instagram post by Ms. Grande is in the six-digit range," the lawsuit claims, demanding at least $ 10 million in damages. Forever 21 denied the allegations in a statement.

Akash Mehta, an influencer with 293,000 Instagram followers, was recently offered five times his $ 2,000 prize for a single post. He was paid by such well-known brands as Volvic water and the Swiss watchmaker Ulysse Nardin SA. The big offer, he said, "was a turning point for me. I realized that Influencer Marketing went awry. "

Mr. Mehta said he accepted the payment, but he did not think he could deliver five times the value he normally charges.

Some established brands are also facing problems.

Kellogg Co.

What pays the endurance athlete and Special K fan

Sophie Radcliffe

To tell about her love for muesli, she said that it had become difficult to stand out from the crowd. "Consumers are well aware of how influencers work," he said

Joseph Harper,

Kellogg's e-commerce marketing manager for Western Europe.

Some companies are revising how to use influencers to detect change. Banana Republic, which has used such well-known influencers as

Olivia Palermo,

a Socialite with 6.2 million Instagram followers, also opens up its own customers.

The Gap Inc.

Self-owned apparel chain is featured on Instagram by real-world buyers in their favorite Banana Republic outfits, which receive $ 150 gift certificates.

Cassie Fisher,

21, was a recruiter who said she had dealt with influencers who had no connection to the products they advertised. What differentiates her from influencer phonies is that she already bought most of her clothes in the Banana Republic when the brand turned to her.

"My friends and I are fed up with constantly selling things," said Ms. Fisher, a University of South Florida student with 1,342 Instagram followers. "When you scroll through your Instagram feed, one post after the other is sponsored."

Mr. Mehta, the influencer, also worked as a digital media manager for Christian Dior SE and Estée Lauder Cos. And supervised their influencer marketing programs. He said that companies do not always know what they are buying.

"When you pay for a poster, you know roughly how many people will see it," said Mr. Mehta, 25. "With Instagram you have no idea. Followers can be bought.

A Good Company, the online retailer, worked with 4,000 influencers to promote eco-friendly stationery and other office supplies. They paid them money or gift cards for their social media posts.

A recently published Instagram post by Akash Mehta, an influencer with 293,000 followers, raises the Museum Hotel in Turkey.


Photo:

Akash Mehta

The company, which did not achieve its expected sales increase, sent an anonymous survey to its influencers asking if they would ever have paid for followers, likes or comments. Nearly two thirds of respondents agreed, said CEO, Mr. Ankarlid.

HypeAuditor, an analyst, examined 1.84 million Instagram accounts and found that more than half of the respondents used fraud to inflate followers.

Some influencers had a large number of followers who were not real people, meaning that the accounts were bought or were inactive

Anna Komok,

Marketing Manager of HypeAuditor. Clues are a large number of followers outside the home country of the Influencers.

The scams cost little. Companies known as click farms employ staff to increase online traffic. They sell 1,000 fake YouTube followers for only $ 49. On

Facebook

The same number of followers will cost $ 34 and $ 16 on Instagram, according to Masarah Paquet-Clouston, a researcher at cybersecurity firm GoSecure, who worked with others to determine prices.

Facebook and Instagram, which own Facebook Inc., have policies against such deceptions, a corporate spokesman said, as well as an initiative to remove fake likes, follow-ups and comments from accounts using third-party apps to popularity to increase. YouTube did not respond to a request to submit comments.

Fraud by influencers will cost advertisers $ 1.3 billion this year

Roberto Cavazos,

Professor of Statistics at the University of Baltimore.

Television, radio, magazine and newspaper advertising is based on standardized, audited third-party measures, including those of

Nielsen Holdings

PLC.

Some influencers mislead their followers by not disclosing when they will be paid to publish products or services, as set forth in the Federal Trade Commission's guidelines.

Tom Le Bree

In co-founding online retailer Beautonomy in 2018, he said, "We thought influencers would be a miracle weapon and would bring all the traffic we needed."

An Instagram post by Cassie Fisher showing her Banana Republic trousers ,


Photo:

Cassie Fisher

Beautonomy worked with influencers with about 100,000 followers on Instagram and other social media. Influencers created their own Beautonomy make-up palettes and promoted products in posts. Beautonomy, which is jointly owned by the Beauty Company

Coty Inc.,

agreed to give the influencers a percentage of sales. However, they did not generate enough revenue to justify the program.

The company instead bought ads on Facebook and elsewhere, LeBree said.

adman

James Cole

He said he had worked on dozens of social media campaigns with influencers with no measurable return. He stopped trying.

Instead, Mr. Cole founded H Hub, which works more like a traditional advertising agency. It connects photographers, videographers and other content creators with brands, including

Yelp Inc.

Instead of paying influencers, brands buy content from H Hub and publish it themselves.

"When Instagram started, you looked at pictures posted by your friends or other trusted people," he said. "Brands ruined it by bringing their own messages. Consumers are well aware that just because an influencer writes about a product does not mean that they like it. "

jeweler

Alexis Bittar

has moved away from influencers. The company now prefers to create its own social media content. Recent contributions include photos of the 1968 Alexis Bittar Volkswagen bus, presented by the company at events such as the Art Basel in Miami and the Music Festival Coachella in California.

"We've reduced paying for posts," he said

Matteo Del Vecchio,

CEO of the parent company of Alexis Bittar, Deconic, owned by Brooks Brothers. "It's difficult to quantify how that translates into sales."

Even with high-priced offers, some influencers have concerns.

Amber Atherton

She caught the attention of advertisers after participating in the British reality TV show Made in Chelsea. Then she experienced the dilemma of the influencer. "Brands offered to pay me $ 5,000 for a single job," she said, "although they are not relevant to my followers." She refused products that she would not use.

wife. Later, Atherton Zyper, a software company, helped Banana Republic and other companies find customers who act as influencers.

When Ipsy started in 2011, its strategy of using influencers over traditional advertising was unconventional. founder

Michelle Phan

was also an influencer and gave makeup tips on YouTube. By 2017, it had 10 million followers. This year she left Ipsy and stopped posting on YouTube.

"Whoever I was in front of the camera and who I was in real life, gradually felt like a stranger," Ms. Phan explained in a YouTube video her exit.

Write to Suzanne Kapner at [email protected] and Sharon Terlep at [email protected]

Copyright © 2019 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8


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