Our CEO, Swish Goswami was recently on the Content Generation and Finding the Right Influencers webinar by Clearbanc and explained why he thinks influencer marketing is going to grow. He describes his theory as contrarian and we think it’s a notion worth sharing.
The New Dot Com Bubble
The Dot Com Bubble was a bubble in the stock market in the late 1990s and early 2000s that was caused by over investing and speculation in internet companies as adoption with the general public increased. That bubble ultimately burst leading to corporate valuations plummeting.
Swish believes the second coming of the Dot Com Bubble is online advertising. He believes that Facebook Ads,Google Ads, and Instagram Ads are losing their effectiveness and as a result will start to see people stop spending money there and spend it elsewhere.
He believes this for 4 key reasons:
1. Ad Fraud
Over the next 3-5 years $50 billion-$150 billion will be lost as a result of domain laundering and click farms. This is when people sell low value ad spots on websites for high cost and when websites get ungenuine clicks to drive up the cost per ad. This means billions of dollars will be spent on fake traffic.
2. Ad Blockers
Ad Blockers are on the rise. Ad Blockers are programs you can download for your computer that block paid ads. 40% of North American YouTube users are using an Ad Blocker. As a result of this, businesses advertising through online methods aren’t able to reach their desired target audience.
3. Lack of Control Over Ad Placement
When you’re paying for digital ads, you have in depth targeting abilities for the type of person that will see your ads but your ability to determine exactly where they see those ads is limited. Brands like Verizon and JP Morgan had their ads put on top of racist YouTube content in 2019. With fear of being associated with the content they are advertising on top of, brands will want to have more control of where their ad gets displayed.
4. Messy Attribution
You can look at sales data as a metric for the success of your campaign but that does not always tell the full story. Oftentimes people are getting ads for products they already intended to buy. As a result, their sale is attributed to the ad but that date does not account for the fact that they were planning to purchase anyways. Therefore, you cannot quantify whether the ad is working or if you’re marketing to people who already had buying intent.
Influencer Marketing is Going to Grow… But It’s Going to Be Different
As a result of all of the factors listed above, influencer marketing is going to continue to grow. With influencer marketing you can:
While we are expecting to see a rise in influencer marketing, Swish believes that the traditional model for influencer marketing is flawed and we’re going to see a shift in the industry. We’re going to see less brands pay a random “influencer” just because they have a million followers and will instead see brands focused on conversion look to activate their own influential buyers and sellers.