New Zealand's influencer marketing industry is booming and experiencing its second wave of exponential growth, according to an inaugural report canvassing the sector and its impact on traditional marketing.
The average influencer marketing campaign spend in this country has doubled year-on-year over the past three years. The spend by brands in the past year alone has increased from $6600 to $11,700 per campaign. This is predicted to exceed $20,000 by 2020.
Influencers in this country earn an average of $780 per social media post.
The price per post fluctuates between $50 and $20,000 depending on the size of an influencer's following and follower engagement metrics, with Instagram crowned as the highest-earning platform for influencers based in New Zealand.
The Ultimate Guide to Influencer Marketing in New Zealand, conducted by New Zealand's largest influencer marketing agency The Social Club using data from more than 3000 campaigns last year, found increased sales and brand awareness were the top reason companies engaged in influencer marketing.
Georgia McGillivray, chief executive of The Social Club, said the potential earnings per post has not increased in the past year, as brands were moving towards preferring smaller influencers to generate sales and brand awareness.
"Instagram is the top platform for influencer marketing in New Zealand, followed closely by Facebook, and then blog posts, then YouTube and Snapchat. However, we're also keeping an eye on some of the new up-and-coming platforms like TikTok and looking for ways to engage those platforms as well," McGillivray said. "It's going to be interesting over the next 12 to 24 months to see what new platforms come on to the scene."
Her pick is TikTok will become the next social media platform for influencers to earn big bucks on as Facebook continues to fall out of fashion with millennials and younger generations. "It's really captured quite a young audience and it's a really engaging way to post content.
"Instagram has also done a really good job over the last 12 to 18 months of developing their platform for different forms of content that the younger generation is becoming more and more interested in. For example, Stories is a core part of their platform now, which wasn't there 18 months ago.
"They've just introduced Instagram TV as a landscape format as well so I expect that to take off and influencers to use that more and more in campaigns."
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Video content is generally seen as "more valuable" than a photo by many brands. A post of an Instagram feed was more expensive than a Story, but an Instagram TV post would be even more expensive again, she said.
McGillivray said the rise of influencers globally was the result of a change of consumption. For example, millennials were now spending far less time watching linear TV and more time on social media.
"Previously, when you were looking to buy a new pair of shoes you would go to your favourite brand's e-commerce store to see what they have available. Now, we turn to our peers or our influencers to see what shoes they are wearing and we look to them to influence purchase decisions," she said.
Brands were shifting to where their consumers were, and influencer marketing was an "affordable way" for brands to authentically speak to an audience, she said.
The return on investment for brands engaging in influencer marketing was significantly higher than traditional forms of marketing such as TV adverts or in magazines, McGillivray said.
New Zealand's influencer community doubled in size between 2018 and 2019. Today it sits at more than 10,000 influencers.
Forty nine per cent of brand surveyed in the report said they were looking to capitalise on the influencer marketing wave and increase their budgets this years. About 24 per cent said they intended to keep their influencer spend consistent.
More than a quarter of brands intend to spend over a third of their total marketing budget on influencers in the coming year, the report outlined.
While the average consumer scrolling through Instagram would expect influencers with millions of followers to be seen as most valuable for companies working with them, this is not necessarily that case, said McGillivray.
Nano influencers - those with between 1000 and 5000 followers - on social media, and micro influencers with between 5000 and 15,000 followers are the now the preference for companies looking to engage in influencer marketing, the report found.
These influencers make up more than half of all influencers in the industry, the report outlined. "Nano and micro influencer communities are the ones that they are getting really good results right now," McGillivray said. "Their profiles aren't saturated, they are not working with that many brands, they are really excited about the opportunity and they will go over and above.
"Their followers are usually one step less removed; friends or friends of friends, so it is more of a peer-to-peer review than it is a celebrity endorsement," she said.
"The macro influencers, there's still a place for them, and they can perform really well on brand-awareness campaigns, but the real benefit of working with nano and micro influencers is their communities are really engaged - their engagement rates versus macro influencers is double, plus some."
The report found that many influencers in 2018 had grown their following enough to make it a full-time job.
The global influencer marketing industry is predicted to be worth US$6.5 billion by the end of the year. It was estimated to be worth $1.7b in 2018.
Businesses operating in the fast-moving consumer goods space, along with automotive and tourism, were industries heavily investing in influencer marketing. Telcos and insurance companies were also starting to enlist the help of influencers for their marketing.
The industry in New Zealand was "booming" and showed no signs of slowing down anytime soon, McGillivray said.
A rising trend within the market was "influencer generated content", she said. "It is the idea of getting an influencer to create your content rather than employing a marketing agency and a creative director and producer to shoot footage. A lot of brands are getting a lot of influencers to do that - not to post on their own channels - but to create the content for the brand's digital channels."