Individuals with power to influence purchases— Is this the real Social Media?

Watch Charlize Theron walk on water in a commercial, you know she’s promoting Dior perfume. See Tom Brady’s steely gaze in a magazine ad, you know he’s shilling for Tag Heuer. Witness Jennifer Garner use her girl-next-door charm to try to get you to sign up for a credit card, you know she’s working for Capital One.

However, when it comes to social media, you never know when someone is making a genuine recommendation or a paid push.

Paid influencers – individuals with power to influence purchases – is a booming phenomenon in the world of marketing. Some estimate spending on Instagram influencers has already hit a billion dollars. And according to a survey done by Linqia, influencer marketing budgets are set to double in 2017.

The rapid growth is based on perceived effectiveness. In that same Linqia survey, 94% of marketers found influencer marketing to be successful. Nearly 40% of Twitter users say they’ve made a purchase directly because of an influencer tweet. But despite the statistics touting the booming success – mostly from companies that benefit from growth in the industry – the biggest challenge is calculating the return on investment.

The easiest and most obvious way to detect whether influencer marketing is working is the old-fashioned way – more sales. However, if you’re going for brand awareness, the number of clicks, retweets/repostings, and comments will be a good gauge. The most important thing is to identify your goal and then determine what would be a successful return.

The simple thought is more followers equals more return. However, the goal isn’t eyeballs but  engagement. Utilizing micro-influencers – people with 10,000-100,000 followers – is a shift in that capitalizes on that concept.

“A survey of 2 million social media influencers by influencer marketing platform Markerly showed that for unpaid posts, Instagram influencers with fewer than 1,000 followers have a like rate of about 8 percent, while those with 1,000 to 10,000 followers have a like rate of 4 percent.

As following base continues to increase, like rate keeps decreasing. Instagram influencers with 10,000 to 100,000 followers see a 2.4 percent like rate, compared to 1.7 percent for those with 1 million to 10 million followers and more. ”

DigiDay (

Micro-influencers tend to have more in common with their followers and therefore garner a more focused audience. Major social media celebrities may cast a wider net, but this also results in a broader cast. For example, Kendall Jenner has 80+ million Instagram devotees. But if you’re trying to reach an audience to sell, for example, hockey equipment an NHL star – such as Nikita Kucherov with 33,000+ followers – will attract a smaller but more interested and invested group. Learn more about how to boost your Creative imagination and SEO

Micro-influencers also tend to partner with fewer brands, which makes their recommendations more believable and genuine. Trust is more critical than ever now that the Federal Trade Commission is cracking down on sponsored posts. Earlier this year, the FTC sent letters to 90 influencers and marketers warning them to clearly indicate when a post is sponsored. The letter states:

“If there is a “material connection” between an endorser and an advertiser – in other words, a connection that might affect the weight or credibility that consumers give the endorsement – that connection should be clearly and conspicuously disclosed”

It goes on to lay out very specific guidelines on how to clearly disclose when the subject is being paid. While there has yet to be any legal action taken against influencers themselves, Warner Bros. settled a complaint from the FTC for deceiving customers related to a paid influencers campaign for a video game. (

This new frontier of marketing is akin to the Wild West, but paid influencers appear to be here to stay. Like most things, the market will settle and dictate a price that makes it worthwhile for both sides. Transparency will be the key to making that happen.