The practice of famous people endorsing consumer goods goes all the way back to the 1970s when innovators like Josiah Wedgwood used royal endorsements to promote his products in England (more about that later). Since then, businesses in various industries have known the value of celebrity endorsement as a promotional tool. It has a favorable influence on:
- Branding,
- Customer purchasing behavior,
- And the company’s profitability.
Due to this, businesses have been paying lakhs and crores annually to have famous people advertise what they sell to the public.
Typically, actors, models, and sports stars are the kind of celebrities that promote products. However, the growing influence of social media has made it possible for previous commoners to gain the fame and authority of celebrities. And every 21st gen individual is aware of what these new types of celebrities are known as– the influencer!
Statistics from Oberlo show massive growth of the influencer marketing market size from $1.7 billion in 2016 to 16.4 billion at the end of 2022. Marketing Strategy & Trends Report from HubSpot further bolsters the growth as it suggests at least one in every four marketers seek influencers for marketing as the impact of social media influencers offer the second-highest return on investment (ROI).
The rise of influencers is no surprise, and it was bound to happen with increased usage of social media. Statista predicted that by 2023 end, 4.89 billion people will use social media throughout the globe. This is a spike of 6.5% since the previous year. Moreover, this is a remarkable 2.2 billion increase since 2017, a growth of 79.1% in only five years. Therefore, with the steadily growing usage of social media, it’s clear that anyone can become famous overnight through a single viral post.
In this article, we will dig deeper into how influencer marketing has come to democratize celebrity endorsements. Let’s start from the beginning, the history and growth of celebrity endorsement, to understand the roots of influencer marketing.
Early Celebrity Endorsements
British businessman Josiah Wedgwood employed celebrity endorsement to differentiate his ceramics from rivals’ more than two centuries before the phrase entered the corporate vernacular. How? In 1765, after making a set of saucers and tea cups for Queen Charlotte, the wife of King George III, Wedgwood was named her majesty’s Potter. His China became so desirable as the symbol of elegance that it was soon dubbed “Queensware.” By placing ads for aristocratic purchases in British newspapers and designating the names of items after particular individuals of the aristocracy, Wedgwood quickly learned to harness the influence of celebrity endorsement.
Now fast forward to the 1900s, the Lux Soap, which debuted in 1923 in the US and India in 1927, was heavily advertised as the “beauty soap of the stars” with several high-profile celebrities, such as Hema Malini, Parveen Babi, and Aishwarya Rai. In those days, starstruck people purchased these items and felt more important because of the celebrity endorsement as celebrities enjoyed a place on a high pedestal. This way, celebrities became a commercial boon and over time, certain stars became associated with certain products, such as:
- Sachin Tendulkar and Amitabh Bachchan for Pepsi in the “yeh dil maange more” campaign.
- Vinod Khanna and Cinthol in 1989.
- Sharmila Tagore and Murphy Radio all the way back in 1966.
Rise of Influencers
Celebrity endorsement before the advent of social media set the stage for influencer marketing. But when exactly did they come into the picture? The contemporary influencer class didn’t materialize out of thin air. While there were sites like YouTube that may have spawned famous people, they failed to successfully capitalize on their popularity. The reign of influencers started with an antiquated social networking platform, Vine, that empowered its users with short-format videos. How? Keep reading:
- Creating longer clips on YouTube meant more effort with less material. Vine allowed users to produce more material while spending less time on each video.
- Shorter films became quickly popular, and increased popularity meant increased.
- As the popularity of the video app grew, so did the need for content providers, and there was no shortage of viral sensations on the platform.
- This resulted in the viral circulation of videos from people with just simple hobbies of capturing moments and uploading them on social media, amassing hundreds of thousands of views and tens of thousands of followers.
Despite this, Vine could not provide a platform for influencers to monetize their popularity. Meanwhile, competing platforms expanded and pivoted toward a creator/influencer economy. These stars born from viral videos quickly took the opportunity to take advantage of these platforms, such as Instagram, Facebook, and even YouTube.
With more people using the internet and social media, businesses began selling their products and services online, and the digital marketing industry shifted its focus to become more consumer-centric. There was a dramatic increase in the interaction between brands and their customers. Buying transformed from a passive process into an interactive one, and users shifted from ignoring digital marketing to seeking out third-party endorsements of products. And catering to that, Influencers turned marketing efforts into valuable content on social media, and conventional forms of advertising were quickly displaced by digital ones.
Vine died just three years later due to its unwillingness to put monetization options test. But it gave rise to a mainstream digital marketing practice that would lead to the democratization of celebrity endorsement and go strong till today, ten years after its launch. Evidently, there’s going to be no slowing down to influencer marketing, and we’ve got some solid statistics to back up our claim:
- At least two-thirds of millennials and members of the Gen Z group claim they follow influencers, with teens being more inclined to do so.
- Among the younger generation, the most popular YouTubers are on par with A-list celebrities. For example, PewDiePie, a gaming YouTuber, is as well-known among male Millennials as LeBron James. And PewDiePie has a larger fan base.
- Influencers’ product suggestions are trusted by half of millennials. When it comes to celebrity endorsements, that number reduces to 38%.
- The majority of marketers (92%) consider influencer marketing to be an efficient kind of marketing.
- In 2023, 89% of businesses using influencer marketing plans to either grow their spending or keep it the same.
Mindblown, right? We were too! Influencers have shaped a new stratum of stardom and influenced fields as diverse as athletics, fashion, and even filmmaking by connecting businesses with a staggering amount of customers.
Democratization of Brand Endorsements
Many of the most memorable advertising campaigns of the 1990s and 2000s included celebrities like:
- Amitabh Bachchan (for Cadbury),
- Kareena Kapoor Khan (for Head & Shoulders),
- and Shahrukh Khan (for DishTV).
However, nowadays, influencer marketing is considered more effective than celebrity endorsements.
The promotion and branding of businesses have changed dramatically during these past ten years since the rise of influencers. Television advertisements, billboards, and print magazines used to be the only ways for marketers to contact consumers, but those days are long gone. The statistics we mentioned above show that influencers have successfully disrupted the traditional model of celebrity endorsements.
Today, a recommendation for a less well-known brand of organic handmade dog food from a friend’s cousin’s sister who has experimented with it and recommended it is more persuasive than an endorsement from Drool’s dog food by the Bollywood actor Hrithik Roshan. Why? Because the latter is more approachable and relatable to an everyday dog owner.
So these influencers, who post on Instagram or vlog on YouTube, are turning into modern-age celebrities as the number of their followers and opportunities for endorsements increase. Why does that happen, you ask? Here are our reasons:
- Influencers seem more real and personable than superstars, who tend to be aloof characters. The regularity of influencers’ posts and the glimpses they offer into their life are major factors in their success.
- The rapport they’ve established with their fans creates more trust than those of more conventional advertisers. For the same reason, they have a significant effect on the purchase choices of their admirers.
- They have a wide array of opportunities as it has allowed businesses to advertise what they sell more naturally and genuinely. So companies would rather work with influencers whose values are compatible with their own than pay multifold to a celebrity.
- Given the importance of social media in advertising and digital marketing, influencers are a more practical choice to collaborate with and use the platform than even the most influential celebrities, who tend to be less familiar with the nuances of networks like Instagram and TikTok.
Since social media is open and free to use for everyone around the world, everyone has the opportunity to jump on the bandwagon of rising to fame through influencer marketing. Regular folks with iPhones can suddenly find themselves in Vogue magazines, posing for branding ads and gracing the pages of glossy publications.
Risks Influencers Face in The Realm of Celebrity Endorsement
By now, you know that influencers have transformed the world of celebrity endorsement and have made a space for everyone to grow their popularity on social media and monetize content. They offer small businesses solutions that are both more cost-effective and more engaging than traditional forms of marketing. And yet, despite their growing opportunities, they face enormous challenges and risks in the profession. Here’s a list of some common liability risks that influencers face:
- Copyright infringement: Since influencers make money from their content, what they produce is considered their intellectual property. They often face the risk of someone stealing their content or idea.
- Defamation: Influencers are under the watch of their audience and the people who follow them. When they say or post something about someone else, they risk getting sued for spreading misinformation or lies. On the other hand, someone else (like brands they’ve worked with or other influencers) may make comments about the given influencer, affecting their reputation and career.
- Property Damage: Influencers often need to invest in professional equipment and buy property and assets from the money they earn as an influencer. Property damage could refer to the damage that may be caused to this.
- Unfulfilled Contracts: There could be many reasons why an influencer may not fulfil a contract, from being harassed to simply being on a hard-to-manage timeline or getting ill. However, these unfulfilled contracts could put them at risk of being sued by the business hiring them to endorse.
- Cyberbullying: Cyberbullying, which flourishes on social media, can have psychological consequences for an influencer. Derogatory remarks and threats to the influencer’s safety are examples of cyberbullying.
- Privacy invasion: Since influencers are constantly in the public eye, they can face the dangers of privacy invasion, such as stalking, harassment, identity theft, etc.
The legal climate around the digital world is evolving, and thus social media influencers may face new challenges beyond the most typical ones listed above. Influencers on social media may protect themselves from the damages that might result from the risks we just discussed by purchasing creator insurance. Insurance for digital creators can give them the confidence to keep producing high-quality content and expanding their social media following without worrying about the future of their digital assets and income sources.
Conclusion
Brands will continue to leverage celebrity fan base to promote their products & services. Historically, celebrity endorsement was a direct result of the country’s insatiable appetite for Bollywood movies and cricket as a national pastime. Influencers, however, are rapidly democratizing the celebrity endorsement landscape because of the growing popularity of social media. But with the growing popularity comes greater dangers that could put budding influencers at legal risk that could destroy their careers.
If you’re a budding influencer, you may protect yourself against financial loss and enjoy more peace of mind by subscribing to Creator Insurance via Welance. Legal representation fees, charges of copyright infringement, and cyber liability are just some of the things that we cover. Our Creator Protect policy gives you access to a group of legal specialists and counselors to help deal with legal challenges and stay in line with legislation. Our Social media insurance may help shield you from the financial and legal repercussions of cyberattacks and legal disputes and allow you to grow into a celebrity without any fears.