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"Sponsored post", "Paid partnership", "Use my code". If you're one of social media's 2.9 billion monthly active users, chances are that you've come across this kind of phrase thanks to influencer marketing. Here’s why it might be here to stay.

Modern influencer marketing took root over the last two decades as marketers rushed to establish social media presences, especially after the launch of Facebook ($META) and Twitter. Since then, culture has become heavily intertwined with social media – 97% of Gen Z use it regularly – and the market size for influencer marketing has grown exponentially. Just between 2016 and 2022, it’s gone from US$1.7b to US$16.4b.

Part of what made influencer marketing surge, according to management consulting firm, Kearney, is the change in consumer behaviour from “affluence” to “influence”. Instead of mass production and media models that catered to consumers whose mantra was “I am what I own”, businesses started to tap into individual voices to reach today’s consumers whose mantra is “I am what I do”. They’re driven by values, individualisation and trust. This has transformed the relationship between company and consumer from transactional to personal. That’s why influencer marketing has been so successful in this day and age, despite the principle actually dating back to 1760. Influencers market themselves as peers and aim to form a connection with their audience.

Brands aren’t complaining either. Influencer marketing has been found to be extremely cost-effective: with lower contracting costs compared to celebrity endorsements, lower production costs, less exposure to ad-blocking software and easier data collection. It also offers a higher return on investment (ROI) compared to traditional marketing techniques, both quantitatively and qualitatively. An example that stands out is Microsoft’s ($MSFT) International Women’s Day campaign: with just 30 photos, the campaign garnered over 150 million views and over 3.5 million likes on social media.

Some ETF fund managers have already jumped on the bandwagon, and the global influencer market is expected to grow by 35% annually over the next five years to reach US$110b in 2028. That’s as hard to ignore as a sponsored post on your feed.

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