While it’s commonly said that influencer marketing hit the mainstream in 2016, there are equal numbers of articles discussing the backlash against this style of marketing from the same period, although if you look at the digital ad spend for 2016, influencer marketing doesn’t even tick the meter http://www.oftwominds.com/photos2017/digital-adverts1.gif though people were simultaneously touting it’s mainstream adoption and downfall. From that point we’ve seen steady growth. In the equities market we call that ‘Climbing the Wall of Worry’ – the concept that the frequent active discussion creates a mild volatility but more importantly, keeps the subject of that discussion top of mind for investors, so we see an inevitable growth; the alternative being a lack of worry, less discussion, and the subject falls off the radar for investors, or in this case advertisers.
We’ve seen the same phenomenon in other forms of online advertising. Going back to the early 2000’s we saw discussion of the demise of banner advertising, with the rise of contextual search advertising. What was in fact happening was publishers were seeing massive repricing of banner advertising inventory and throwing a fit. Eventually, the market stabilized with meaningfully contextual hybrid in-place advertising, still at a significantly lower CPM. Again, once advertisers had meaningful performance data on which to calculate their true ROI, there was a backlash causing Google to almost completely abandon their CPM advertising pricing in favor of CPC.
To further compensate, we saw the emergence of advertorial content, where there was an almost immediate backlash – often from traditional editorial writers – yet this form of marketing has survived and stabilized as a mainstream approach – to such an extent in fact that the New York Times has doubled down on that approach pioneered as a core business model by Buzzfeed https://www.recode.net/2017/6/21/15842732/code-commerce-ben-kaufman-buzzfeed-david-perpich-wirecutter-new-york-times
More recently, now that we’ve got over a decade of search advertising ROI data, we’ve seeing major brands P&G and Restoration Hardware fleeing search advertising as having an ROI near zero http://www.zerohedge.com/news/2017-09-11/startling-anecdote-about-online-advertising-restoration-hardware for them. It’s worth pointing out here, that the problems experienced by these brands were of their own making as they were arguably using search advertising ‘incorrectly’ as a substitute for proper SEO – the fact that Google has effectively crushed all innovation in the SEO space is a discussion for another time.
With the benefit of hindsight, we can now see that banner advertising – despite all it’s early naysayers – survived until around 2010 as a viable business, when advertorial content became preeminent, with the accelerated adoption of mobile devices. The 2016 election was potentially the height of advertorial content (meaning the NY Times may have bought Wirecutter at the high) which brings us to influencer marketing. As this marketing style ‘hits the mainstream’ much as occurred with search advertising, and banner advertising before it, with a meaningful quantity of historical performance data, we see (and I predict, will see further) repricing of influencer compensation to more accurately reflect the ROI they bring and along with it, influencers crying foul, as the easy money disappears from the market space. Still, influencer marketing will continue to climb the wall of worry, at least until it warrants a significant enough spend to appear in digital ad spend analyses and until mobile video is supplanted with another preeminent medium – likely Augmented Reality, where we’ll likely see the re-emergence of content branding and contextual competitive vendor positioning, or hopefully a new and innovative advertising approach, to which consumer will be less sensitized.