Influencer marketing facts for kids

Chiara Ferragni is a fashion influencer and blogger known for her sponsored fashion posts.

Influencer marketing is a type of marketing where companies work with popular people or groups, called influencers, to promote their products. These influencers are often seen as experts or have a lot of social power in their field. They share original content, often paid for by brands, on social media sites like Instagram, YouTube, Snapchat, or TikTok. When a brand partners with an influencer who has a strong following and trust, the influencer talks about or shows the brand's product in their posts. This can feel like a friend recommending something they like.

How Influencers Affect People

Influencers can affect what people buy and how they act. It's not just about telling you to buy something. It's more about how people in a community interact and share ideas, which can encourage others to try new things or buy certain products.

One way influencers affect people is through something called social comparison theory. This means people might compare their own lives to the seemingly perfect lives of influencers. They might see influencers as having ideal lifestyles, interests, or fashion sense. Because of this, buying the products an influencer promotes might seem like a quick way to get that "perfect" lifestyle. Studies show that some people, especially those with lower self-esteem, might compare themselves to influencers and see the influencers as having a higher status. This can sometimes lead to advertising that isn't completely fair.

Many young people from Gen Z (those born roughly between 1997 and 2012) think that being an influencer is a good career choice.

What is an Influencer?

There isn't one single definition for what an influencer is. Some say they are "third parties who have power over a company and its potential customers." Others define them as "a third party who greatly shapes a customer's buying choice but might not be responsible for it." Another idea is that influencers are "well-connected, make an impact, have active minds, and set trends."

Just because someone has many followers doesn't always mean they have a lot of influence over those followers. But, research shows that if a company spends 1% more on influencer marketing, it can lead to about a 0.5% increase in how much people engage with their brand.

Finding Influencers

Companies use special research methods to find the right influencers. They look at different things to figure out how much and what kind of influence someone has.

• Activists get involved with groups like their local communities or charities.
• Connected influencers have very large networks of friends and followers online.
• Authoritative influencers are people others trust a lot.
• Active minds are interested in many different things.
• Trendsetters are usually the first to try new products or ideas.

Types of Influencers

Influencers are often grouped by how many followers they have on social media. This ranges from huge celebrity endorsements with millions of followers to smaller content creators who have a very dedicated group of fans.

• Nano-influencers: These influencers have between 1,000 and 10,000 followers.
• Micro-influencers: They have between 10,000 and 100,000 followers.
• Macro-influencers: These influencers have between 100,000 and 500,000 followers.
• Mega/Celeb-influencers: These are the biggest influencers, with more than 500,000 followers.

Companies are often willing to pay influencers more because many customers try to avoid traditional ads. Working with influencers helps companies reach people who might otherwise ignore their marketing messages.

It's also important for a brand to pick an influencer who fits their product. For example, a shampoo company might choose an influencer with great hair. Or a brand with bright, bold products might pick an influencer who has a flashy style. Matching the influencer's personality and style with the product's purpose and mood is very important for success.

How Influencers Get Paid

Most influencers are paid either before a marketing campaign starts or after it finishes. The amount they get paid can change based on how many people they can reach, how much they will promote the product, and how well their past promotions have done.

Very famous influencers and celebrities can get hundreds of thousands or even millions of dollars for just one social media post. Besides money, they might also get free products or services. While big influencers get a lot of attention, only about 4% of all influencers earn more than $100,000 a year. For influencers with fewer followers, free products or services might be their only payment. Companies are increasingly finding that influencers with a smaller but very loyal fan base can be a smarter way to spend their marketing money.

How Influencer Marketing is Used

Marketers use influencer marketing to build trust for their brand, to get people talking about their products, and to increase sales online or in stores. They use the trust influencers have built over time to promote many different products or services. The success of influencer marketing is measured by things like how much attention the brand gets, how many people see the posts, and how many sales are made. In 2024, about 86% of brands around the world planned to use influencer marketing.

An influencer's personal brand and how well they connect with a product are key. When trusted influencers promote a product that truly fits them, customers are more likely to believe their recommendations. Studies have shown that people see influencers as a neutral voice for a product. Compared to a company's CEO, influencers often seem more friendly and trustworthy. Customers are more likely to listen to influencers if they feel they share similar interests or beliefs.

A 2015 article showed that 77% of shoppers would or might act on recommendations from family, friends, and online reviews. This means that word-of-mouth marketing and digital media have greatly changed how much endorsements can affect people.

Rules for Influencers

In the United States, the Federal Trade Commission (FTC) views influencer marketing as a type of paid endorsement. This means influencers must follow rules about being honest in advertising and clearly telling their audience if they are being paid or given free products. These rules are called the Endorsement Guides.

The FTC has created an easy guide for influencers to understand how to make good disclosures on social media. These rules include:

• Making sure sponsored products are clearly visible and hard to miss.
• Using simple language that everyone can understand.
• Giving honest reviews about any sponsored products.

In 2017, the FTC sent over 90 letters to famous people and athletes who were influencers. These letters reminded them that they must clearly tell their audience about any business relationships when promoting products. The same year, the FTC took action against two YouTubers who had falsely promoted an online gambling site they owned. The FTC used law enforcement, warning letters, and updated guidelines to make sure influencers understood how to follow the laws.

Other countries, like Australia and the United Kingdom, have also created similar guidelines for influencers to follow. The UK's Financial Conduct Authority has even warned "finfluencers" (influencers who talk about money and investments) that they could face legal trouble if they don't include the necessary risk warnings for financial products.

Virtual Influencers

Virtual influencers are computer-generated characters that are designed to look like real people in real situations. While some of these characters clearly look like computer graphics, others are so realistic they can trick users. These virtual characters are often presented as models, singers, or other celebrities. Their creators write their life stories, do interviews for them, and act as if the characters are real people. For example, Lil Miquela was a very realistic virtual influencer who made many people curious until it was revealed she was created by advertisers.

A study from 2022 showed that more than half of people in Chile have never bought products recommended by influencers.

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