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Has the Instagram Influencer Market Peaked?

Professor of Financial Economics and Part-time Value Investor, Transfin.
Jan 10, 2020 10:42 AM 2 min read

In the world of social media, one of the most definitive trends of the 2010s was the rise of Influencers.


But have we reached "peak Influencer"?


Birth of an Influencer: Facebook made getting more "friends" a popularity statement. Tumblr and Twitter changed this to "followers". When Instagram entered the scene in 2010, this trend exploded. And it became monetised. Those whose follower count ran in the hundreds of thousands began teaming up with brands big and small to promote their products and services on their profiles. Towards the end of the decade, smaller accounts jumped on the trend too as micro-influencing took off.


Big Bucks: According to data from marketing firm Izea, the average cost of placing a sponsored post on Instagram grew from $134 in 2014 to nearly $1,650 today. For mega-celebrities with millions of followers, prices can run into hundreds of thousands of dollars per post.


Is This the End?: The Influencer market might have peaked, though. Engagement rates have dipped over the past year. Spending on Influencers is expected to peak in 2020 at $8bn. Instagram is reportedly considering hiding its "like" button - a move that would up-end the whole industry. There is consumer wariness over the Influencer stereotype and lifestyle. And there is increasing emphasis on "authenticity", with consumers saying good content and good practices sway their choices more than Clarendon-infested Instagrammable photoshoots.


Do these trends point to a tapering off of the influence of Influencers and the endangerment of an industry? As with markets, social media and the internet are unpredictable. Only time will tell!


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