Influencer Marketing as an Emerging Digital Marketing Channel

EXECUTIVE SUMMARY: INFLUENCER MARKETING AS AN EMERGING DIGITAL MARKETING CHANNEL
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Executive Summary: Influencer Marketing as an Emerging Digital Marketing Channel
Background and Introduction
The art of consumer marketing is complex, broad, and (for most) confusing. Its foundations used to be rooted in traditional media like radio, newspaper, and television. However, that has long passed. Another force has watched its flag fly on this hill of commerce for a long time – digital marketing. Yahoo Finance (2021) stated that the market size for digital marketing and advertising was (in 2020) estimated to be US$350 billion. Further, the market is projected to be US$786 billion in size by 2026 (Yahoo Finance 2021). If anything, this forecast indicates that digital marketing is going to be around for the foreseeable future. While one can take that to the bank, the nature of digital marketing may morph, transform, or change dramatically in the coming years. As more intelligent algorithms and platforms come online, they will dramatically change the face of digital marketing. For this reason alone, businesses must maintain an alert posture to exploit the advantages of new marketing tools before their competitors.
According to Varadarajan et al. (2021), the rising cost of digital marketing is an even more compelling reason for businesses to maintain this alert posture. The cost of acquiring a new customer has risen steadily in the past few years as increasingly more businesses flood online for digital media buying. In other words, it is becoming more competitive and (therefore) costly for marketers to advertise online. The increasing demand for digital ads vis-à-vis Google’s, Facebook’s, Instagram’s, or TikTok’s limited inventory continues to operationalize a fundamental law of supply and demand, pushing competition high and prices with it (Choi et al. 2020; Lee & Cho 2020, pp. 556–564). Digital advertising platforms have tried to supplement their inventory by partnering with third-party data sources to stretch their inventory. Still, as more businesses flood the market, competing to get their message in front of a limited inventory of eyeballs, these prices will only go higher. This reality is already biting most businesses. According to the 2023 Shopify Commerce Trends, “Brands are losing a record average of $29 for every customer they acquire—a 222% increase in the last eight years” (Shopify Plus 2023, p. 19). Despite change being a constant in this market, price is (undoubtedly) the force that will force businesses to adapt and innovate, becoming one of the forces that will transform the face of digital marketing.
Businesses are change agents in the digital marketing scene through their choices on which platforms they invest their marketing spend. The cost of digital ads is only going to soar, as this article has established. As this trend unfolds, businesses will incur higher costs to reach the same audience size (Lee & Cho 2020). It will also force businesses to exploit available avenues to maximize thei...