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Why is Influencer Marketing So Effective?

The ongoing popularity of social media amongst many target markets and demographics has brought along the success of influencer marketing. In our context, influencer marketing is the strategy of building relationships with people who can then build further relationships for your business. This in turn, allows your business to reach market segments through the influencer's social network which you may not have been able to reach prior.

According to eMarketer, the influencer marketing industry reached approximately $570 million in 2016 - and this only continues to grow. Another article by Jason Quey found that "on average, for every $1 invested in influencer marketing, businesses receive $6.50 in return". Even more research has shown that influencer marketing has the ability to increase both conversion rates and redemption rates by three times.

So the numbers have spoken - but why is working with key leaders of select demographics so effective when promoting your brand?

Let's take a look!


One of the main benefits of influencer marketing is the fact that brands capture the ability to reach market segments and demographics in which they were unable to reach previously. By working with influencers, brands essentially unlock a whole new customer base. Even further than this, these customers usually provide high engagement rates, interest, and, with due research, fall directly into the target markets. Many brands have come to the conclusion that influencers result in higher quality customers.

Consumers nowadays are expecting to be entertained and informed by their interested brands - and influencers are able to fill this role easily. Over 70% of global brands increased their social media strategy over 2017, and are seeing the results of reaching more people.


Again, with more people on social media, there are more public figures and influencers than ever before. With so many consumers staying up-to-date and interested in what high-profiled celebrities, models, and public figures are doing, wearing, and consuming, there is so much opportunity to promote your brand.

In our case, when we worked with 12 influencers promoting New Balance in Singapore, they emphasised that the new sneakers were the next 'in-product', and a 'must-have'. This ultimately resulted in 60% of pre-stock being sold in only four days. Essentially, we were able to leverage their reach and relationship with young, stylish fans, which proved to effectively create hype and tendency to purchase. This is another key benefit and goal of influencer marketing - and its almost too easy.

Moreover, it is no secret that consumers are more likely to buy products recommended by people they trust. In fact, 92% of people they know for referrals above any other source (Forbes). Just imagine the results and traction a brand can receive if an influencer can reach out to their whole follower base about a specific product.


There is currently a great dynamic between brands and influencer marketing in terms of managing costs. This is because influencer marketing has been ranked as one of the most cost effective channels for promoting a brand, and at the same time, budgets for this type of marketing is rising. While on average the return on investment (ROI) for influencer marketing is $6.50 for every dollar, the top 13% of brands actually generate a ROI of $20 for each dollar spent. This means that companies are able to afford mistakes and trials, and learn from, and refine the overall process of their marketing strategy.

Having a larger budget for marketing also allows for data driven decisions. Brands are able to gather a large amount of analytics, and are able to move on further by working with more effective influencers in order to target more sophisticated buyers. All of this data amounts to valuable insight about the target demographic, and results in more effective advertising. These are great benefits which are made much more possible by the cost-effective nature of influencer marketing.

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