With some estimates predicting a global market of $604.5 Billion by 2027, the value of social commerce can’t be denied. But there’s one key element of social commerce which tends to be overlooked in the face of high profile social branding: the value of content creators.
It’s not hard to see why. Social media ad spending was estimated at $40.3 Billion in 2020, with the vast majority being the result of heavily branded campaigns from well established entities. And it’s a strategy that’s proven effective to date. Recent data indicates that nearly nine out of every ten US consumers ultimately wind up purchasing from a brand they follow on social media.
But the widespread adoption of social networks as a predominant medium in the 21st century isn’t the result of brands. It’s the result of its users. You’d be hard pressed to find anyone under 30 who can remember a time in which social media wasn’t a primary mode of communication; particularly among Gen Z consumers, now estimated to hold a combined spending power of $150 Billion.
Marketers have long recognized social media’s user driven strength. Influencer marketing is no longer a passing phase, but a quantifiable phenomenon now valued to be worth over $15 Billion by 2022. But the strength of influencer marketing isn’t driven by name recognition. It’s driven by content. Can Facebook’s latest feature turn a social share into a market share?
Instagram and the Advantage of the Nano Influencer Market
Facebook and Instagram are by far the two most significant players in social commerce, with the latter being bested only by YouTube in contributing to the rise of influencer marketing. Yet influencer followings don’t always equal engagement. Instagram may have grown by some 76 million users during the third quarter of 2020, but the briefest scan of the platform reveals that the highest levels of engagement typically belong to established accounts already in the media spotlight—a factor consistent with traditional advertising models.
Digital marketing breaks from traditional advertising by focusing on the end user, not the brand. It relies on both relatability and resonance for success. And that’s particularly true of influencer marketing. Its strength is built on connectivity; and for many new brands, marketing through nano influencers with under 10,000 followers isn’t just a realistic option. It’s a successful one, drawing an estimated 4 percent engagement rate; one of the highest shares in social commerce.
That level of engagement is a market which Facebook, Instagram’s parent company, is hoping to draw upon. Earlier in April, Facebook CEO Mark Zuckerberg announced plans for Instagram to develop an affiliate program allowing creators to monetize content through product recommendations as well as a marketplace connecting influencers with brands.
While social commerce has garnered focus increased from marketers in recent months (with Twitter and TikTok both developing shoppable features), Instagram’s claims their proposed affiliate marketing program is specifically geared towards nano and micro influencers—a segment frequently overshadowed by high profile social media celebrities who may draw millions of followers but fail to connect with their audience on a personal level.
Instagram has yet to disclose details about their new affiliate marketing feature, including how much content creators can expect. But they’re insistent their goal is to help smaller influencers thrive in what is becoming an increasingly crowded market.
"If we can help with matchmaking, we can help drive more dollars to the smaller creators who can do amazing work for brands," said Instagram co-founder Adam Mosseri during a live streamed video call with Zuckerberg posted in April.
Instagram and the Creator Economy: Too Little, Too Late?
While affiliate marketing has long found a welcome home on Facebook, there’s a tremendous gulf between branded content marketing and organic user generated content. And that distinction is the result of monetization; ironically, one of the key drivers behind the emergence of the creator economy.
It’s been estimated that the average nano influencer can earn upwards of $90 per Instagram post. But monetized influencer campaigns can suffer from one critical disadvantage: disingenuity. Affiliate posting may result in short term sales but it can ultimately affect a brand’s long term reputation. Traditionally, influencers have drawn upon their own communities to create demand while followers maintain an almost fanatical reverence based on a sense of authenticity. Monetization removes that authenticity, transforming the influencer from a content creator into a paid spokesperson.
As Instagram continues to evolve, the influencer market suffers from the threat of oversaturation, leading to fatigue—and in some cases, manipulation and outright fraud. The result can be a certain disparity between the impact of the influencer and the value of their content. But the average social media follower is shrewder than many marketers tend to realize. And they’re likely to abandon an influencer altogether if they show the slightest hint of a lack of accountability and legitimacy.
There’s a world of difference between a hard pitch and building a long term relationship. The success of the latter is based on accessibility, not advertising. Let your brand reflect your audience, not your campaign strategy.
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