A recent study estimated that 13 million social-media influencers generated $7 billion in revenues last year. The hottest platform of late has been fast-growing Instagram, which seems to have avoided much of the drama that has so buffeted parent company Facebook.
Paid advertising is necessary for digital marketing because the big platforms have made organic reach nearly extinct. Search ads, which have undergirded profitability for Google and YouTube, are also seeing some eroding popularity.
Cost-per-click, which dropped 28 percent on Google in Q3 of 2018, has fallen 14 straight quarters. That decline is a harbinger of digital marketing’s evolution, as people use other tools, including voice skills, SEO, branded content and content on shopping-friendly sites such as Pinterest for marketing
But what site is more shopping-friendly than Amazon, which now controls more than 50 percent of the e-commerce pie in the United States? The company is even winning business in search, because more consumers are beginning to research their purchases on Amazon rather than Google.
As well, Amazon is now routinely host to ferocious price wars that can break out at any minute for a given product, sometimes forcing a brand to bid against its own channel partners for customers. That’s helping drive Amazon’s growing share of the U.S. advertising business. It's now third behind the Duopoly. During its last quarterly earnings announcement.
Amazon reported $3.4 billion in “other” revenue, mostly advertising, and up 95 percent year over year, helping drive the company’s record profits. eMarketer now forecasts Amazon will grab nearly 9 percent of 2019’s digital ad market.
More than a year ago, Amazon also created its own influencer program, a more exclusive version of its affiliate marketing system that is open only to high-end influencers on Twitter, Facebook, YouTube and Instagram. Participants get a custom storefront and vanity URL, choose products they want to spotlight, and receive a share of resulting sales revenue.
For a smart brand, getting its products in the right influencer stores can be a powerful opportunity to connect directly with that influencer’s most devoted fans in a commerce-connected way that Google, Facebook, Twitter, and Instagram still can’t match, at least not yet.
And it’s not just the influencer program that bears watching.
Amazon keeps experimenting with ways to make its gamer-focused live-streaming platform Twitch a broader phenomenon. Already, 3 million on-air personalities stream at least some programming on Twitch each month.
Twitch has around 1,000 advertisers, amongst those including brands like the Hollywood studios and networks, game publishers, and such Gen Z-focused brands such as Doritos, Budweiser and Unilever’s Dollar Shave Club. They are the ones who I think are really embracing the trends that are happening in the marketplace.
Creators have to be highly entrepreneurial, taking advantage of whatever systems a given platform provides for them to make money. Twitch offers more of those money generators, from digital currency to subscriptions, than just about any social-media outlet.
Other platforms increasingly are emulating those options, but no one yet has quite matched Twitch’s range. The opportunities are endless for sponsored content, though it takes a certain confidence from the brand in the trustworthiness and reliability of a given influencer.
On any given day, Amazon might be the world’s most valuable publicly traded company. Last year, it passed $200 billion in annual revenue for the first time. Amazon is trying multiple approaches to leverage influencer marketing and the influencer economy. As bets go on the future of influencer marketing, Amazon seems like a good one.