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Influencer marketing (a.k.a. influence marketing) is a form of social media marketing involving endorsements and product placements from influencers, an individual or organization who has a strong following and/or social influence in their respective fields.
Influencer content may be framed as testimonial advertising, where influencers play the role of a potential buyer themselves, or they may be involved as third parties, which can be spotted either within the supply chain (retailers, manufacturers, etc.) or among the so-called value-added influencers (such as journalists, academics, industry analysts, and professional advisers).
Most discussions of social influence focus on persuasion in a social environment and compliance. In the context of influencer marketing, influence is less about arguing for a particular point of view or product, and more about loose interactions between various parties in a community, often with the aim of encouraging purchase or behavior. Influence is often equated to advocacy, but may also be negative, relating to the concepts of promoters and detractors.
The "two-step flow of communication" concept was introduced in "The People's Choice" (Paul Lazarsfeld, Bernard Berelson, and Hazel Gaudet, a 1940 study on the decision-making process of voters). This idea was further developed in "Personal Influence" (Lazarsfeld, Elihu Katz 1955) as well as "The Effects of Mass Communication" (Joseph Klapper 1960).
There is a lack of consensus on what an "influencer" is. One writer defines them as "a range of third parties who exercise influence over the organization and its potential customers." Another defines an influencer as a "third party who significantly shapes the customer's purchasing decision but may never be accountable for it." Another says influencers are "well-connected, create an impact, have active minds, and are trendsetters," though this set of attributes is explicitly aligned to consumer markets.
Sources of influencers can be varied. Marketers traditionally target influencers who are easy to identify, such as press, industry analysts, and high-profile executives. For most business-to-consumer (B2C) purchases, however, influencers might include people known to the purchaser and the retailer staff. In high-value business-to-business (B2B) transactions, the community of influencers may be vast and diverse and might include consultants, government-backed regulators, financiers, and user communities.
Forrester analyst Michael Speyer notes that in the case of small and medium-sized businesses, "IT sales are influenced by several parties, including peers, consultants, bloggers, and technology resellers." He advises that "Vendors need to identify and characterize influencers inside their market. This requires a comprehensive influencer identification program and the establishment of criteria for ranking influencer impact on the decision process."
Like a set of diverse influencer sources, influencers can play a variety of roles at different times in a decision process. This idea has been developed in influencer marketing by Brown and Hayes. They are capable of mapping out how and when particular types of influencers affect the decision process. This then enables marketers to selectively target influencers depending on their specific nature or domain of influence.
Market research techniques can be used to identify influencers, using pre-defined criteria to determine the extent and type of influence.
- Activists: Influencers that get involved with their communities, political movements, charities and so on.
- Connected: Influencers that have large social networks.
- Authoritative: Influencers that are counted upon and are trusted by others.
- Active minds: Influencers that have multiple and diverse range of interests.
- Trendsetters: Influencers that tend to be the early adopters (or leavers) in markets.
Malcolm Gladwell notes that “the success of any kind of social epidemic is heavily dependent on the involvement of people with a particular and rare set of social gifts”. He has identified three types of influencers who are responsible for the "generation, communication and adoption" of messages:
- Connectors network across a variety of people, and thus have a wider reach. They are essential for word-of-mouth communication.
- Mavens look to utilize information and share it with others, and are extremely insightful with regards to trends.
- Salesmen are "charismatic persuaders". Their source of influence leans toward the tendency of others to attempt to imitate their behavior.
Currently, most of the subject matter on influencers focuses on consumer markets, rather than business-to-business influencers. A key distinction is that most of the focus in consumer markets is on consumer influencers themselves, primarily because word-of-mouth communication is prevalent in consumer environments. In business marketing, influencers are people who affect a sale, but are typically eliminated from the actual purchase decision. Consultants, analysts, journalists, academics, regulators, and standards bodies can be considered as few examples of business influencers.
Influencers can also be defined by the number of followers they have. Influencers with a large following mostly include celebrities with a strong reach. Sometimes these influencers can command six- or seven-figure fees for a single post.
Businesses are striving to pursue people who aim to lessen their consumption of advertisements and are willing to pay such influencers a higher amount. Targeting influencers is seen as a method of increasing the reach of marketing messages, in order to counteract the growing tendency of prospective customers to ignore marketing efforts.
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Online activity can be considered a core part of offline decision-making, as consumers research products and review websites.
Critics of this online-intensive approach argue that researching around just the online sources misses critical influential individuals and inputs. They note that much influential exchange of information occurs in the offline world and is not captured in online media. Indeed, most consumer exchanges occur face-to-face rather than in an online environment, as proven by Carl. He notes that "an overwhelming majority of word-of-mouth (WOM) episodes (nearly 80%) ... occur in face-to-face interpersonal settings, while online WOM accounted for just around seven to ten percent of the reported (WOM) episodes."
Carl concludes that "The majority of the WOM action still seems to be happening in the offline world. These findings are especially provocative since they appear at a time when more and more organizations are paying attention to how their brands are discussed online, and; recent academic research has focused on online WOM. Thus, it is important for organizations to keep online as well as offline conversations on their radar screen."
Keller Fay announced in 2007 that "While experts have previously estimated that 80% of marketing-relevant word-of-mouth takes place 'offline' (i.e., face-to-face or via telephone), the latest results indicate that this figure could be even higher – 92%." 
More recently, Nate Elliott from Forrester observed that "the huge majority of users influence each other face to face rather than through social online channels like blogs and social networks." 
With any marketing strategy, risks are involved; and there have been reports of brands dropping their influencers because of the controversies that surround them. One such influencer is YouTuber PewDiePie, whose use of antisemitic and racist comments led to canceled deals from Disney and a widespread backlash.
Few marketers use influencer marketing to establish credibility in the market, while others use the same to create social conversations around their brand. There are also still others who attempt to drive online or in-store sales of their products. The influencer marketer can also switch to marketing diversified products and services, leveraging upon the credibility earned over time. The value which influencer marketing creates can be measured in several ways. Some marketers measure earned media value, others track impressions, while there are few others who track cost per action.
In the United States, influencer marketing is treated by the Federal Trade Commission (FTC) as a form of paid endorsement, governed under the rules for native advertising; the advertising agency complies with the established truth-in-advertising standards to such advertising and fulfills requirements for disclosure on the part of endorsers (influencers). In 2017, the FTC sent out more than 90 letters to influencers (namely celebrities and athletes) reminding them of their obligation to disclose sponsored posts. One practical impact of the FTC's action was Instagram's 2017 feature which inserts a "paid partnership" mention at the very top of an Instagram post by an influencer.
Media-regulating bodies in other countries, such as Australia, have created guidelines around influencer marketing following the decision of the FTC. In the United Kingdom, a voluntary agreement was announced on January 2019 between the country's Competition and Markets Authority and high-profile social media influencers to ensure that all of them comply with consumer law.
Fake influencers have been around for as long as their real counterparts. All criteria used to determine the veracity of an influencer account can be fabricated. Instagram has tried to shut down third-party sites and apps that provide paid services to individual accounts for buying followers, likes, comments, and more, but there still are paid websites that allow you to buy followers. A marketing agency researched to test whether fake influencer accounts can profit. The company created two fictitious accounts - with their presence built up through paid followers and engagement (likes and comments) - and applied to campaigns on popular influencer marketing websites. They published their results with a step-by-step explanation of how the false accounts were created and the brands which had sponsored them.
An analysis involving over 7,000 influencers across the UK revealed about half of their followers, in turn, have up to 20,000 followers that are "low-quality,"; on account of inclusion of mass followers, internet bots, and other accounts that seem suspicious. As such, more than 4 of 10 engagements with this group of influencers are "non-authentic."
A study of UK influencers which looked at almost 700,000 posts from the first half of 2018 found that 12% of UK influencers had bought fake followers.
In a study conducted by Social Chain, 24% of influencers had abnormal growth patterns - meaning they had manipulated their likes or followers at some point. 
Influencer fraud, including purchasing fake followers, is estimated to cost business up to 1.3 billion dollars - 15% of spending on global influencer marketing - in 2019 by recent research, which only accounts for the calculable cost from fake followers.
Virtual influencers are sometimes considered fake influencers, too, given their profiles do not correspond to real individuals. It can be argued, their presence and role on the platform are different, in a sense, they are not automated (bots) nor implemented to generate fake likes, fake comments, fake followers, or in any way tampering with the platforms where they are created. Virtual influencers are virtual characters purposefully designed by 3D artists to look like real-life people attending real-life events or situations. Most of these characters' publications are easily distinguished as computer graphics, but some users may be caught off-guard by better-polished images.
These characters are usually portrayed as models, singers, or other celebrities, and their creators write their lives narratives, answer interviews on their behalf, and interact as if they were the characters themselves.
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