Influencer marketing is one of today’s fastest-growing marketing strategies. You’ve likely encountered a few influencer campaigns yourself if you’re active on any social media platform, whether it’s a simple product endorsement on Instagram or a full-scale product collaboration with a TikTok creator. And with good reason: Influencer marketing has proven to be a low-cost, high-value marketing strategy, even for small businesses.
At its core, influencer marketing leverages influential people on social media to boost awareness of a brand, and it works because it’s more authentic and engaging than traditional brand-to-consumer marketing. Consider this: Studies have found that influencer marketing can return up to five times every dollar invested in it.*
In a digital age where ads appear on practically every screen, audiences are craving authentic connections with real people more than ever, which is what influencer marketing provides. But what is influencer marketing, and how can it be helpful for your small business? Keep reading to learn all you need to know about how influencer marketing works, the best platforms to create influencer campaigns on, plus some examples to help get you started.
*Source: Influencer Marketing Hub
What Is Influencer Marketing?
Here’s the most basic definition of influencer marketing: It’s a marketing strategy where brands collaborate with influential social media personalities in their industry (e.g., fashion, gaming, food, and so on) to promote their products and services. Because influencers have an inherent credibility to their following, influencer marketing allows businesses to leverage that credibility and attach it to their brand, in effect growing their brand presence.
Credibility is also what makes it effective—influencers are more authentic and trustworthy to audiences than traditional brands, therefore making them more relatable. Some ways to leverage influencer marketing are through sponsored image posts, product reviews, and social media contests—find out more about them in our guide to influencer marketing campaigns.
An example of a product endorsement by an influencer on TikTok for a makeup brand (Source: TikTok)
Pet influencers are also a popular content niche—here’s one example from Instagram. (Source: Instagram)
Types of Influencers
Just as there are different types of influencer campaigns, there are also multiple types, or “tiers,” of influencers brands can partner with, each with its own benefits and drawbacks. For instance, an influencer with a large following, aka a “macro” influencer, can grant widespread awareness to any brand, but they also charge a much steeper price. Meanwhile, smaller influencers (i.e., “micro” or “nano” influencers) often have tighter-knit relationships with their followers.
Here are the different types, or tiers, of influencers per number of followers, as defined by Influencer Marketing Hub:
- Nano-influencers: 1,000 to 10,000 followers
- Micro-influencers: 10,000 to 50,000 followers
- Mid-tier influencers: 50,000 to 500,000 followers
- Macro-influencers: 500,000 to 1 million followers
- Mega-influencers: Over 1 million followers
The larger the following, the higher the partnership fee is often the standard in influencer marketing costs. Mega-influencers can charge upward of $25,000 for a single post, while nano-influencers can charge as low as $5—and some are even happy to accept free products in exchange for a shoutout. Be sure to set clear agreements on the mechanics of your partnership to keep things mutually beneficial.
Pro tip: Influencer types can also vary based on their niche or industry (for instance, gaming, fashion, beauty, or travel). Choosing the right influencer for your campaign involves selecting the right one by type and niche.
How Influencer Marketing Works
As mentioned above, influencer marketing works primarily because of its authenticity and credibility. When influencers share content to their followers that mentions a brand, they attach their credibility and authority to that brand—similar to how celebrity endorsements work. However, influencers are unique to social media, which means they generate engagement and interaction more than traditional media.
Authenticity is also the main key to making influencer marketing work effectively. Because there’s an inherent sense of trust influencers share with their followers, the most effective influencer campaigns are those that come across to followers as genuine organic content—not a sales pitch.
Now that you know what is influencer marketing and what makes it effective, here are some of the main steps of how influencer marketing works:
- Identify your main objectives and metrics: Behind every effective influencer campaign is a clear objective or desired outcome. Influencer campaigns are effective for growing brand awareness, but they can also generate social media engagement, drive sales via promo codes, and foster brand loyalty. Your objective is your main guide when planning your campaign.
- Partner with the right influencers: Different types and tiers of influencers are effective for different audiences. Big brands often partner with globally known influencers, while you might find better results by working with smaller micro-influencers in your specific niche.
- Decide on your mode of payment: Larger influencers with established followings are usually contracted and paid monetarily, while smaller nano-influencers are generally more willing to accept free products in exchange for a post. Set clear agreements with your influencer on your mode of payment.
- Create campaigns that play to your influencer’s strengths: The type of influencer campaign you carry out is a key part of your success. Whether you opt for a simple sponsored Twitter post or a dance challenge on TikTok, make sure you play into your influencer’s strengths—both personally and on the platform they have the strongest following on.
- Build relationships with influencers: Another important aspect of effective social media influencer marketing is building trust with the influencers you partner with (or want to partner with). The best influencer campaigns are a result of partnerships that aren’t merely one-off transactions but are built on mutual trust.
- Track your campaign’s effectiveness: The final part of how influencer marketing works is tracking its progress and effectiveness. This involves measuring it against your projected metrics and evaluating if it successfully meets your objectives.
Why Influencer Marketing for Small Businesses Can Work
There’s a popular myth around influencer marketing in that it’s only effective for large-scale brand awareness campaigns, and that it costs a fortune. While it’s true that the biggest influencers can charge thousands of dollars, the good news is that for every big-name influencer, there are thousands of smaller micro- or nano-influencers with much closer relationships with their followers—therefore making them an excellent fit for small businesses.
Take a look at some influencer marketing statistics below that show its effectiveness:
- Nearly 40% of social media users say influencers directly impact their purchase decisions. This is especially true for users in the 18 to 29 age demographic.
- According to a 2022 study, influencer marketing can have up to a 9.2% return on investment (ROI) in terms of increasing follower count.
- Sixty-nine percent of consumers say they trust product recommendations from influencers more than from brands. What’s more, 81% say they’ve taken action—whether by researching, considering, or directly purchasing—after seeing a product recommendation from an influencer on social media.
- Nano-influencers have an average 18.5% higher engagement rate than macro-influencers—which only proves the smaller the circle, the more active the follower community.
- Thirty-nine percent of consumers say the trait they want most from influencers is authenticity, leading more consumers to prefer “relatable” influencers over celebrity or “aspirational” ones.
Influencer marketing is effective—there’s hard proof of that. But it’s also effective for small businesses specifically, thanks to its cost-effectiveness and ability to suit nearly any business goal. Below are some examples of startups and small businesses that have successfully managed to leverage influencer marketing to grow their brand.
Check them out below and what to learn from each:
Helix Sleep’s influencer collaboration also works as a click-to-shop ad. (Source: Instagram)
Instagram has long been one of the most established influencer marketing platforms. And while it’s home to some of the biggest-name influencers, it also has plenty of value for small businesses, like in this influencer collaboration post from mattress brand Helix Sleep, which also functions as a click-to-shop Instagram ad.
In a landscape where more consumers are shopping directly on social media than ever, influencers can help your audiences at the very bottom of the sales funnel convert into paying customers, all within the same platform. Especially if the product you’re introducing has limited visual value or emotional pull (like a mattress), partnering with the right influencer can get you the credibility and audience you need.
TikTok is the go-to for humor and personality, like this example from Juice Beauty and TikTok creator @Lyss. (Source: TikTok)
If Instagram is the platform for high-quality images and visuals, TikTok is the app for humor and personality, and the same goes for its influencers. If you want to show off your brand’s personality and be relatable to your target audience, partnering with TikTok influencers who fit your brand is your best option. An example is Juice Beauty’s collaboration with TikTok creator Alyssa Sabino.
The collaboration allowed Juice Beauty to leverage the influencer’s personality and sense of humor and attach it to its brand. Plus, it also consistently replied to comments from users under the post—another key part of TikTok influencer marketing, given the platform’s high engagement rates.
Ambassador programs are a relatively low-cost way to keep a constant online presence. (Source: Instagram)
One of the most effective types of influencer marketing for small businesses is brand ambassador programs. Brand ambassadors are influencers who create content on an ongoing, long-term basis, usually in exchange for discounts or commissions. They’re overall a more sustainable form of influencer marketing and are effective for generating consistent engagement and keeping your brand top of mind.
An example of a business that does this well is the outdoor wear brand Vessi. Its brand ambassadors create content across multiple social media platforms, effectively growing the Vessi brand on various channels.
Popular Influencer Marketing Platforms
Knowing what influencer marketing is also involves understanding its platforms and how they work. No two social media platforms are the same, and therefore no two influencer campaigns should also be identical on every platform. For instance, Instagram is where you might collaborate with lifestyle, fashion, or other visually oriented influencers, while YouTube is often the go-to for product reviews or unboxing videos.
Keep reading below to learn more about the influencer marketing platforms you can use and how to leverage each:
TikTok Influencer Marketing
TikTok is a steadily growing platform for nearly any niche, from fitness to arts and crafts. (Source: TikTok)
You probably know TikTok best as Gen Z’s favorite platform to learn the newest dance craze. And while dance crazes certainly are still popular, TikTok is also a fast-growing influencer marketing platform for nearly any niche, from beauty to crafts. If your business has a very specific industry and target audience, you’ll have the highest chance of finding the most suitable influencer on TikTok.
TikTok also has some of the highest engagement rates out of other social media platforms. And with short-form videos as its main content format, there’s plenty of room for creativity and personality, from day-in-the-life videos to humorous first-person interviews. Some other popular influencer campaigns are hashtag dance crazes, challenges (e.g., the #LidFlipChallenge), or “get ready with me” videos.
Instagram Influencer Marketing
Instagram is still the reigning platform for visuals and lifestyle content. (Source: Instagram)
Instagram is still the reigning platform for highly visual content like fashion, beauty, food, and other lifestyle genres. However, recent years have also introduced Instagram Reels, which are TikTok-style short-form videos—however, unlike TikTok, they skew more toward lifestyle than humor.
Overall, influencer marketing for small businesses on Instagram is often most effective for brands with high visual value, thanks to its image-centric format. Some of the most popular Instagram influencer campaigns are product endorsements, contests and giveaways, and hashtag challenges.
YouTube Influencer Marketing
YouTube is the original influencer platform, and still the default for videos. (Source: YouTube)
While Instagram and TikTok may be leading the landscape today, YouTube was the real birthplace of influencer marketing in the early 2010s, when vloggers with followings would often share product recommendations with their subscribers. YouTube’s influence still stands today—it’s still the number one platform people go to for product reviews, demos, and unboxing videos.
So it comes as no surprise that brands that benefit the most from these explainer content types, such as tech brands or software as a service (SaaS) businesses, find the most success on YouTube—the platform’s long-form video format is a natural fit. Other industries that can also leverage YouTube are gaming, beauty, and family lifestyle.
Facebook Influencer Marketing
Facebook still has the biggest audience of any other social media platform. (Source: Facebook)
While not as popular as other influencer platforms, Facebook still has plenty of value—it’s currently the most-used social media site in the world and is a pioneer in social media. Nearly everyone is on Facebook, from Gen Z to Boomers, so it’s the best platform if your goal is widespread brand awareness.
Facebook is also versatile—it accommodates images, videos, carousels, text posts, and blog links, and it has an audience in just about every niche and interest. For instance, there are thousands of interest-based Facebook groups, from pet lovers to home cooking enthusiasts. Facebook is also an effective platform for social media contests and giveaways.
Other Influencer Marketing Platforms
While the platforms above are some of the most popular for influencer marketing, other platforms have influencers too, such as Quora, LinkedIn, and Reddit. These platforms offer different ecosystems, discussion subjects, and audiences you can reach out to. For instance, for all things gaming—especially livestream gaming—Twitch is the default platform. Here are the other influencer marketing platforms to consider when planning your campaign:
- X (formerly Twitter): X influencers are similar to Facebook influencers, except with shorter character limits and more “thread”-type posts. X is also the go-to for real-time updates and has a large audience base of tech, sports, and wellness enthusiasts.
- Reddit: Reddit’s most unique point as a platform is its user base, which mostly consists of adult men aged 18 to 29. Users on the platform interact via topic-based “subreddits,” and each usually has its crop of influential figures. Some of the platform’s most active topics are gaming, science, music, and food.
- Quora: Quora is unique in that it’s less a social media platform than a question-and-answer forum, similar to Yahoo Answers before it. Quora influencers are also usually topic-based—they’re often experts in a specific field, like science and technology or parenting, who often get many upvotes on their answers.
- Twitch: Twitch is often synonymous with livestream gamers, as they’re the platform’s biggest user base by far. Gamers use Twitch to broadcast their games live to their followers, and influencers on the platform often advertise gaming-related products, but also tech and gadget brands.
- LinkedIn: Unique for being the only business-to-business (B2B) platform, LinkedIn influencer marketing usually features thought leadership posts. Credibility is even more important in LinkedIn influencer marketing, as its audience mostly consists of professionals and business executives.
Frequently Asked Questions (FAQs)
Influencer marketing is a type of social media marketing where a business partners with influential personalities on a social media platform such as Instagram or TikTok to promote its brand. Some types of influencer marketing campaigns are product reviews, social media contests, and sponsored posts. Influencer marketing works by attaching influencers’ credibility with their followers to the brands they partner with.
Yes—influencer marketing works because it attaches influencers’ credibility and authority with their followers to the brands they promote. When an influencer promotes a brand, they not only bring new audiences to that brand, but also signal it as trustworthy to their followers. Influencer marketing can even convert more sales through influencer-specific promo codes. And, because it’s done on social media, it’s effective at generating engagement.
Influencer marketing can help small businesses primarily by increasing brand awareness and creating a dedicated online community. Small businesses can partner with an influencer to bring their brand in front of new audiences via product endorsements or giveaways, while social media contests can help create an active online community. Brand ambassador partnerships can also secure a regular stream of content to keep your brand top of mind.
Bottom Line
Influencer marketing isn’t just a niche strategy anymore. It’s a proven and effective way to generate wide awareness and engagement for your brand, while still being budget-friendly for any small business. Knowing what influencer marketing is can help your business in plenty of ways, at every stage of the customer journey. The instructions above show how influencer marketing works—keep them in mind as you build yours to get started on the right track.