Selling products or services is at the core of almost every small business, but the challenge beyond having a good product or service to sell often lies in figuring out how best to market it. For decades, brands have struggled with the promotional component of their marketing mix -- how to best persuade others to buy and use the product or service when price or utility isn't enough.

The use of influencer marketing is not a new concept; however, the way it is employed and the technologies surrounding the space have absolutely changed in the recent past. It has also gone from merely being a smart addition to the marketing mix to being the centerpiece of it for many, particularly in the health, nutrition, fitness and sports industries.

While athletes and celebrities have been used in association with TV commercials and print advertisements for many years, even when the product or service promoted has nothing to do with industries like health and fitness, a clear shift has been made by businesses to focus on Internet influencer marketing and even a premium placed on not only who the athlete or celebrity is as well as his/her notoriety, but followings and engagement metrics that help reveal true influence in the online world.

As such, traditional athletes and celebrities are often overlooked by the brands of today for social media celebrities who are commonly described as being "Instafamous" (based on their Instagram followings) either based on their physical attraction, provocative content and/or clever methodologies to amass a large number of follows and likes. Very rarely are these Instafamous people popular because of something they have done on the field of play or their list of credits for work accomplished on the big screen.

Finding the right influencers to associate your business with, and at the right price point, can be a very difficult task.

Social media followings are often purchased by so-called influencers, rendering the content they deliver to be almost useless, as even the engagements may be manufactured by bots as opposed to real-life human beings capable of purchasing products or services. Lack of trust is a common issue in all markets, including social media. However, it also presents a viable opportunity to find solutions to the issue.

Take into consideration a company like Patron -- a platform currently focused on the Japanese market where influencers are used by brands at a very high rate -- which is trying to build a new contract mechanism between influencers and brands whereby brands may be able to get a better sense of the influencers worthy of their attention based on ratings built up over time.

Additionally, a site like Twitter Audit can help you better determine whether an individual has organically added users on the social network Twitter or purchased them, causing the value of each follow to drop significantly.

Separately, figuring out how much to pay a legitimate influencer can be tough as there is  no true industry standard as to how much an individual post should cost or what the return of investment may be from influencer-to-influencer.

In 2016, I learned that one social media influencer, Amanda Lee, was earning as much a $5,000 per Instagram post. That price may have gone up since publication as Lee's following and engagement have likely increased over time as well. 2 years ago she had almost 4.5 million followers. Today, she has roughly 12 million following her on Instagram.

A few years ago, the value of a tweet from LeBron James was pegged at a value of roughly $140,000. That's the value for a single promotional tweet! It is expected to be even more valuable as James' follower count has  gone from 23.2 million when the article was written, to roughly 41.6 million today.

The bottom-line is that companies have a need to continue to shift their marketing mixes to focus more on their social media strategy, but challenges remain in the way that these influencers are valued and in determining how much they should be paid, which also presents opportunities for entrepreneurs to build out tools that assist in the diligence process.

Published on: May 30, 2018