Archive for November 4th, 2019

Service of Who Influences You Now?

Monday, November 4th, 2019

Photo: emojis.wiki

When Pete Wells, The New York Times’ restaurant critic, recently gave legendary Brooklyn steakhouse Peter Luger zero stars, down from two, his review–Peter Luger Used to Sizzle. Now it Sputters–which knocked the stuffing out of the place, drew plenty of attention on local media.

Peter Luger steak Photo: pinterest.com

I’ve not heard of similar impact if a social media venue gave a thumbs down to a product or service. Yet companies believe in their significance to move goods and are paying plenty to get a thumbs up from people they’ve identified as social media influencers to rave to followers on Instagram, Facebook and the like.

According to Suzanne Kapner and Sharon Terlep in their Wall Street Journal article: “What began as friends and family sharing their favorite products has become a lucrative advertising industry of celebrity endorsers, influencers and meme creators. Such paid endorsements, known as sponsored content, are the online equivalent of a 30-second TV spot. Big-name stars can command $100,000 or more for a single YouTube video or Instagram photo.”

As so often happens, greed among some has weakened the value of what had become a good thing for the influencers. [The jury is still out as to whether such endorsements actually sell product and with some manufacturers the bloom is already off the rose.]

Photo: ipsy.com

The reporters wrote in “Advertisers Sour on Online Influencers,” that “a whiff of deceit now taints the influencer marketplace. Influencers have strained ties with advertisers by inflating the number of their followers, sometimes buying fake ones by the thousands. They also have damaged their credibility with real-life followers by promoting products they don’t use.”

The long Journal article gives examples, excuses and alternatives–some advertisers are now using their customers instead of celebrities to endorse products instead–but the paragraph above hits the crux of the flaws in the concept whereby consumers lost trust in influencer claims.  In addition, advertisers can’t track or confirm the success of a YouTube video or Instagram endorsement.

In fact Ipsy, the beauty products company that launched the trend eight years ago is “Now the brand leading the way again, this time by pulling back” from endorsements by influencers.

Click farm. Photo: core77.com

Nevertheless Kapner and Terlep reported that the influencer industry is still lucrative: Global estimates range from $4.1 to $8.2 billion/year in 2019 versus $500 million four years ago. Influencers have made 50 percent more each year in the last two. “Prices per Instagram post range from $200 for an influencer with as few as 10,000 followers to more than $500,000 for celebrities with millions of followers, according to Mediakix.”

One flaw: So-called influencers can easily bolster their follower numbers by hiring “click farms” that “employ people to inflate on-line traffic.” For $49 and $39 you can buy 1,000 YouTube and Facebook followers respectively and that number costs $16 on Instagram, one pundit estimated.

Do traditional reviews influence whether you’ll try a restaurant, product or buy tickets to a movie or Broadway show? Do you check out Yelp or websites that report what customers or patients think of establishments or doctors like ZocDoc? If a celebrity you admire says he/she likes a product on social media or anywhere else, do you give it a try?

Photo: cosmeticsbusiness.com

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