This article is part of a cross-brand Digiday Media series examining how the creator economy has evolved amid the Covid-19 pandemic.. Check out the full series here.
Online shopping has been exacerbated by the pandemic, which has closed in-person stores and prompted customers to seek safer shopping alternatives. But an ever-growing segment of those online purchases have happened on social media and it’s not a declining trend.
By the end of this year, social shopping, meaning transitions made on or through platforms like Instagram, Facebook and TikTok, will become a $45.7 billion market, according to eMarketer. And for that, we have influencers and content creators to thank, in part, for their promotions, posts, and product reviews known to sell items after going viral.
Content creators are true arbiters of virality and if a brand is conversion-focused in its social marketing campaigns, working with influencers might be a good idea. But what is the real impact of creators and influencers at the individual level on driving transactions and how much money can they earn on average?
Purchases made through social media posts are expected to more than double between 2021 and 2025, according to eMarketer’s May 2021 report.
Over the three years from 2019 to 2021, total social commerce retail sales increased an average of 33%, to a total of $36.6 billion in 2021. While the annual rate of change is expected to fall to 24.9% in 2022, and below 20% in 2024, this market should reach nearly 80 billion dollars by 2025.
Digging deeper into this, eMarketer reported that around 36% of all internet users in the United States bought something from a social media platform in 2021, while an even higher proportion – around half – of all social media users aged 18-34 have made at least one purchase through social media. Facebook was the most popular social platform last year with 56.1 million people transacting on its website.
And yet, social commerce only accounted for 4% of the US retail e-commerce market in 2021.
Last year, platforms also bolstered their live shopping offerings by chasing down consumers who had stayed home during the pandemic. According to eMarketer, China alone is expected to bring in $131.5 billion in live social commerce sales.
Influencers have an impact at all levels
Influencers vary by number of followers, but the tide is turning when it comes to how brands view working with influencers with smaller followers.
Additionally, nano and micro-influencers might have better engagement rates with their users because they have a greater ability to engage with those followers through direct messages or comments on posts, which helps them create communities and to increase the level of trust of their public in them. .
On Instagram, about a quarter of influencers who belong to the “nano” range of followers earn money from their accounts, while almost half of all influencers in the “micro” range earn some amount of money from the platform, according to a survey of 1,865 influencers conducted by HypeAuditor in 2021.
The macro level is the most profitable group with more than two-thirds of all influencers in HypeAuditor’s study making money from the platform.
According to HypeAuditor, the average influencer was earning $2,970 per month through Instagram at the time of the study. Micro-influencers earned around $1,420 per month on average, while mega-influencers with over one million followers earned an average of $15,356 per month.
However, the number of sales they have made through affiliate marketing links and business deals can vary greatly depending on product category and price.
In 2019, Maddie Raedts, a member of the Forbes Agency Council, founder and CCO of IMA and global head of social media for fashion and luxury at MediaMonks, wrote in an article that one of her travel clients had seen 3% to 5.8% conversion rate on an Instagram influencer campaign thanks to swipe-up links offering discounts. And in 2016, influencer marketing agency Grapevine reported that the average industry conversion rate of consumers making a purchase through influencer content was 2.5%.
Don’t neglect micro-influencers
This year, Influencer Marking Hub predicts that micro-influencers will play a bigger role in contributing to the number of sales made through their content, because even though they have fewer followers, their audience tends to be more engaged.
Lindsay Hittman, president and co-founder of affiliate marketing and content monetization platform BrandCycle, said, “the thing we see working very effectively for some [micro-influencers] is [high posting] volume. Some of the micro-influencers we work with post on their [Facebook groups and on Instagram] 20 to 30 times a day and that allows them to test a lot of products, test a lot of price ranges and test a lot of different brands.
Micro-influencers might also have a better understanding of what will make someone pause mid-scroll. While a larger influencer or celebrity may post more about limited releases or new “cutting edge brand” launches that match their inspirational and elusive allure, micro-influencers are going to focus on relatability and post about sales or discounts, Hittman said.
“With some of the bigger influencers, you see a bit more newer, edgier brands that have less of a bias that they promote, where the micro-influencer can promote more of the traditional big box stores because of the amount of stuff they’re promoting. ‘they can post day after day is so much bigger,’ Hittman said.
Because of this, macro influencers tend to post fewer products on a daily basis, thus limiting the chances of conversion.
“From a brand perspective, it all depends on their purpose. Is it a mark game or is it a conversion game? We find that micro-influencers can convert at a much higher rate [so] if it’s a conversion game you go micro, if it’s a brand game you go macro,” Hittman said.