Since 2011, Instagram has been one of the fastest growing social media platforms. In the past six months alone, it has added over 100 million users and growth shows no signs of slowing. With over 600 million global users, with 80% from outside of the U.S. and over 400 million of whom check Instagram every day, Instagram has also become one of the largest pieces of the nascent influencer marketing industry.
According to a recent study by US-based agency Mediakix, Instagram influencer marketing could reach US$2 billion (about HK$15.6 billion) by 2019. Influencer marketing itself is projected to be a US$5-10 billion market by 2020.
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The report suggested that the decline of traditional TV and the growth of social media have given rise to the influencer marketing market. From micro-influencers making US$50 (about HK$390) per post to Instagram super stars like Ariana Grande that command half a million dollars (about HK $7.8 million) per post, the Instagram influencer market runs the gamut in terms of following, audience, and engagement; but it has even the biggest brands buying in. Target, H&M, Adidas, Samsung, American Express, Toyota, Fairmont, Microsoft, and many more brands are finding ways to partner with Instagram influencers to reach audiences.
At present, the study estimates the advertiser spend with influencers on Instagram at over US$1 billion (about HK $7.8 billion) per year, with indications of significant annual growth.
The study has also tracked the US-based Federal Trade Commission required hashtags, including #ad, #sponsored, #spon, and #sp. In the past year, there was an increase of 4.8 million uses of these hashtags over years prior.
The hashtags weren’t associated with sponsored posts in every instance, though.
In looking at a sample size of 500 recent posts, 42% of these posts were associated with accounts were fewer than 1,000 followers. It’s unlikely that users managing these accounts are actually being paid for these posts or, if they are being paid, that there would be a significant effect on the size of the Instagram influencer market as a whole.
That leaves about 58% of the sponsored posts from accounts with more than 1,000 followers. Of the 4,792,033 posts recorded over 12 months, that amounts to 2,788,963 sponsored posts.
The average follower size for accounts posting sponsored content was 32,000. Given an average $10 cost per thousand impressions (CPM), an estimated $US320 per post and an estimated total monthly spend of approximately US$90 million were found. This would put the overall total annual spend at over US$1 billion.
With the current annual growth, the market could reach US$130 million per month spend by March 2018 and up to a US$200 million per month spend by March 2019, nearly US$2.4 billion spent on influencer marketing on Instagram alone.