LONDON/CANNES, FRANCE – This spring, Pernod Ricard SA’s Malibu Rum paid American singer Nick Jonas to host a competition in Vietnam that began with 33 Instagram stars battling to catch fake pineapples while flying off a giant waterslide into the sea.
In one month alone, videos and pictures from the “Malibu Games” were viewed 2.4 billion times online, showing the potential for so-called influencer marketing to reach social media-mad consumers that may overlook older, traditional brands.
This kind of advertising, where celebrities and popular bloggers earn money by posting about products, has developed over the past five years on Instagram, Snapchat, Twitter, Facebook and YouTube.
Influencer marketing found early popularity with beauty, fast fashion and fitness brands, but has now spread across the spectrum, even though some analysts question whether it actually works.
It accounted for about $1 billion a year of advertising spend on Instagram alone last year, according to influencer marketing agency Mediakix, which predicts the entire market could reach $10 billion by 2020; still tiny in the near $600 billion ad realm, but growing fast.
Thibaut Portal, leader of Pernod’s global media hub, said influencer marketing was playing a “growing and key role” in the French spirit maker’s campaigns and was in use on all its major brands.
Influencers give Pernod more options for spending marketing dollars online, an important destination for liquor companies which have restrictions on television advertising in some places, such as France.
Sometimes brands use social media stars with millions of followers to drive awareness of a brand, but other times pick “microinfluencers” with thousands of followers who, as experts in their industry, can affect choices.
“We are not interested in working with big, massive influencers with four or 5 million followers (when) the week after, the same influencer is going to post a picture of a washing machine,” Portal said.
The rapid growth of influencer marketing shows how the broader ad industry is changing as brands struggle to reach consumers in a world of fragmented content on the internet, now the biggest platform ahead of TV.
Brands will pay anywhere from $10,000 to more than $100,000 for a single social media post, experts say, depending on the size, engagement and loyalty of the person’s followers. This can buy online content more cheaply than traditional advertising.