How the multi-billion dollar social influencer business is likely to evolve

Arabian Business investigates the trend of social media influencing and asks the question everyone has been pondering: 'Is it here to stay?'
How the multi-billion dollar social influencer business is likely to evolve
Arabian Business investigates the trend of social media influencing and asks the question everyone has been pondering: 'Is it here to stay?'
By Lubna Hamdan
Thu 26 Oct 2017 03:58 PM

Social influencers: some dislike them, some revere them, but most can agree their area of expertise is slightly confusing.

What exactly is social influencing? Is it a full time job? What does it entail? Will it prove to be a fad and quickly die out? And is it even legitimate as a business model?

Judging by the figures, ‘legitimate’ is certainly one way to describe it. Social influencing is by definition the individual power of affecting consumers’ purchasing decisions due to knowledge, position or relationship. In other words, it is another form of advertising. And in the UAE, the power of influencers is real.

According to research by PR agency BPG Cohn & Wolfe, 71 percent of UAE residents aged 18 to 40 would take advice from social media influencers before purchasing products or services online, with beauty, fashion and food being the top areas residents are most likely to turn to for recommendations.

But it is not just in the UAE that influencers have made their mark.

Blogger-turned-businesswoman Huda Kattan

Credibility and cash

Bloomberg reported that influencers around the world can charge anywhere from $250 per post if they have 10k to 100k followers, to $100,000 per post if they exceed the 50m follower mark. Influencer marketing on Instagram alone is estimated to become a $2bn industry in the next two years. Facebook, YouTube and Snapchat have also seen their share of heightened influencer marketing, with some influencers capturing as much as 55 percent of revenue from sponsored ads on their pages and videos.

Influencers have also turned to alternative forms of advertising such as affiliate links, which allow them to share links to products or services. Dubai-based comedian and influencer Mohanad Al Hattab has even revolved to traditional commercial appearances, taking the place of famous and small-time actors.

Simon Jenkins, social media director  at Havas Media Middle East, believes today’s consumers see through traditional celebrity endorsements, realising that the advertisements are not genuine, and craving for real and honest brand messages. “Not only this, but today’s younger consumers consider YouTube stars or niche influencers to be more credible than a Hollywood celebrity, and are more likely to purchase a brand after seeing it advertised by a social media influencer,” he says.

One example of the power of influencers took place in May this year when Instagram-blogger-turned-businesswoman Huda Kattan was forced to cancel a meet-and-greet session at The Dubai Mall after it attracted so many fans the mall was ‘above capacity limits’.

With over 22 million followers, it is no surprise Kattan is the highest-earning beauty influencer on Instagram, charging up to $18,000 (AED66,000) for a sponsored post, according to Instagram scheduling tool HopperHQ. She reportedly has up to 700 million active monthly users across the world, on different social media platforms. It is no wonder, then, that the likes of Kattan are jackpots for advertisers looking to explore beyond traditional marketing.

Dentist, part-time influencer Hassan Ghoneim

Unfortunately for many of those advertisers, the very tops ones, such as Kattan, seldom work with brands, choosing instead to use the platforms to support their own product lines and maintain credibility. Saudi-based influencer and dentist Hassan Ghoneim tells Arabian Business he uses his account to promote his dental clinics in the Kingdom.

He first became ‘insta-famous’ when a Saudi princess posted a picture of him with the caption, ‘The coolest dentist, my dentist.’ Today, Ghoneim has over one million followers on his Instagram page, but has said people forget he is a dentist and mistake him for a full time influencer, a career he would never solely rely on. Why?

“You never know what could happen,” he says, “But I can leverage it by advertising my businesses on those platforms, so that for the long run, the impact will remain, even if I am not [present on social media] anymore. I think it is a bubble, and I’m glad to be inside this bubble right now, but even when it’s done, I have my clinic, I have a job and I have a real life.

"I don’t depend on social media. It’s nice to have this fame and luxury life, but I can live it off camera as well.”

Professionalising the market

Ghoneim argues that social media platforms should work better with influencers by helping them get verified accounts and setting up more joint events with top influencers. This year, Instagram launched its ‘paid partnership with’ tag to give creators the ability to track and share insights around their branded content, such as reach, taps forward, taps backward, replies and exits.

Mariam Yehia, founder of Mrs Keepa

However, the new option is largely aimed at ensuring transparency and helping users distinguish sponsored content, which is also a legal requirement in many countries.

Havas’s Simon Jenkins believes such steps are crucial to regulate social media marketing.

“The credibility of influencers is now being questioned due to the mass clutter and noise within social media, and those who are authentic are becoming a rarity. In order for a brand to reach their desired marketing goals when choosing a social influencer, it is key to outline a precise set of data-driven KPI’s rather than depending on reputation alone, otherwise this success may only live short term,” he says.

But for influencers like Ghoneim,  such regulations make interactions with followers less organic. It is for that reason Ghoneim is most influential on Snapchat.

“Snapchat allows for easier communication with my audience. On Instagram, you have to tag [brands] and once you do that, people will know that you wouldn’t use [the products] for free. It’s not challenging for me because I choose my products wisely and advertise things I really use in my daily life, but it’s easiest [to make money on Snapchat] because you don’t have to say it’s an advertisement. Let’s say I’m advertising for a brand of water. I can just drink it and people would think, ‘It’s the best water because he’s drinking it.’ I don’t have to say, ‘It’s the best water.’”

Dubai-based influencer and fashion designer Mariam Yehia claims platforms such as Instagram are more encouraging of influencers who launch their own products. The founder of fashion label Mrs Keepa commercialised her personal Instagram account of 106k followers to advance her brand. “The platforms are not against blogging without any products, but they’re not really for it, because they think it’s a trend that is going to die, especially now that there are lots of influencers.”

She says she has asked them what the criteria is for verification, and was told, “It’s when people have a product, not just a pretty face.”

Yehia was contacted by the photo sharing app to share details that could help boost her account, such as the best time to post and ways to encourage follower engagement, but the fashion designer says there is not much the platforms can help with considering the premature nature of the practice. “This whole [social influencing] thing is new and it’s a self-learning process. No one can really promise anything or help, because it’s the audience who is controlling it. No one can impose engagement or force them to like something you’re posting,” she says.

Comedy influencer Mohanad Al Hattab

Some experts argue advertisers are throwing away money on influencers who are often called ‘talentless.’ Ghoneim agrees there are few influencers who are actually influential, but says savvy brands are able to identify which influencers can help with their objectives.

In it for the long haul

Seeking to gain credibility with her clients, Mariam Yehia conducted a case study to find out more about her audience. She discovered that out of her 106,000 followers, she has 10,000 engaging customers with high purchasing power; most of whom are based in the UAE. But Yehia maintains that she is a fashion designer before being an influencer. “If you don’t have anything behind [your social media campaigns], and you’re only a pretty face, you’re going to be part of a bubble that will die out,” she argues.

Jenkins agrees with Yehia, explaining, “Ultimately, it’s a trend that is here to stay for the foreseeable future. However, there will certainly be a shift in the type of influencers that brands invest in. Brands will decrease their investments in mass influencers and we foresee the rise of ‘micro-influencers’ that will be controlled by brands through programmatic platforms, with set KPI’s and restrictions in order to portray an authentic brand message.”

In other words, the industry will formulate its own rules and measurements for success. There will likely be influencers who evolve with these changes, while many others won’t make the cut. But ultimately, the power to influence seems likely to stay.

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Last Updated: Sun 29 Oct 2017 09:44 AM GST

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