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As Facebook moves to monetise Instagram, fears are rising that influencers could lose their edge

Brendan Robinson, who first found fame as an actor in the US teen drama Pretty Little Liars, discovered several years ago that posting photos of himself on Instagram with former co-stars would prompt countless clicks and comments from nostalgic fans. 

Deciding to profit from his online popularity, the 29-year-old has since become a fully-fledged Instagram influencer, with more than 830,000 followers. Over the past 18 months, brands from insurance groups to ice cream sellers have paid him — typically several thousands of dollars per post — to promote their products. 

But despite his success, he is now deeply worried over the future viability of his chosen career. 

After explosive growth, the $8bn influencer marketing business may for the first time be showing signs of strain. Brands are beginning to question the returns that influencers actually generate, especially as the get-rich-quick appeal of digital celebrity is now attracting fraudsters who pay for fake followings.

Instagram’s recent decision to test hiding “likes” — a key metric that signals popularity — caused particular concern, prompting questions from influencers over how they will demonstrate their worth to advertisers if the measure is permanently enforced.

Some argue these are normal growing pains as the market matures. But pessimists fear the era of unbridled “influencing” is drawing to an end. According to a report by InfluencerDB, engagement rates — the number of likes on posts as a percentage of the influencer’s follower count — have dipped over the past year.

“I’ve had that worry laying at night thinking ‘Oh shoot’ — is this going to go away in two years?” Mr Robinson said, adding that he was mulling making different types of content — such as podcasts or blogs — elsewhere. 

“I’m bracing myself for the influencer marketing industry to change, and maybe it’s something you can’t make a living from any more.” 

The rise of influencers came after the shift of younger millennial and “Generation Z” consumers away from traditional media and towards social platforms.

According to data from marketing firm Izea, the average cost of placing a sponsored post on Instagram grew from $134 in 2014 to nearly $1,650 today. For mega-celebrities with millions of followers, prices can run into the hundreds of thousands of dollars per post. 

“For the business-savvy creators, their income has increased around 200 to 225 per cent for the same deal,” said Matt Zuvella, vice-president of marketing and operations at influencer marketing agency FamePick.

But many in the industry cite “influencer fatigue” — where the marketplace has become overly saturated with vainglorious players, some of whom artificially inflate their numbers — as a worry. Meanwhile US and UK regulators are increasingly scrutinising the space, issuing guidelines urging influencers to more conspicuously disclose their relationships with brands.

“Influencers have completely eroded public trust. Consumers are so bored of seeing another product [after product],” said Amber Atherton, former reality television star on Made in Chelsea who now runs Zyper, a marketing software company that helps advertisers find fans to advocate for them. 

“Brands are completely exhausted with the greyness of this industry,” she added. 

Instagram said its decision to test hiding likes globally is designed to combat the adverse mental health effects of competitive popularity. 

While some argue that the move could encourage influencers to focus on the quality of their content and other more meaningful metrics, the change has provoked some anger.

“Likes are a way of gauging how good content is,” said Ben Phillips, a comedy influencer with a 1.8m-strong Instagram following who goes by the tagline “The God of Pranks”. “Should we take away the star rating [system] for movies at the box office now?”

Instagram’s recent shift to facilitate more direct ecommerce on the platform is likely to provide a new source of revenue for influencers. But it may also see Instagram demand a greater share of their earnings.

“The theory is that Facebook and Instagram have caught on that [influencer] advertising on the platform has become an enormous and very lucrative industry — and they’re not getting a cut of that,” said Mr Robinson. 

One common claim is that Instagram has over time changed its algorithm to purposefully reduce the “organic reach” of users — how many people posts are shown to for free — so that brands are forced to pay for formal ad slots if they want to reach an audience at scale.

Market watchers point to Facebook proper as a cautionary tale, which changed its algorithms to limit organic reach in its news feed several years ago, casting the move as a shift to surface more “relevant” content to users from friends and family. “It’s fitting a pattern,” said Kieley Taylor, global head of social at GroupM. 

Sceptics also suggest Instagram’s likes-hiding test could be part of encouraging greater ad spend by brands, by nudging them to place ads within Instagram’s disappearing “Stories” feature, rather than in the photo feed. Others question whether Instagram might shut off access to influencers’ metrics and analytics altogether and start to charge for them.

“It is a little bit concerning if only Instagram or Facebook are the gatekeepers to that information, especially given Facebook’s history with data and privacy,” said Stefania Pomponi, founder and president of influencer marketing agency Clever. 

And there are few ways to fight back. “There’s no union for influencers,” said Sarah Peretz, a 23-year-old influencer who posts pictures of herself against vibrant, colourful backdrops. 

Instagram told the Financial Times it had not changed its algorithm to reduce organic reach, and that there was “no truth to the theory that we are doing this [likes hiding test] to encourage ad buys”. It has also said it is exploring ways to allow professional accounts to share their engagement metrics with brands, though has not indicated if it will charge for this service or not. 

Either way, it has started to cash in directly on the relationship between influencers and advertisers — potentially cutting out middlemen such as the brisk market of influencer marketing agencies that has sprung up in recent years.

In June, it launched a new tool, “branded content ads”, which enables brands to promote influencers’ posts as an actual advert. This month, it also announced plans to launch its own platform for matching brands with influencers, starting by testing the tool with 40 US influencers.

As Instagram itself begins to encroach on the space, unnerved advisers are urging influencers to generate followings on multiple platforms in order to secure continued profits, with rapidly growing Chinese-owned TikTok typically cited as the latest craze. 

Scott Guthrie, UK-based influencer marketing consultant, says that big brands and businesses are entering the space “at speed”, but suggests Instagram may be losing some of its edge. “If you build on one platform, you’re only one change of service away from becoming irrelevant,” he said.