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Wed 5 Jul 2017 12:28 PM

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The $1bn world of social influencing is just the beginning

Five years ago, this business did not exist. Today, the men and women who work in this community can sway buying patterns by promoting a product on Facebook, Twitter, YouTube, Snapchat or Instagram.

The $1bn world of social influencing is just the beginning
Tech savvy: So much of what we see, read and watch is in the palm of our hands. The smartphone has brought equality to the world.

Does the dog wag the tail or does the tail wag the dog?

This expression first appeared in the late 1800s in reference to American politics, and has to do with the fundamental question surrounding politicians and the sundry circumstances that swirl about them daily. The best definition I could find is as follows: an item of minor importance dominating a situation. This philosophical question exists beyond the world of US politics, and today affects Everyman — and every day — in tangible ways.

In this edition of Arabian Business, we look at the world of the social influencer. These are the men and women who have established themselves to be trustworthy individuals on social media platforms. The most successful are creating a brand, which is themselves. Their name has become their reputation.

The question then begs to be asked: when it comes to social media, who is wagging whom (meaning, who has the power)? Is it the company that pays an influencer to promote a product; or the bankable influencer; or perhaps the consumer/follower who is able — thanks to social media — to voice approval (immediately and publicly) like at no other time in history?

When we talk about all things digital, we use numbers that are in the billions: 3 billion active internet users; 2 billion people with social media accounts; 3.5 billion mobile users have access to the internet via smartphones. Instagram is valued at $35bn. Snapchat, which most people my age (50) are not on, has been valued at $20bn. Amazing, for a platform that offers stories that disappear after 24 hours.

The business world is about two things: making money, and controlling the narrative. When trying to determine which is more important, the former cannot be done without the latter. In other words, no matter the product, if the social media response from the customer is less than satisfying, then the ability to make money is affected.

We live in a consumer society. We consume products as well as information. In turn, companies are receiving valuable date about their customers’ spending habits. Knowledge has never been more valuable to the customer or to a company.

Leading the charge to help consumers and companies are the influencers. These are the men and women who have spotted opportunities in the marketplace, and who are increasingly recognised by the business world for their opinions. They can sway buying patterns by promoting a product on a social media platform, be it Facebook, Twitter, YouTube, Snapchat or Instagram. These entrepreneurs of all ages and of all nationalities have created a billion dollar industry that did not exist five years ago. And the influencer market will only grow. We have called it the $1bn business, but that is just the tip of the proverbial iceberg.

Mohamed Alabbar says that e-commerce — which is the social influencer’s wealthy cousin who possesses real wasta — is a $3 bn business in the Mena. By 2025, he estimates it will be worth $70bn. Digital enterprises — and all its relations — will only grow in size.

So much of what we see, read and watch is in the palm of our hands. The smartphone allows a 15-year-old schoolgirl in Mumbai access to the same consumer goods as that of a 46-year-old trophy wife in Beverly Hills; a 35-year-old, London-dwelling, stocktrader can see the same news and social media feeds as a 23-year-old restaurateur in Beijing.

Access is at everyone’s fingertips, so it makes sense that the people who can influence consumers have become the new ambassadors to a world that dominates our lives today.

Welcome to the $1bn world of social influencing where the tail may be wagging the dog, and that may be for the best.