Influencers are worth $15 billion to companies
Testimonials from social media celebrities are already significantly more profitable than traditional advertising. In the coming years, companies worldwide will spend up to 15 billion dollars on influencer advertising.
Today, social media celebrities receive about $8 billion for ads, but the influencer boom will soon reach a new peak, according to Sylvia Jablonski, managing director for capital markets at U.S. investment advisory firm Direxion.
Industrial metamorphosis
"We've seen this metamorphosis of the advertising industry before. It has evolved from traditional ads in magazines to billboards to TV commercials. Today, we've arrived at social media advertising. Companies have realized that influencers with many followers can actually lead to more purchases," "Yahoo Finance" quotes Jablonski.
According to Jablonski's assessment, the return on investment for influencer advertising is around 3.5 percent. In contrast, it is only about 1.2 percent for ads in magazines or on Google. Instagram users in particular, with a large number of followers, have a massive influence on their purchasing decisions.
Wave of regulation looms
While the trend toward influencer marketing shows no signs of abating, however, a wave of regulation could also be on the way, Jablonski warns. Many social web celebrities would disguise paid advertisements as personal recommendations. This is a thorn in the side of the U.S. Federal Trade Commission in particular. In the future, the agency wants to take more measures to ensure that influencers transparently label advertising as such. (pte)
