Marketing Manager


The Great Influencer Bubble: The Rise and Fall of the Instagram Influencer


We are a few steps away from a tremendous fallout of the Instagram Influencer. As brands and advertisers traded likes for cash and travel vouchers for influence, the average consumer is feeling the burnout. Soon this house of cards will come tumbling down and advertisers will be the ones to pay.


The Rise

The first influencers could be traced back to the 1800s with the launch of spokespeople to humanize new brands and inspire an audience to purchase. In the late 1800s, Aunt Jemima was a caricature of a black woman used to sell premixed baking goods, in the 1920s it was jolly Old Saint Nick to sell Coca-Cola during the holiday season, and in the1950s it was the Marlboro Man selling cigarettes to (wannabe) rugged men.

As television emerged these canned characters were soon replaced by the celebrity spokesperson and product placement. Ray Ban sold 50% more Wayfarer sunglasses after Tom Cruise wore them in Risky Business, Mini Cooper increased sales by 33% after their feature in the 2002 movie “Italian Job,” Pepsi sales soared to $7.7 billion after Michael Jackson’s Pepsi Generation commercial.

In 2010 the world was a different place, Facebook had only 150MM daily users and Instagram had just arrived to the app store. In the early years of social media adoption, consumption rates skyrocketed. We were programmed to scroll, like, follow, comment, share. In this endless loop of feedback, new celebrities and spokespeople emerged.

Social media connected a new audience to content and enabled an unprecedented level of participation, anyone with access to a smartphone could create their own content and establish influence within a niche audience. The daily check-ins and updates created the demand for more content: daily content, authentic content.

Soon, the spokespeople we trusted to advocate for products were the average Joes and Joans we saw in our feed every day. We would believe them when they said this product is best, or this look is in style, or this tool gets the job done. And brands took notice.


The Price

What makes influencers influential? At first, an influencer’s influence was measured by follower count: the higher the follower count, the larger the influence. Then it was measured by engagement (likes, follows, shares, clicks, comments), but this is problematic because do engagement on social posts actually increase the bottom line?

Studies show that 67% of marketers think influencer marketing campaigns helped them reach a more targeted audience, thus leading to more impactful results. According to HubSpot, 71% of consumers are more likely to make a purchase based on a social media reference. On average, businesses generate $6.50 for every $1 invested in influencer marketing. But, at what cost?

Long gone are the days when influencers would promote a brand for free product or travel if they really believed in it.  Kim Kardashian allegedly charges over $250,000 for a single Instagram photo. According to Digiday’s rule of thumb: brands and advertisers should pay influencers an average of $1,000 per 100,000 Instagram followers. But are followers the only measure of influence? What about engagement? What about website traffic? What about brand lift?

Strategic brands and advertisers began to consider their ROI, set clear KPIs, and set expectations for the quality of content. They began to raise the standards of influencer marketing and determine if influencer campaigns will generate a reliable return in the long-run.


The Strange

In 2017, we hit the tipping point.

In 2017, Ja Rule and his entourage of influencers (including Kendall Jenner, Bella Hadid, and Emily Ratajkowski) promoted Fyre Festival through stylized videos and Instagram ads. For the low, low price of $12,000 festival-goers assumed they would see A-list musical performances, lounge in private villas, eat gourmet food and receive white-glove treatment. Needless to say the glitzy promise land was full of canceled acts, muddy waters, disaster relief tents, white bread and cheese sandwiches, lack of water, no electricity, and a chaotic scramble for flights home.

In 2017, influencers could even be furred, four-legged, ring-tailed or even scaled. @MenswearDog is a stylish Shiba Inu that wears high fashion and makes $15,000 a month. @GrumpyCat scored nearly everything from cat toys, two movies and a book deal. @PumpkinTheRaccoon, a raccoon rescue, now lives a glamorous raccoon life as a lifestyle influencer.

If anyone animal can do it, does the influencer even need to be real? Apparently not. CGI Instagram models @LilMiquela and @Shudu.Gram are both computer-generated, with a combined 1.3 million followers and sport partnerships with brands like Prada and Fenty Beauty. @LilMiquela is 19, lives in Los Angeles, and shares opinions on transgender rights, feminism, and Black Lives Matter. During Fashion Week, she took over Prada’s Instagram. @Shudu.Gram made her Instagram modeling debut and racked up fans like Rihanna who posted a photo of Shudu wearing Fenty Beauty.

Soon advertisers were paying influencers beaucoup bucks for followers (which were fake), engagement (which was low) and product endorsement (which was disingenuous). Influencers could hawk seemingly anything from crystal water bottles, to appetite suppressant lollipops, and butt wipes.

Where does the demand, the oversaturation, the believability and general common sense net out? What wacky world of culture did we create where consumers shell out thousands for an anticipated experience, where pets are the breadwinners in a household, and the existential status of the influencer doesn’t matter?


The Burnout

The world burned out on influencers and here come the lawyers.

Last year, Instagram faced major backlash as influencers snuck product placement into posts without clearly defining it as a paid initiative. How is the general public to know when a beloved lifestyle blogger uses a face cream because they like it or because they were paid to like it? Warner Brothers settled a lawsuit with the FTC over claims that it paid video-game influencers thousands of dollars to share positive reviews of the new game “Middle Earth: Shadow of Mordor” without clear disclosure. Lord & Taylor similarly settled a suit where 50 fashion influencers wore the same dress in posts without disclosure.

Recently major advertisers released pointed strategies for reassessing their influencer marketing plans and some did away with influencers completely. Unilever’s CMO, Keith Weed, announced at Cannes that Unilever will no longer work with influencers who buy followers and stated that as a leader in the ad industry, they will need to “take urgent action now to rebuild trust before it’s gone forever.”

P&G follows Unilever’s lead as Damon Jones, VP of global communications, stated “There’s a more intense focus on ROI. Where we see things delivering results, we’re going to be quick to invest more money in it. By the same token, where we see things not working we’ll be equally as quick to withdraw money.”


The Fallout

In 2018, brands are shaking down influencers over bots, fake engagement numbers, and false followers and consumers are more wary of sell out and disingenuous content. Now is the time to reconsider your influencer strategy. Test and learn, optimize your strategy to what works. Stay clear of influencers demanding free services or products for a post and influencer agencies promising high engagement and new followers. Find the genuine content creators and thought leaders seeking to be experts in their field who diversify their content and work with brands to make smarter, more informed content. Or get out before the bubble bursts and lifestyle influencers adorn every corner peddling a travel selfie for food.

Anastasia Garcia