Endorsements on social media are a lucrative and rapidly growing business
By THE DATA TEAM
HAVING just received a fancy new watch from TAG Heuer, Cristiano Ronaldo, a footballer, posts a photo of himself, wrist aloft, to his Instagram account. He dutifully thanks them for their “kind gift” and signs off the post with the company’s advertising slogan #dontcrackunderpressure.
This is the latest frontier of a rapidly growing industry. Since January, more than 200,000 posts per month on Instagram, a picture-sharing app owned by Facebook, have been tagged with “#ad”, “#sp” or “#sponsored”, according to Captiv8, an analytics platform that connects brands to social media “influencers”. Hiring such influencers allows companies to reach a vast network of potential customers: Mr Ronaldo has a combined following of 240m people across Facebook, Instagram and Twitter.
Social media offer brands their best opportunity to reach cord-cutting millennials: Snapchat, another picture-sharing app, reaches 40% of all American 18- to 34-year-olds every day. Moreover, these platforms can make consumers feel they have gained unprecedented access to the lives of the rich and famous. That lets sponsors interact with their target audiences in ways that traditional advertising cannot match. In turn, demand from marketers for these channels has made social media lucrative territory for people with large online followings.
Captiv8 says someone with 3m-7m followers can charge, on average, $187,500 for a post on YouTube, $93,750 for a post on Facebook and $75,000 for a post on Instagram or Snapchat. Nice work if you can get it.
