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By James Blacker, Benzinga
The 21st century has witnessed the rise of influencer marketing as a vital tool for brands seeking to boost their online visibility and reach new audiences. It has evolved from a niche strategy into a multi-billion-dollar industry that shapes consumer behavior worldwide. And its showing no signs of slowing down, with a projected CAGR of 31.78% over 2024-2029 that would bring the market size to $94.21 billion as businesses of all sizes leverage the advantages it provides.
In a nutshell, influencers are individuals who have a significant social media presence and a dedicated follower base and, therefore, have the power to affect purchasing habits by posting content on platforms such as Instagram, YouTube or TikTok. While traditional advertising using celebrity endorsements can sometimes be seen as unrelatable by the everyday individual, influencers can deliver content that is perceived to be more authentic and relatable.
Just two decades ago, however, this phenomenon was still in its infancy.
Early Seeds Of Influence
IZEA Worldwide Inc. (NASDAQ: IZEA) Founder and CEO Ted Murphy recognized early on that independent creators were starting to hold more and more sway over public perception. In 2004, he created the concept of e-seeding within his interactive agency. This involved leveraging the influence of bloggers and MySpace celebrities to promote brands.
The following year, in 2005 he launched the BlogStar Network, a database of bloggers that the team would reference to send out offers and manually negotiate brand deals. This approach was initially successful, but scaling this type of marketing would require technology.
PayPerPost And Industry Disruption
In 2006, Murphy created the first influencer marketing platform called PayPerPost a marketplace that paid bloggers to create content for brands.
Initially, sponsored social media content was widely viewed with skepticism. In an era when social media was still free of advertising, Murphy was attacked by many in the industry who were concerned that this new model would lead to a flood of inauthentic content on the internet.
Despite raising significant funding and introducing the first disclosure policy in the first year, it still seemed that the industry was against Murphy and unable to see his vision, with countless negative articles written about PayPerPost in that year.
Expansion And Recognition
In 2007, the company rebranded as IZEA. In the same year, it created a new platform called SocialSpark in response to the rise of Twitter and other social media channels. Two years later in 2009, as demand for Twitter campaigns increased, IZEA launched SponsoredTweets.com.
It was around this time that the industry started to take influencer marketing more seriously, and over the next few years, more and more publications began to offer sponsored posts, including the early critics.
Today, influencer marketing is a growing multi-billion-dollar space. According to IZEAs historical transaction data, the average cost of a sponsored blog post grew 98X in the first decade, from $7.39 in 2006 to $726 in 2016. The average cost hit $1,492 in 2022 and has continued to rise, with some creators charging tens of thousands of dollars for a single post.
Looking Ahead
Speaking at the Adweek Creatorverse event in 2023, Murphy noted that the influencer marketing industry is set to undergo significant changes in the coming years with rapid improvements in AI technology.
Research carried out by IZEA Worldwide Inc. (NASDAQ: IZEA) indicates that 66% of influencers are already using AI in their daily life. Furthermore, 38% are using AI to generate images.
While the technology is still developing, creators will likely soon be able to use AI to produce realistic images of themselves, anywhere in the world, doing anything.
As the industry adopts this new technology, the same concerns over authenticity, content quality and disclosure are sure to arise.
However, in Murphys words: The magic that happens when you give people access to new technology, the opportunity that spews from disruption you can choose to ignore it, you can try to run from it, or embrace it.
Featured photo by dole777 on Unsplash.
Benzinga is a leading financial media and data provider, known for delivering accurate, timely, and actionable financial information to empower investors and traders.
This post contains sponsored content. This content is for informational purposes only and not intended to be investing advice.
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