Brief:

• Influencer marketing is facing greater scrutiny from advertisers who are questioning whether spending money on endorsements by Instagram celebrities is worthwhile, according to a study by Markerly made available to Mobile Marketer. The value of micro-influencers who have fewer than 100,000 online followers is particularly questionable, Markerly said.
• While a study last year said micro-influencers were a tremendous value for brands because they had the best engagement rates for less money, Markerly this year found that micro-influencers might not provide the same value to justify high price tags. The researcher collected data from nearly 1,900 posts from 574 different influencers on Instagram.
• Markerly said that engagement rates decrease as follower count increases. The return on investment actually increased with larger influencers, a sign that micro-influencers might now be charging too much for their services.

Insight:

The social influencer industry continues to evolve and become more sophisticated as marketers sharpen their measurement tools to gauge the effectiveness of spending on endorsements. The cost for some micro-influencers is increasing as they try to improve the production value of their online posts, but they also need to grow their audiences to justify brands' larger investments.

Meanwhile, social influencers are trusted sources for product information, and their affinity with a brand must be authentic to be effective, according to a survey by influencer marketing agency Clever made available to Mobile Marketer. Nine out of 10 social influencers said they must like a brand to accept its sponsorship, and that the connection they have with one is often more important than money. The survey found that 71% of influencers' income is almost exclusively from sponsored content, versus more traditional ad streams like display ads, affiliate links and e-commerce.

However, there are also indications that some influencers are more concerned about making money than being authentic. According to Digiday, some influencers are gaming Instagram's algorithm to boost visibility in the platform's Explore tab by partnering with fellow influencers and participating in pods. 

Influencer marketing on social media is still a relatively new tactic, but it's quickly becoming an invaluable component to social strategies for those who have jumped in. Research from Bloglovin found that 32% of marketers using influencers see the tactic as essential to their overall marketing strategy, and 41% reported more success with influencer campaigns than with traditional advertising. Sixty-three percent of those using influencers planned on increasing that budget this year, according to Bloglovin.

At the same time, intermingling editorial content with endorsements like this has spurred some ethical concerns. The Federal Trade Commission in April said it warned social media influencers that they needed to provide better disclosures about promoting or endorsing products on social media, a continuing issue for brands who've integrated influencers into their marketing mix.