By Sunny SUN, Liony XUE, Crystal LIM, Doris CAI, ZHAO Wenbing, LI Hongning
Internet celebrities like him are replacing the traditional advertisng system that endorsed by supermodels and celebrities these days. Most of them start from sharing their own living styles, opinions, fashion tips or others contents on their social media account. As technology develops, people pay more attention to them and their followers start to increase sharply. The society gradually finds out that this could be a new kind of business model by turning the internet celebrities followers to consumers. Brands reached them for using their fame to sell their products and they also started their own business.
This phenomenon has become a world wide trend influencing not only the internet celebrities but also the way people consume, corporate marketing and new business establishing. On this point, people also curious about the developing trend on this new concept and to what extend it would be able to influence the whole economy development.
Internet Celebrity
Internet Celebrities, also called Wang Hong (in Chinese), Key Opinion Leader (KOL) or cyberstar. They usually indicate people that become famous by mean of the internet, they could be having more than a million followers and subscribers on Instagram, Wechat, Weibo, Facebook or other social media and most of them gain profit by relying on the broad follower base.
How do Internet Celebrities Gain Profit?
Online Retailing
The internet celebrities normally generate income from two main different ways. First, online retailing which the internet celebrities may have their own business or online shop. They work as a model, promoter, and shop owner to sell self-branded products through social media and online sales platform such as TaoBao and Instagram shop. They post pictures or live videos of themselves wearing their own products on platforms, giving out fashion or make-up tips to influence and turn their followers into consumers. For example, Zhang Dayi who is a famous internet celebrity in China earns more than a hundred million a year by owning a TaoBao online shop.
Advertising
For another type of internet celebrities who already have their own follower base, big companies may approach and pay them for advertising products. They act as an ambassador for the company, posting pictures and videos wearing or using a specific product following with some positive comment captions to help the company reach a larger user base. Companies pay the internet celebrities based on every story or post. Karen Wen, an internet celebrity in Hong Kong, said “For like 80 to 100k, one can charge up to 5000. And sometimes people charge even more.”
(Karen Wen is internet celebrity on Instagram who has 142 thousand followers.)
The habit of sharing pictures on social media helps her attract and accumulate followers. As she gets more and more followers, she realized that being influencer could transfer into a business.
Karen’s main job is to promote products for different brands on Instagram. Since she has enough followers which can be potential target customers, company brands may contact her directly for paid promotion. In addition, PR agencies that serve as intermediary for other companies can pay her to promote their brands.
Multi-Channel Network Institution
Apart from individual mode, another channel as Multi-Channel Network (MCN) institution also helps to optimize the business model of internet celebrity economy. These institutions will identify the needs of advertisers and assign tasks to the signatory internet celebrities. Phyllis Wong, the founder and managing director of Oink Oink Communication Limited, a public relations agency working with internet celebrities, introduced their company features, “As most of our clients are the leading brand in the market and has the need to promote their brands at social media too, so they need our network with these Internet celebrities to help promote their brands at social media by their postings.”
Jack Sun, currently a student in Tsinghua University, is an internet celebrity on the social media. Internet celebrity is not only just a title but also a living job for him. However, his profit model in this new industry is to sell products rather than promoting other brands.
Instead of becoming a influencer by chance, he is supported by an agency that provides him with influencer marketing team as well as strategies. The agency offers source and channels to the studio that Jack is working with, with the aim of creating a group of internet celebrities with high visibility and credibility that could influence purchasing decisions.
In return, Jack and his team will promote the products provided by the agency. With his large followers base on social media platforms, he can easily sell products by posting ads on his media page. Since he earns money for the agency, he will get bonus too. “Our studio doesn’t design products. We are actually a group of brokers,” said Jack.
Trend of Influencer Marketing
Influencer Marketing as an Independent Industry
According to related data, influencer marketing suddenly boost between year 2015 and 2016. It is quite surprising when we take a close look into influencer marketing, the large market size of it is more than enough to make it as an independent industry. According to a data report of China e-commerce influencer marketing revealed by CBNData in year 2016, the prediction of the market size of influencer marketing is 58 billion which is way too much than 2015 China’s box office which amounted to 44 billion.
Internet Celebrities as a Career Choice
A survey conducted by Tencent, the internet giant, found that 54% of college-age respondents in China choose internet celebrity as their first career choice due to prosperous profit, fame and free products from branded company. In fact, it is not far from internet celebrities to become a career choice with the maturation of MCN institutions. According to iResearch, it is possible to be a new trend for internet celebrities to sign with MCN institutions to work as a professional internet celebrities. The prove is, 93% of top celebrities have signed contracts with MCN institutions that indicates more and more people willing to take internet celebrities as their full-time job.
Increases of Followers
Another insight report released by iResearch about China’s influencer marketing in year 2018 shows that the number of celebrities with more than 100 thousand and one million followers increased sharply by 51% and 23% respectively. The drastic increase of followers and subscribers in different social medias and platforms as a result of the universality of internet and modern gadgets is one of the main reasons for the growth of online celebrities and leads to the increasing of the influencer marketing market size.
Influence of Influencer Marketing on the Economy
Dr. Erin Pik Ki So, an academic lecturer of economy department in Hong Kong Baptist University said that it is hard to say what is the direct impact of influencer marketing towards the whole economic system in a particular place or region. However, it is easy to say that it does help the emerging of some start-up and small-scale business. “It comes up with a wave called ‘the rise of start-up and entrepreneurship’”, said Dr. So.
(Interview with Erin)
For big companies, promoting products through internet celebrities may probably be only one of their promoting techniques or strategies, a new marketing strategy which matches the fast growing technology trend in the 21st century, reaching a huge range of potential customers in the society to boost their sales. But for new emerging and start-up business, they usually do not have enough funds to hire superstars, celebrities or professional models for their company promotion and brand building in the company’s starting stage. Thus, internet celebrities could really help them to build up their brand, bring new customers, create popularity and even establish a corporate image to keep the business running smoothly.
Influencer Marketing Future Development
Although the trend of influencer marketing is developing rapidly, but it is overall a relatively new concept which has only sprout no more than five years with a lot of uncertainty that poses difficulties for the scholars to predict its future. “It is something new, for quite a lot of scholars, we are still observing what happened in this new phenomenon,” said Dr. So. However, she also said that the future of influencer marketing largely depends on to what extent internet celebrities can engender trust among people.
Trust of People Towards Internet Celebrity
It is true that the authenticity and quality of products promoted by some of the internet celebrities are questioned as this could only be a form of paid advertising and content creation. For Karen Wen, she actually faces a lot of these situations. “There are so many brands that reached out to me. But when you check out their Instagram accounts it was like they are not very knowledgeable about branding. I will never use the products and I do not even accept those even if they pay a lot. You definitely do not want people to think that you are promoting it because of the money.”
According to Dr. So, “People with more followers, will be more picky to let other people to make use of their icons or other things in their Instagram”. This makes sense because it is related to their own reputation. For example, celebrities usually only promote for big companies with high credit because the quality of their product is guaranteed. However, the low entry barrier for people becoming an internet celebrities nowadays is actually challenging the trust of audience towards internet celebrities when some platforms even buying likes and ranks to make themselves looks more popular and attractive. Meanwhile, it is becoming more and more crucial for internet celebrities to create good promotions which maintain quality as Dr. So believes that trust is essential to make any economy to be sustainable.
Changes of the Nature of Influencer Marketing
On the other hand, business model of influencer marketing is becoming more commercialization as a large amount of MCN institution established in recent years. Dr. So believes that this would harm the influencer marketing and also the prospect of internet celebrities to some extent. “When the nature of that kind of things change (self-opinion sharing to commercialization), people may not trust internet celebrities anymore because if I can trust something which is commercially produced, then why don’t I trust big company?” said Dr. So. From the perspective of the internet celebrities, too restricted to the contract signed with their company may caused them lose their own traits as an individual influencer. Also when signatory rigid internet celebrities becomes a popular trend, some real internet celebrities may need to work harder to find some ways to distinguish themselves from those commercial internet celebrities.
“It would work for at least couple more years to the local market until a new impactful media is coming soon to replace the KOL influence.” said Phyllis. However, as a new phenomenon facing a lot of challenges and uncertainty, the future of influencer marketing is still worth exploring and expecting.