Influencer-led marketing strategies have monopolized retail for years, with the highly aesthetic content dominating Instagram feeds worldwide.
Inspired by grassroots marketing, influencer-led strategies eschew shouting taglines from the rooftops in favor of reaching consumers through channels they trust. The strategy’s initial strength was in its ability to produce authentically unpolished, organic-seeming imagery and testimonials from lifestyle bloggers and other public (yet un-famous) figures.
Over the past few years, though, the market has become completely saturated with sponsored content. Agreements between brands and influencers aren’t thoughtful relationships forged through mutually held values or even aesthetics. Instead, brands are reaching out to anyone and everyone who will agree to hold their product on a beach at sunset for a fee.
Consumers caught on to the trend years ago, but now, it appears, they’re finally tired. “Between the Fyre Festival documentaries, rampant fraud via purchased followers and engagements… influencer marketing has received a somewhat shady reputation in colloquial conversations this year,” said analysts at InfluencerDB in a recently released report.
“Engagement rates have steadily dropped over the years and recently reached a plateau,” the firm’s director of marketing, Mona Hellenkemper, confirmed, adding that the decline began in late 2016.
Unfortunately for brands, the shift in consumer appetite parallels an uptick in spending on these strategies. Companies are diverting more marketing money to influencers than ever before, just as their engagement levels are waning.
According to the report, the Like Follower Ratio or LFR (which represents the average number of likes on each post in proportion to the number of followers on an Instagram account) has been consistently decreasing across the board year-over-year.
For fashion influencers, the LFR dropped from 5.3 percent in 2018 to 3.5 percent in 2019. Lifestyle influencers experienced a similar decrease in LFR, from 5.4 percent in 2018 to 3.6 percent in 2019.
An influencer’s popularity doesn’t guarantee more eyes on a post. Instagram accounts with more than 10,000 followers generally have about the same LFR across the board. Whether they have thousands or millions of followers, engagement hovers between 3.5-3.8 percent.
Interestingly, accounts with between 5,000 and 10,000 followers have a much higher LFR of 6.3 percent. Accounts with between 1,000 and 5,000 followers have it even better, with an 8.8 percent LFR.
While it would seem the consumer is gravitating toward influencers with smaller followings in an attempt to recapture a degree of authenticity, sponsored posts still tend to perform better than un-sponsored posts. InfluencerDB attributes this trend to a number of factors, like the platform’s algorithms giving precedence to paid content, and influencers putting more effort into those posts as well.
Despite the industry’s dulling influence, InfluencerDB said there’s opportunity to be found for some. “Nano-influencers,” or those with smaller follower counts, may be the next frontier for brands looking for truly impactful content.
The shift away from “massive celebrity endorsements” also makes the influencer marketplace “more alluring and accessible to small businesses than ever before,” said InfluencerDB.
Direct-to-consumer brands and startups can afford to work with nano-influencers—themselves small business-owners—on more targeted, specialized content. And from a data perspective, they’ll get more bang for their buck.