Influencer marketing is now a billion-dollar business.

And despite challenges like disclosure rules and fraud, there's no reason to believe that it won't continue to be an important part of the way brands market their wares to consumers via social media.

Currently, influencer marketing is one of the few digital channels in which brands don't have to pay the dominant players for access to an audience. Yes, there are agencies that help facilitate deals between brands and influencers, as well as influencer marketing platforms that largely automate transactions. And some brands even ink deals directly with influencers.

But running an influencer marketing campaign on Facebook or YouTube, for instance, doesn't require a brand to pay Facebook or Google. That, however, could soon change as Facebook has announced a new feature that will let influencers tag the Facebook Pages of the brands they're posting sponsored posts for. As part of this, brands will not only gain the ability to view analytics data for those posts, but they'll be able to pay to boost them beforehand.

As Digiday's Yuyu Chen explains, "At first glance, it seems like Facebook is simply making it easier for advertisers to run paid promotion for influencer marketing, but the worry from execs is that Facebook's algorithm will gradually suppress influencer posts if brands don't boost them."Matt Britton, the CEO of influencer marketing firm Crowdtap elaborated:

Most brands are using influencers on Facebook to rely on their following base for organic reach. But now, in order for brands to support influencer posts, they have to pay to play. This means that organic reach doesn't matter anymore, and influencer marketing will not be the same.

Ouch.

What about Instagram?

Facebook owns Instagram, one of the most popular platforms for influencer marketing, and for obvious reasons has increasingly sought to create a unified ad platform through which companies can easily create and execute campaigns on both Facebook and Instagram.

As such, it's not a stretch to speculate that any move Facebook makes to monetize influencer marketing on Facebook could and probably would eventually be replicated on Instagram, and vice versa.

Interestingly, a potential precursor to Instagram influencer monetization came last month when Instagram announced a new feature that allows influencers to tag their sponsored posts. Using the feature, influencers can identify the account of the brand that is sponsoring the post. In doing so, the brand is granted access to view the Insights for the post. 

While presented as a way to "[bring] more transparency to commercial relationships on Instagram," it's not hard to see how Instagram could eventually use the feature to monetize paid posts the same way Facebook is.

How expensive is too expensive?

According to the 2017 NOTICE Influencer Marketing Study, the fees charged by influencers increased 250% year-over-year in 2016. Forbes says that influencers with millions of followers can earn more than $100,000 per sponsored post on popular platforms like Facebook, Instagram and YouTube.

But influencers, like the brands operating on these platforms, don't actually own their audiences. Facebook, Instagram and YouTube own those audiences and with the flip of the switch, they can reduce organic reach and force influencers and the brands they work with to pay up.

If and when that happens, it could dramatically affect the cost of influencer marketing campaigns, which some are already questioning. Last year, Digiday published an interview with an unnamed social media executive who confessed that brands are not only in many cases throwing "too much money" at influencers, but that the returns simply aren't there.

He made a bold prediction – "influencers are going to start disappearing" – and explained:

Brands are going to start realizing the amount of followers you have doesn't mean shit. Just because photos look good and have 200,000 followers means nothing. You can't rely on content creators all day long. For the influencers, their entire business is about relationships and friendships. Someone was at Vice, so uses their friend to do photography. Someone knows someone else at Instagram so gets featured on the trending page. We live and die by these platforms today. 

Even for those who disagree about the fate of influencers and the billion-dollar business they've built, it's hard to disagree with the last statement – "we live and die by these platforms today" – and it would seem that it's only a matter of time before the platforms, knowing this, are going to look to get a piece of the influencer marketing pie.

Depending on how hungry they are, influencers and brands might need to renegotiate the terms of their relationships.

Patricio Robles

Published 21 August, 2017 by Patricio Robles

Patricio Robles is a tech reporter at Econsultancy. Follow him on Twitter.

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