How does an influencer - who is generally not a household name - stand a chance against a celebrity endorser? But why do brands go for an influencer? And how do they decide which option to go for?
Celebrity endorsements can turn out to be a double-edged sword. A study by Harvard professor Anita Elberse found that high-profile endorsements "generate a 4 per cent increase in sales, which corresponds with around $10 million in additional sales annually and nearly a 0.25 per cent increase in stock returns." If things go wrong, though, it can be costly. A U.C. Davis study estimated that Tiger Woods' scandals cost the shareholders of companies he endorsed up to $12 billion.
Influencer marketing is less risky but then the rewards are less too although it can make the brand relatable and accessible. It is less expensive but does not have the grand scale that a celebrity endorsement brings with it.
So, what is the answer?