Micro-Influencers Are the Next Big Thing, Says Report

Pay Attention to Gen Z

Millennials and Generation Z are expected to represent more than 40 percent of the overall luxury goods market by 2025, according to a Deloitte survey cited in the report.

While nearly 78 percent of respondents said millennials (ages 24 to 38) were their target audience, a little less than 7 percent were focused on Gen Z (ages 6 to 23).

 For the luxury industry, Generation X is “a completely forgotten target”, according to the report.

Companies overall are paying less attention to Generation X (ages 39 to 53), with interest dipping by 4 percent.

Instagram Is the Place to Be

Instagram is the most relevant social media platform for influencer marketing, according to 46 percent of respondents, up from 36 percent last year.

Facebook landed in second place at around 16 percent, followed by YouTube at 14 percent. Twitter, LinkedIn, Snapchat and Pinterest were all in the single-digit percentages.

Breaking it down by format, 40 percent of respondents found that images showing up in a user’s feed were the most effective, followed by Instagram Stories at 32 percent.

The report expects these two features to continue to grow in popularity as Instagram rolls out Checkout, an in-app shopping feature.

Influencer Marketing Budgets Are Growing

Nearly 50 percent of professionals surveyed said they spent more than $10,000 per year in influencer campaigns.

More than 60 percent of respondents said their marketing budgets will continue to expand to finance even more campaigns.

“The increase in budgets, resources and effort dedicated to influencer marketing are justified by the results brands have been obtaining over the last few years,” said Launchmetrics CEO Jaïs.

By industry, 22 percent of luxury professionals claimed to spend more than $100,000 per year on influencer marketing, compared with around 9 percent in fashion and 8 percent in beauty.

A majority of the fashion, luxury and cosmetics professionals surveyed pay influencers for their work, with 21 percent answering “always” and 30 percent answering “frequently”.

Paying influencers is becoming increasingly vital, with nearly 70 percent of influencers surveyed listing monetary compensation as their top motivation.

Influencers were most interested in monetary compensation and producing valuable content, with exposure and free merchandise falling farther down the list.

Measuring ROI Is a Challenge

Survey respondents said the main challenge they face with influencer marketing campaigns is the inability to measure the campaign performance.

Not knowing which key performance indicators to look for, or how to measure them, also contributes to the fourth-place concern: ROI justification, or backing up the amount being spent on influencer marketing to upper management.

The indicators to pinpoint can vary by campaign, said Cristiana Monfardini, Fendi’s chief communication officer.

“With the ‘F Is For … Fendi’ [campaign] we measure the success of our initiatives through online and offline engagement with our audience. All our content is 100 percent organic to stay true to our community,” she said.

The report recommended using technology and software instead of manual methods to assign a monetary value to social engagement.

For example, its Media Impact Value tool, a proprietary algorithm developed by Launchmetrics, measures the impact of placements and mentions across different influencers based on reach, media rates, media quality and content quality.

“A campaign shouldn’t be measured on likes and comments alone, but through true metrics like sales, brand perception and conversion propensity,” said Chris Davis, head of brand partnerships at Gleam Futures. 

The report pointed to the three-day wedding of Italian blogger and influencer Chiara Ferragni (“The Blonde Salad”) and rapper Federico Lucia, better known by his stage name Fedez, as a prime example of how lucrative influencer marketing can be and how to assign monetary value to engagement.

Ferragni, who was named Forbes’ Top Influencer in 2017, generated an estimated $36 million in media impact value through her wedding posts, garnering 67 million post interactions.

The wedding hashtag, “#TheFerragnez,” generated more than $8 million in media impact value for brands, according to the report.

“These [metrics] can be hard to track but we as an industry are getting closer to making this type of measurement standard practice,” Davis said.