As social media platforms grow in popularity, more and more brands align themselves with TikTok and Instagram influencers to market their products to a wider audience.
The majority of the brands have been targeted towards younger generations, however there has been a rise in luxury brands on social media, especially in the beauty, fashion and travel industries.
The global influencer marketing market is estimated to be worth $US24 billion.
So what is influencer marketing and how can it be leveraged to help a brand's success?
What is it?
Influencer marketing harnesses the power of the social media personality the company partners with to sell to its audience.
There are many key differences between influencer marketing and traditional celebrity endorsements. One such difference is the connection between the influencer and the audience.
Since influencers often create careers around their personalities, consumers view them as more authentic and relatable figures. This is due to the direct engagement between the creator and their audience.
“Many younger, and digitally savvy segments see celebrities as more inauthentic “crafted and created” personal brands and often believe social media influencers to be more relevant and realistic,” Deakin University associate professor of business and law, Kerrie Bridson says.
Another major difference is cost efficiency and impact type. Influencers often create more cost-effective campaigns in a shorter amount of time, whereas celebrities are often locked into longer contracts for higher prices.
“Traditional campaigns could lock brands into medium and long-term contracts the opportunities for a shorter term and flexible “fast” arrangements with micro-influencers offer marketers a degree of flexibility not unlocked in the past,” Bridson says.
Successful luxury partnerships
Many luxury brands have begun to use social media influencers to endorse their brands.
Bridson says this move is being made by these brands as a complement to their more traditional marketing efforts. The product also appeals to a younger and more tech-savvy audience.
“Luxury goods like any brand seek to engage deeper with their current customers as well as seeking to attract new customers,” she says.
“I think what is exciting in this space is that social media marketing collaborations enable luxury brands to align with interest group followers of a social media influencer and this is quite different to appeal to mass celebrity fan bases of traditional co-branding activities and endorsement campaigns.
“Never underestimate the human factor of a social media influencer and the power of personal brand alignment for luxury brands that together can create campaigns that promote exclusivity.
One brand that has benefitted from social media marketing is Burberry. After feeling pressure in 2009 with their revenue growth dropping from 18% and 15% in the previous two years, they decided to pivot and use their followers as well as as their audience and influencers.
Through this, they got their name out there, while cultivating a loyal audience for their luxury clothes.
“Beyond social media influencers, it is Burberry’s followers themselves who have been effective brand ambassadors for them,” Bridson says.
“They make amazing use of both social media influencers and the brand's own follower's user-generated content.
“From posts on X, and Instagram to Discord conversations we have tracked increased online introduction and engagement with new merging audiences through digital campaigns.”
Another viable option for brands, particularly for travel brands is influencer trips. This is where a group of social media influencers will be sent to a location to create posts and endorse the product.
An example of this is Amra and Elma’s campaign for Bvlgari Hotels. In their campaign, they sent some of their top influencers to Bvlgari Hotels in their three most popular locations: Milan, Dubai and Bali. From there, influencers documented their trips to share with their followers.
The campaign estimated two million impressions per location with the influencers using InstaStories and posts to raise location awareness and experience.
Challenges with social media influencer marketing
While brands have had success when using influencers for their marketing, Bridson claims there is also a “dark side” to this strategy.
This mainly surrounds transparency laws on the part of the influencer. Disclosure laws in Australia state that when an influencer promotes a product, they must disclose that they are getting paid or that the product was a gift. They must be sure.
Failure to adhere to these laws will have legal consequences and impact consumers' trust in a brand or influencer, according to Bridson.
“It places brands in peril of crisis recovery management if they are found to breach laws. The risk to reputation is high,” she says.
Bridson also says this is extremely significant for an influencer. They may also not want to partner with certain brands or fail to disclose partnerships due to the fear of appearing a “sellout”in their followers' eyes.
“Followers are a tricky fan group for social media influencers so they risk their followers leaving or even campaigning against SMI’s and brands they deem to have “sold out” their authenticity and integrity, their moral compass purely for financial gain,” she says.
And for luxury brands in particular, who they choose to partner with is of the utmost importance to maintain an exclusivity reputation.
“The alignment between luxury brands and social media influencers can backfire if it dilutes consumers’ perceptions of the brand's exclusivity,” Bridson says.
“It is a fickle consumer market where potential negatives can often outweigh the gains if campaigns are not carefully designed, managed and monitored for outcomes and impact.”