More marketing dollars and scrutiny focused on social influencers

Twin Cities fashionista Sarah Edwards doesn't truly consider herself an "influencer." She prefers the term "content strategist."

"Part of the magic of what I do is that I connect people literally all day every day," said Edwards, who helps companies with marketing via events and social media.

"Social influencers," as companies and marketing agencies have dubbed them, have grown in prominence in the last few years with the boom of social media platforms like Instagram and Twitter.

While the idea of using someone's popularity to help sell a brand isn't a new one, social influencers and influencer marketing have become more sophisticated through detailed contracts. The federal government has also started to more firmly regulate how influencers can endorse brands.

"It's just kind of fascinating how things are being driven by social media and all of a sudden the kind of people who are influencing purchases are often savvy individuals who could be down the street on their computer," said John Pickerill, an attorney at Fredrikson & Byron in Minneapolis who specializes in advertising and social media issues. "It is really sort of turning advertising on its head."

Many marketers attest that consumers like to buy products recommended or used by others they trust. Influencer marketing generated about $2 billion in revenue last year, and that is expected to grow to $10 billion by 2020, according to trade publication Adweek.

The Points North Group, which provides influencer marketing measurement, recently released data on the biggest influencer marketing spenders on Instagram in March. Topping the list with more than $1.5 million spent was Flat Tummy Co., the weight-loss product company that reality TV star Kim Kardashian promotes. Other large spenders included Amazon, Mercedes-Benz and Twin Cities-based Land O'Lakes.

While Kardashian and other bona fide celebrities have usually already had talent contracts with companies to serve as brand ambassadors, formal contracts are now being signed with less famous micro-influencers, individuals who are often passionate or respected in an area but with smaller, more niche followings.

"As far as these people, the more minor influencers, for a long time they would pay them to say things without an agreement or anything," Pickerill said. "I think in the past two to three years is when agencies and advertisers really started shoring up that side of things and making sure they had agreements in place with just about everybody."

Minneapolis advertising agency Periscope has helped several clients partner with social influencers. Earlier this year, its team sent Trolli sneaker-shaped candy to sneakers fanatics to review. When the Super Bowl was in town this past February, Periscope invited about 20 social influencers like local blogger Tamara Waterston (from Champagne and Macaroons) to the Hallmark pop-up shop it set up at Periscope offices.

"You want to be able to build a relationship with the person and you really, really want to have the process be transparent and authentic," said Bridget Jewell, social creative director for Periscope.

St. Paul attorney Ben Passer is a junk food junkie. He has more than 30,000 followers on Instagram and keeps snack food lovers updated on the newest treats with his Snack Cellar website where he reviews everything from piña colada Oreos to Philadelphia Cream Cheese Key lime cheesecake cups.

Most of what Passer reviews he finds in stores or is sent for free by companies. But last month, Passer did his first sponsored post with the new Bigs Taco Bell Taco Supreme sunflower seeds. Passer, 28, said he would consider other sponsorship opportunities as long as they don't compromise his ability to objectively review snacks.

"I really got into reviewing and posting about snacks and junk food just because it's truly a passion of mine," Passer said. "I really enjoy hunting down the latest products. … I didn't get into it as a side business."

Some consumers understand that influencers post some sponsored content. The best influencers limit the products they support, Jewell said, and make it clear to customers when they do.

The Federal Trade Commission, or FTC, has a set of endorsement guidelines that say if there's a "material connection" between an endorser and an advertiser, such as the gift of a free product, it has to be disclosed.

On Instagram, the FTC says the disclosure, often indicated with "sponsored" hashtag, should be able to be seen on a mobile phone without readers having to click "more" on longer posts.

In April 2017, the FTC announced it had sent out more than 90 letters to remind influencers and marketers that they should clearly disclose their sponsorships when promoting products on social media. It was the first time that FTC staff reached out directly to educate social influencers.

With the increase of influencer marketing has come a concern of companies about false engagement numbers. Many brands are wary of influencers who use follower bots, software that follows and unfollows and likes other accounts automatically on behalf of the user's account.

The Points North Group found that many brands such as Ritz-Carlton and Pampers had paid influencers with a large amount of fake followers.

Nicole Norfleet • 612-673-4495 Twitter: @nicolenorfleet