How Social Media Influecers impact marketing

Source: Crobox

The economic principle I’m exploring is “people generally respond to incentives in predictable ways.”

 My research question to help me study the economic principle is “How do social media influencers impact marketing?” The article “Under the Influence: The Psychology of Social Media Influencers” written by Jelle Fastenau and published by Crobox demonstrates this economic principle by arguing social media influencers make marketing easier, cheaper for production of the advertisement and cheaper for advertisement space.

 First, a company sponsoring a social media influencer does less work with getting either the same or better results. Jelle Fastenau states, “They already have a large following at their disposal, which can be easily tapped into by sending out a message endorsed by a popular figure whose opinion they actually want to hear.” I think this is very important because all companies have to advertise or else they go under the radar. Also, the company doesn’t have to come up with a line by line script for the influencer, they just need to tell the influencer what to highlight.

 Second, using influencers is the cheapest because companies have huge advertising budgets for paying advertisements and when they use social media influencers they get to pocket hundreds of thousands of dollars. For example, if a brand want to do a campaign, they have a choice to use influencers or a traditional media campaign. When they do a traditional campaign, you have to hire and pay a team to plan the campaign. Once the team is planned that company has to pay for other expenses such as equipment, producer, studio space, videographer, photographer, models, hair & makeup for the models, editor and assistants. Paying all of these expenses could cost a company around $300,000. Also, the company doesn’t have to hire a team to create a scripts because the company trusts the influencers review to be effective.

 Third, in addition to all production expenses, the company has to pay for advertising space were only a few seconds on big networks costs hundreds of thousands of dollars. All of this could result to over $500,000. However, if a company decided to use an influencer, then they don’t have to pay for any production expenses saving them hundreds of thousands of dollars. In my opinion, it is an obvious decision that a company should choose a social media influencer to advertise their product because the influencer has already done all of the work to create a strong dedicated following that insures millions of views each video.

 In my next blog post I will research the question: Why is social media influencer advertising more effective?