Why social media stars are set to become big revenue generators
Two years is a long time in any industry. In media it’s a lifetime. Back in January 2016, when I was looking at the growth of “influencer” marketing – and the rise of social media celebrities around the world – I wondered whether this was a one season wonder or a game changer for our business.
Who exactly were these people popping up on Instagram, showing off pictures of themselves? What was the attraction of the YouTubers, who spent the day filming themselves doing something vaguely interesting, viewed by no more than a few thousand people?
With the influencer business only really starting to take shape, and it being a largely unregulated market, I forecast back then that ITP Media Group would over the next 12 months make a sum total of zero dollars from the industry. My forecast, I am pleased to report, turned out to be 100 percent accurate.
This year was different. Not only did many influencers – both in this market and in the West – finesse their art, but big brands started taking them seriously. Some of the biggest stars in the US are commanding over $200,000 per post to endorse a brand on their platforms.
These sums are being spent as advertising agencies seek more creative solutions, and clients see greater ROI. Performance measures have improved, there is more transparency (though there is still a long way to go) and the numbers are staggering.
Our region is no different. YouTube superstars here have taken the world by storm, with the likes of Mo Vlogs entertaining over four million subscribers. Fifteen year-old Rashed Belhasa, better known as Money Kicks, has over one million followers. These are numbers that come with huge engagement rates and targeted audiences, and are what advertisers dream about. They also show huge growth rates, having stood at 900,000 and 200,000 respectively in 2016.
Needless to say, we at ITP Media Group made our move, with the launch in January 2017 of our own influencer agency ITP Live. This year, it will already account for around five percent of our total group revenues. Not a bad start.
When you consider that online sales in the UAE accounted for just three percent of total retail sales last year (as opposed to 40 percent in the UK), it puts in perspective just how significant a number five percent is.
But what of the year ahead? Given my 100 percent track record on forecasting so far, I will make another prediction, and a bold one at that: in the next 12 months, the influencer business will account for between 15 and 20 percent of our total revenues. This is not a bubble, it is real.
However, that doesn’t necessarily mean 2018 will be the year of the influencer. I expect it will be 2019 before this market really explodes.
As the industry grows at an astronomical pace, we will also witness a sharp rise in the number of people wanting to be “influencers.” On the face of it, this looks like the best job in the world. You do what you want, video it, and collect the cash. Everyone and anyone will want to have a go.
My advice is to think again. In November, I spent the best part of a day with the US influencer Logan Paul – a 22-year-old college dropout with a social media reach of 50 million, including over 12 million subscribers to his YouTube channel.
Although he is one of the biggest social media stars on the planet, what really struck me was his work ethic. Not only did he take every aspect of his job seriously, from filming to editing and production, but he worked tirelessly. All Paul cared about was creating great content, no matter where or what the time of the day. Yes, when you saw his ten-minute vlog the next day it looked like he had a ball. The truth is, I genuinely don’t know how he found time to sleep.
And here lies the secret for influencers who want to make a career out of this: it is not a walk in the park. It is a serious business, requiring a huge amount of professionalism and dedication. Only the most committed and the most creative will succeed.
As for ITP Media Group, for me, and for the whole industry, the opportunities ahead are huge. It is up to us to grab them. Happy New Year.