For centuries there have been leaders in government, companies, churches and local communities that influence people through their opinions. Then advertisers took advantage of this phenomenon to influence consumers with print advertisements and commercials. Then came click-through ads and banners on the internet. Now we have social media “influencers.”
What this means is that companies pay people with loads of followers on social media websites to recommend their products by mentioning or “tagging” them in their personal postings. Research shows that these influencers provide considerably more exposure on social media than corporate advertisers’ own accounts.1
Social media is essentially today’s equivalent to chatting with neighbors over the proverbial picket fence. Lawn equipment, kitchen gadgetry, cleaning tips and recipes that were shared through conversation then are similar to how influencers use online platforms to spread the word. Brands love social media influencers because encouraging their followers to buy certain products can create viral trends that drive sales.
The word “influencer” came into vogue in the mid-2010s. Today it refers to a broad mix of content creators, internet personalities and even celebrities who are active on social media. Most influencers specialize in a niche in which they have expertise, experience, credentials or even just a familiar and trustful relationship with their followers.
Influencing can have a big impact on consumerism — especially when you trust the influencer. It’s important to keep an eye on your budget so you are not influenced to buy more than you can afford. However, trust is the key ingredient. Just as you might trust your doctor or dentist, you should have a network of financial professionals that you trust as well. This includes financial planners, tax experts and insurance specialists. We welcome the opportunity to gain your trust for your insurance needs — and promise not to influence you to buy more than you need.
Make no mistake, those Instagrammers and YouTubers are big business. On Instagram alone, brand-sponsored influencer posts reached more than 6 million in 2020.2 Over the past decade, 45% of the world’s population (more than 3 billion people) have actively used social media to help with decision making.3 This includes everything from a celebrity praising (or bashing) an airline experience to the average Joe offering a product review on Amazon. Within the next three years, this “economy of influence” is projected to be valued at $24 billion.4
Who is driving this confluence of influencers? Our youngest entrepreneurs, often referred to as
Generation Z, the oldest of which are 24 years old. And while many of these young adults are eschewing the traditional college/career route, they are innovating new opportunities. Not only are they influencers, but they also comprise a large demographic of the influenced — generating much of those consumer revenues. As they enter “the real world,” Gen Zers are changing the consumer landscape as the first digitally native generation. They are best reached through text messaging and online platforms and drive lifestyle, work and buying trends through word-of-text viral exposure. Gen Z is also more socially active than generations of late and is vigilant in their desire to shape a better world. Judging by their size and spending power, the influence of Gen Z is poised to make its mark for a very long haul.