Big brands pay even bigger bucks to celebrities to appear in their ads, endorse their products, and be seen wearing or using their products. Despite the cost, 15% of advertisements in the U.S. feature a celebrity, so they must be effective, right?
Well, they can be.
With youth demographics in North America, YouTube stars are more popular than some of the biggest names in Hollywood. You probably know who Jennifer Lawrence, Vin Diesel, and Daniel Radcliffe are, but what about Jenna Marbles, Shane Dawson, and Ryan Higa? Teens in the U.S. rank the latter three as more influential than the first three A-list Hollywood celebrities.
Not so long ago, brands could engage these Internet-famous celebrities and reach a younger, growing demographic at a much smaller cost than TV or movie celebrities. However, the heyday of inexpensive internet celebrity endorsements has come to an end. Internet sensations have become stars in their own right, earning millions in annual revenue. Many now command nearly the same prices as “offline” celebrities, making influencer endorsements out-of-reach for most smaller companies.
Additionally, studies have found that there are diminishing returns on product mentions as followers of influencers grow. One study demonstrated that Instagram followers with under 1,000 followers had a “like” rate double that of those with between 1,000 and 10,000 followers and that likes and comments had, “a similar pattern.” Why? Because as popularity (familiarity) of an influencer increases, relevance can decrease, and soon you’re back to the shot-in-the-dark scenario we mentioned earlier.
And so, micro-influencers are quickly becoming the next force in influencer marketing.