Every year, Martech releases its marketing technology landscape and every year it increases in size and shape. As the technology landscape changes we’ve seen entirely new categories added and disappear.
This year’s landscape grew 40% to a total of 5,381 solutions and 4,891 unique companies providing those solutions. In 2011, just 150 companies were part of the chart. Of the 4,891 companies currently included, 6.9% employ more than 1,000 employees or are public, 44.2% are private businesses with less than 1,000 employees and 48.8% of companies are investor-funded startups.
One of the largest growth areas will not come as a surprise to anyone. The Social & Relationships category and, in particular the subcategories Social Media Marketing & Monitoring, Influencers, and Advocacy, Loyalty & Referrals have grown tremendously. This growth, of course, is a reflection of the shifting behaviors consumers have exhibited online as well as the focus of marketers who have followed those consumers as their behaviors shift. Where once focusing on topic specific blogs was considered a leading edge marketing tactic, that segment — while still alive — has been subjugated by social media channels such as Facebook, Twitter, Snapchat, Instagram, etc. and the influencers and content creators who inhabit those spaces.
It’s no surprise then that influencer marketing — or, modern day word of mouth — has come into its own as a primary method of marketing for merchants, brands, networks, and the entire performance marketing ecosystem. These influencers, celebrity or otherwise, have built up huge followings on Twitter, Facebook, Instagram, Pinterest, Snapchat and elsewhere and have become an important tool for merchants to leverage to move product.
According to MarketLive, social media increased its contribution to ecommerce referrals by 200% between Q1 2014 and Q1 2015. Now, about 2% of all ecommerce traffic in the US now stems from social networks such as Facebook, Pinterest, and Twitter. According to Burst Media, consumer brands earned $11.33 for every $1 spent on influencer marketing programs in 2015 and apparel brands earned $10.48 for every $1 spent.
The affiliate model — whereby an affiliate is paid a commission for each sale made based on their actions — has now added influencers to its mix. When influencer marketing first became a thing, influencer compensation consisted of a flat fee paid by a brand or a merchant to that influencer for a specific action performed such as a series of tweets or Instagram posts.
Now, we have pay for performance models whereby tracking links are provided to influencers allowing for the tracking of activity, sales, and ultimately, payment to the influencer based on performance. Which, from a performance marketing perspective, makes a whole lot more sense than early influencer marketing models whereby a chunk of cash was just handed to the influencer with no guarantee of results. Overlying the affiliate marketing model atop the burgeoning influencer marketing channel provides the best of both worlds: payment only for a performance metric while tapping into a trusted word of mouth relationship between consumer and influencer.
Take a look at the recently launched Amazon Influencer Program, a program where influencers are provided a vanity URL that is linked to a customized Amazon page on which products relevant to the influencer’s content are available for purchase. These pages are curated by the influencer and any product sale made from these pages is directly attributable to the influencer.
Influencer discover platform TrulyCast did a little bit of research and predictive modeling to come up with an estimated market size for influencer marketing. The company estimates that the space is somewhere between $1.6 and $2.25 billion right now. That’s close to one half the size of the entire affiliate marketing space. Nothing to sneeze at!
In terms of where influencer marketing is headed, the future will bring an environment where influencer marketing will break out of the traditional internet mold of desktop and mobile and into digital interfaces where personalized content presents itself in real world scenarios. In line with the familiar “Internet of Things” scenario, we will begin to see influencer marketing play a role in real-time omnichannel transactions, connected cars, the home, and more. For example, imagine you’re in a store and you receive a notification that your favorite influencer has reviewed a product you have viewed and is available in the store you’re shopping in. Even better, they are offering a coupon for that store.
This sort of thing is beyond your typical influencer engagement and resultant performance marketing-fueled sale. This is micro moment-fueled influencer ecommerce. It won’t be an end cap in Walmart that instigates the sale. It will be a notification from your favorite influencer who not only has a personalized product review for you but a coupon for you to immediately redeem. All trackable and attributable to each and every player in that influencer marketing chain of events. This is the future of influencer marketing.