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How Influencers on Social Media Help Brands Generate Revenue

Nowadays, companies no longer limited themselves to regular advertisements that we see on TV and news websites. In fact, we have been seeing more and more propagandas that are conducted in a more discreet way, specifically by Social Media influencers. Brands are investing more of their time and money on influencers. Bloglovin’ found that 63 percent of marketers have increased their budgets for influencer marketing in 2017. This increase in budgets suggests that brands understand the value of influencer marketing and how they can leverage it to boost their performance.

To account for why influencers are so influential, we can use what we learned about networks. From the image that I attached above, we can see that the information of a brand and its product are being sent social influencers who are usually the center of big clusters in the social networks. The influencers we know about these days are usually celebrities or people who have gained significant amount of followers on social media such as Instagram. Because of network exchange phenomenum, the person with the largest number of options is the one who has the biggest power. Being the center of clusters, they have the most amount of ties to other people, and such connections give them a lot more power than anyone else in the network. And because they have so much power, agreeing with them on what product to buy usually generates more payoff so more people buy the product promoted by them, which subsequently increased people’s confidence in the product. Such a system always works very efficiently because information sprawl like epidemics. The more people know about a brand, the faster its reputation will spread. In addition, it is also a very stable system, because people in a cluster not only all connect to the center of the cluster, but also others in the same cluster. Thus as more people buy the product, the system strengthens itself by creating the image that everyone around me is using the product, and I should keep using it. The only way to change the system is to persuade the influencers not to use the product anymore.

However, to advertise a brand successfully in this way requires the brand owner’s ability to find the fittest influencer for the brand. Because if the influencer’s personal style is not consistent with the brand, the collaboration won’t be able to establish enough credibility, and as the result, the brand won’t be able to convince its potential customers.

 

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