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Joe Sinkwitz is a featured contributor to Influencer Marketing: Where the Tactic is Headed and Trends to Support It report.

Here's the complete contribution:

The next 5 years are going to be full of rapid change for the influencer industry. Let's look at a few trends that will impact vendors in the space.

Rapid growth of the influencer marketing industry

From our own data we've seen the total population of vendors jump from under 100 in 2015 to well over 300 in 2017, with some margin of error expected in underestimating the sum total of networks in existence. What does this mean though? With rapid growth of any industry also comes inevitable consolidation. Niche players that focus on single categories on a single network and via single mediums that connect to those networks (iPhone apps for Instagram for fitness enthusiasts as an example) are inherently fixed in their overall growth to both platform and medium bandwidth -- any changes in popularity of a device, of network, or trend within the category would have dramatic impacts on sustainability of the model and thus force consolidation.

 Venture capitalism (VC) will expect a return soon

the money was raised somewhat easily when the trend was steep, which means that with the extreme popularity of influencer marketing right now its co-option by somewhat generic online marketing firms that are willing to constantly redefine their product from SEO -> content marketing -> inbound marketing -> influencer marketing took place for capital considerations. As the boom of enthusiasm gives way to reality, many of those players will attempt to redefine themselves and shed underdeveloped assets.

Focus on ROI

Not all the trends are dire by any stretch; the demand for influencer marketing services is very real. Brands and their agencies are recognizing the ROI returned when executing properly on the correct buyer personas. However, mastering the pitches to those personas is higher than that of traditional social advertising, so budget continues to increase. Those vendors that continue to iterate on their product to ensure ROI is being delivered will continue to benefit from this growth.

Compliance

Compliance in the marketplace will be adopted, reluctantly at first and wholeheartedly after digesting the impact on the bottom line.

  1. One of the reasons influencer marketing's future is so bright has to do with ad blocking. Consumers have become wary of obtrusive and persistent advertising, which has led to blocking ads by default; however, consumers do not typically block the individuals they follow on social networks -- instead, they rely on personal recommendations, leading to a vacuum of potential reach being served by influencers. Thus, even labeled compliance won't be a drag on reach given the ads as content are sought out content.
  2. The other factor playing into why compliance will negatively impact bottom line is entirely data driven. Our own data on the matter seems to indicate some level of consumers understanding already that some products are being mentioned for monetary reasons. The disclosure of the relationships is more a formality -- in evaluating click through rates of disclosed vs non-disclosed influencer posts from our network, we have not been able to see a material difference between the two (once accounting for viral outliers). Therefore it is our conclusion that while disclosure requirements may be resulting in grumbling at the present, in 5 years it will be embraced more fully given the legitimacy it offers and oversight legitimacy that larger brand legal counsels need to see.


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