Blogger's fat ad contracts at risk

Based on a WSJ article.

Online cosmetics maker Ipsy was among the first to pay social media celebrities hefty royalties in exchange for ads on Instagram and YouTube. Today, the brand is again among the first, but among those who curtail cooperation.

Companies will spend billions of dollars this year on so-called influencers promoting their product on social media. Given that there is no way to assess the success of such costs, many companies (especially among the first to master a niche) are wondering if it is worth it.

It all started out as an idea to share your favorite products with your family and friends. Today, big influencers make $ 100,000 per YouTube video and Instagram post. Such sponsored content has become a direct analogue of 30-second TV commercials.

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Looked – unpacking iPad 2019 on YouTube is gaining momentum. It started hard, and then the video accelerated. Actually good iPad, better only 2018 for ~ 21k. ? Or maybe people get the idea that they can conveniently watch all NHL matches in Yandex.Ether. And only there for free + reviews and highlights of matches are available. It's good when you have the option to watch legal content for free. And in the case of the NHL, it's just as important that everything is available on the record. Well, the option with comments is important, you want English for the atmosphere, you want Russian. There are many of our stars in the NHL, there is someone to root for. By default, of course, Washington and Ovechkin. ? In general – if you thought why you iPad, so I found an option. ? And you can watch Yandex.Ether everywhere. There are many interesting things. #advertising

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But there is more and more deception in the influencer market. Many people wind up numbers for themselves, buying subscribers and views in the thousands. Also, many influencers have suffered from their own greed and lost the trust of viewers by advertising products they do not use.

And consumers are not stupid. According to InfluencerDB, so-called engagement ratings are falling this year. People give fewer likes and follow 'links in description' less often. What is happening was described with the phrase: “The bubble begins to deflate.” The same Ipsy is now promoting its products, motivating customers to post positive impressions about the products.

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Shocked ? Have you ever seen such a LARGE one? Does zozi have the largest cashback?

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Of course, advertisers cannot ignore social media. Instagram has over 1 billion active users every month. Mediakix, an influencer marketing agency, estimates the global market for such ads to be between $ 4.1 billion and $ 8.2 billion. For example, in 2015 there were only $ 500 million.

Walmart (a major retailer) this year started adding influencer posts to its site to highlight its range. Unilever, which had already raised the issue of fraudulent traffic cheating last year, has decided the issue radically. The company acquired a stake in a software company that creates software for evaluating the effectiveness of influencer campaigns.

Mediakix says that despite talk of declining efficiency, the influencer market is still growing in value. By about 50% in 2019 compared to 2017. Prices in Instagram range from $ 200 per influencer with 10,000 followers to $ 500,000 or more for celebrities with a million followers.

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For example, now Ariana Grande (singer) is suing a certain company Forever 21 for posting a photo advertising its products, which depicts a girl very similar to the singer and in the same costume as in one of the videos. The singer's lawyers say: Miss Grande has more than 165 million subscribers, and every post with her is worth six figures. The lawsuit claims an amount of $ 10 million.

Akash Mehta, an influencer with 293,000 subscribers, recently received an offer 5 times his standard price tag of $ 2,000. Of course, he accepted the money, but he commented on the situation in the manner that he believes that he is unlikely to be able to bring 5 times more benefits than usual.

Many companies are trying to allocate ad budgets differently. For example, apparel maker GAP invited its customers to post a photo of their favorite brand clothing at Instagram in exchange for $ 150 gift cards.

The issue of deception is very acute. The agency Hype Audi tor examined 1.84 million Instagram accounts and found that more than half had a boost in subscribers. It is sometimes very easy to identify fake followers. For example, it could be a large group of inactive accounts, or an influencer from one country, but he has many followers from another country. Fake, or scam, is cheap. 1,000 YouTube subscribers can be bought for $ 50, and Facebook for $ 34. On Instagram, there are even more bargain prices – $ 16.

According to analysts, the damage from fake followers will amount to approximately $ 1.3 billion this year.

Against this background, traditional media stand out favorably, the audience of which is standardized, studied and evaluated by third-party companies, such as, for example, the well-known Nielsen.

Another cosmetic company, Beautonomy, tried to work closely with influencers. Influencers created their own palettes of cosmetics and promoted them, and they were promised a percentage of sales for this. As a result, the company refused this, since smm stars generated little money. Instead of this program, we decided to just buy targeted ads in Facebook.

H Hub has come up with a different approach. It acts as a traditional advertising agency and connects photographers, videographers and other creative people with brands. Creatives create media content, after which brands buy and publish it on their Instagram.

This approach finds a response, since many companies prefer to maintain and promote their Instagram, rather than pay influencers and get it is not clear what.

WSJ text is very interesting. As usual, what is on the US market will come to us in 1.5-2 years. Write in the comments how you feel about blogger advertising. Do you follow the links in the description, are you glad that the Vikings have been updated? Do you think it's fair that influencers are paid a lot of money for banal posts with links and hashtags? Do you trust the opinion of bloggers? Whose opinion don't you trust? Do you listen to Ariana Grande's songs? Perhaps you are among the 165 million subscribed to her instagram. Tell us how this affects you.

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