The Influencers: An Evolving Industry

NEW YORK— Influencers, said Holly Hamann, founder and chief marketing officer at TapInfluence, are a group of people who started out for the most part as bloggers and the mostly female pioneers had topics of interest rather as initial motivation.

“They wanted to share a journey, share tips, they started building their own communities of people,” Hamann said. “All of a sudden, when bloggers were getting 50,000 unique visitors a month, someone came to them and said, ‘I can run an ad on this blog.’ Now, you had bloggers who could make six figures because the traffic was so high. That’s starting to shift. There are no banner ads on mobile sites. And, as other platforms popped up, advertisers realized that banner ads generate impressions but don’t create influence.”

As social media participants developed big followings on platforms such as Twitter and Pinterest, marketers had to figure out how to use vehicles incompatible to established online advertising. Yet, the content producers and the marketers realized that many social media participants were building audiences that had marketing potential, Hamann said.

Bloggers emerged as influencers as social media expanded and marketing opportunities with it. Organizations such as TapInfluence, Influenster and Village Green Network, among others, launched as a consequence. Their mission has been helping marketers find influencers without having to do endless Google searches for those social media notables with audiences suitable to their messages. Each, in a somewhat different way, links marketers with suitable social media content providers and helps to ensure that overly aggressive marketing doesn’t erode the value of the process, although their approaches contrast.

“With influencing, the challenge is to build up a brand in a way that doesn’t undermine the authentic relationship with the audience. The [audience]needs to know when the influencer is being compensated,” Hamann said.

Consumers, particularly younger consumers, aren’t put off by the idea that their peers are compensated for social media efforts as long as they are informed about any reward relationship, she noted. In social media, many observers agree, Baby Boomers are the demographic group that is most skeptical of online content and suspicious of commercial entanglements. Younger consumers, in contrast, expect financial relationships to develop in that they have grown up with the notion of online entrepreneurship as a career option and, often, an attractive one.

As the Internet has become more established, consumers accepted digital advertising on their favorite sites and the idea that a blogger or someone they follow on Twitter, for example, might get a free product or concert pass to prompt a tweet. That acceptance, however, requires that an influencer inform followers about what the content provider receives from a marketing partner, and that subsequent evaluations are consistent with what has come before, Hamann said.

Many, and especially younger consumers, “are looking for useful information, and they don’t care where they get it from as long as it’s authentic to the influencer,” Hamann said. “They don’t care when the content is authentic and transparent. They still consider the content to be valuable. Championing brands and not disclosing can erode confidence.”

She added that the interest social media advertising is drawing from the U.S. Federal Trade Commission is “interesting.”

The FTC response to consumer feedback, including its effort to update endorser guidelines, demonstrates that the audience and regulators do value social media and the influencer community as its role has advanced, and that they will respond to protect them.     —By Mike Duff