December 10, 2023


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Do Influencers Really Influence Us?

After moving to the United States from the United Kingdom, I noticed that TV commercials here are a lot more to the point. Where an American advertisement would say “Buy Ajax and buy it now! It’s cool!” its British counterpart might be somewhat less direct with “We really think Ajax is cool. What do you think?”

Another thing TV commercials over here have plenty of is celebrities. From the biggest movie stars to reality show participants, everybody seems to be ready to endorse things. Movie stars are looking to convince people about things I never thought movie stars would try to convince people about; they want us to drive cars, drink drinks, and even switch banks. People on TV ask me, “What’s in your wallet?”

Would someone switch banks because of a celebrity’s endorsement? Every situation and advert is different, but in general, studies seem to think people listen to famous people. The economist in me is ready to be convinced by numbers any day of the week.

However, we are in 2022, and what constitutes a celebrity has been changing in front of our eyes for well over a decade now. YouTube started in 2005, Instagram in 2010, and some say that influencers are the real celebrities of our age. No wonder big brands seek them out for endorsements—but is this money well spent? How much do we celebrate what celebrities endorse?

Selling Points

When an Instagram influencer named Arii received an offer to advertise T-shirts to her two million followers, it must have felt like a slam dunk. Even if only one in every thousand followers bought a shirt, that would still be two thousand pieces sold.

Turns out that it was quite an ambitious goal, and only 36 of those two million people were keen to buy the shirts. This didn’t make Arii, or her Instagram followers, happy. The common advice, as another influencer put it, is to “focus on genuine engagement and not followers cuz they ain’t gonna buy a thing.”

One person’s experience does not a statistic make. Estimating how many actual purchases are driven by influencers is an almost impossible task, but some say the number accounts for over $2 billion annually.

Everything in internet marketing gets measured down to the last impression, a single occasion when someone sees an online ad. If a campaign doesn’t work, that campaign will get shut down, sometimes automatically, within a split second.

This is how we know that internet marketing, on average, can actually sell; if it didn’t, the whole lot would have been shut down already. Instead, what we see is U.S. companies spending more and more on influencer marketing, and it’s only fair to guess that’s because it works.

Celebrities Can Celebrate

Advertisers have been asking famous people to endorse products since the 1920s. A hundred years ago, actresses Joan Crawford, Clara Bow, and Janet Gaynor were among the first celebrities who promoted products. By the 1970s, one in three TV commercials involved a celebrity endorsement one way or another. In an industry where stakes are high and numbers talk the loudest, such an investment is a sure sign that something works.

Celebrity endorsement is not the cheapest formula in advertising for sure, and its efficacy depends on many factors. Cultural anthropologist Grant McCracken analyzed the major factors of a successful endorsement and found that:

  • Consistency and long-term commitment matter. As with almost anything in branding, the more often people encounter a message, the more familiar it becomes and the stronger the message-brand connection will be.
  • The endorser should be attractive, possess a positive image in society, and be perceived as someone knowledgeable.
  • The celebrity shouldn’t overshadow the brand. This principle is more a function of the campaign than it is of the famous person, but the two components work together in tandem. Not many brands can be the real star when a movie star is also on the stage.
  • Return on investment is assured. One of the hardest challenges for a marketer is to measure the impact of their work, and celebrity campaigns are one of the hardest for which to come up with a believable number. Yet, this is an important number to research, a number that can help a company avoid spending too much on celebrities.

Entertainment, Commerce

When celebrities appear in marketing, they and the brand have an impact on each other. The audience’s comments and feedback influence the influencer as well, often establishing them as opinion leaders of their growing community.

“The next Amazon competitor is going to look like a social or video app, not a shopping app.” —Connie Chan, general partner of the venture capital firm Andreessen Horowitz

Content and commerce are slowly becoming the same thing—and right in front of our eyes. Influencers can take photos of their outfits, and their followers can buy every piece of what they’re wearing. This “influence” is not limited to clothing; content creators can engage with users and sell them anything and everything. Entertainment commerce combines e-commerce, branding, and celebrity endorsements, and it is taking over the world.