Brief:

• Instagram's sponsored posts grew by 44% in the first six months of this year compared to the first six months of last year, according to a report by influencer marketing company Buzzoole cited by the Drum. Buzzoole studied the number of posts with the #ad and #sponsored tags created by social influencers, who can boost a brand's message to a wider audience on social media platforms.
• The report also found that fashion (33%), beauty (13%), and food and beverage (13%) brands were mentioned most frequently, accounting for almost 60% of global sponsored content production.
• More than 559,000 creators worldwide create sponsored content, producing almost one billion interactions with their followers. That means the average engagement per post is more than 1,000 views, according to Buzzoole. The data does not include Instagram Stories, a feature that lets users string together several images and videos into a single post that lasts for 24 hours.

Insight:

Buzzoole's research shows how social influencer marketing is a significant promotional channel worldwide, especially on Facebook-owned Instagram, which has more than 1 billion users. While there have been incidents where social influencers stir controversy and get dropped by brands, social-media stars can wield enormous influence on the purchase decisions of their followers. The firm's findings confirm other research that shows Instagram is the most popular platform for influencer marketing. Nine out of ten (88.9%) worldwide influencers are using Instagram for marketing campaigns more than they did a year ago, according to a study from influencer marketing agency Activate.

Marketers are forecast to spend about $1.6 billion on Instagram influencer marketing campaigns this year, according to influencer marketing firm Mediakix. The firm estimated that the total ad spend on influencer marketing will rise from $5 billion this year to $10 billion dollars in the next five years as advertisers shift budgets from other marketing channels.

To boost growth, the social influencer industry will have to address some key obstacles. The biggest challenge that brands face with influencer marketing is determining the return on investment (ROI) from campaigns, according to a study by influencer marketing firm Linqia. About three-fourths (76%) of marketers cited ROI as the top challenge, ahead of worries about social network algorithm changes that affect campaign visibility (42%) and time to manage campaigns (35%).

Apart from Instagram, YouTube is still popular among influencers, but has upset them with changes to the way they get paid for views and video format changes introduced last month. YouTube is reportedly offering five- and six-figure payouts to its most popular vloggers to give them an incentive to post their best content on YouTube first. YouTube CEO Susan Wojcicki last month said the company is committed to being more open about its experiments and tests that affect viewership. Among her five priorities for the second half of the year is helping creators build a business from their work, per a blog post.