Selena Gomez in fall Coach campaign.

Influencer marketing is almost ubiquitous in the fashion and beauty realm, but even the biggest companies are still catching up to what does and doesn’t work for them, and consumers.

With the ever-increasing investment in influencer-led social media campaigns, which mainly happen on Instagram, companies from Adidas to L’Oréal are targeting younger consumers to varying degrees of success, according to new research from L2.

After monitoring more than 5,000 influencer Instagram accounts between April 2016 and June 2017, L2 found brands often aren’t realizing the full potential of their influencer partners and many may be too focused on those with bigger audiences.

“While 70 percent of brands work with influencers, 90 percent of brands fail to feature influencer content on their own account, missing an opportunity to incorporate influencers more actively in their content strategy,” L2 said in the report. “Many brands have also failed to encourage influencers to post branded content on their own channels, which could allow them to capitalize more fully on the highly engaged communities of their partners.”

Companies that L2 found to have higher rates of consumer engagement, likely stemming from influencer deals, are Coach, which has partnered with Selena Gomez (127 million Instagram followers), and jewelry brand Alex and Ani, which uses a mix of user-generated content and posts related to social causes.

Coach’s link with Gomez, which the company paid a reported $10 million for, was apparently a good investment. L2 found that Coach ended up paying less than $7 for each set of 1,000 impressions it gained from the 12 times Gomez mentioned Coach in a post. Each interaction cost and less than 25 cents.

Moreover, each time Gomez posted about Coach, the brand’s own account saw “a significant spike in engagement and followers,” most notably during the Met Gala when Gomez wore all Coach.

Selena Gomez’s appearance in Coach at the Met Gala coincided with a big spike in the Brand’s followers and consumer engagement. 

The cost of a deal does not guarantee its success, however. L2 pointed to BareMinerals’ partnership with beauty influencer Ingrid Nilsen, who was reportedly paid more than $500,000 to promote a makeup launch earlier this year. The research firm said the brand has been “virtually invisible” across Nilsen’s social channels and has only shown up in five Instagram posts.

“When compared to the success of the Coach x Selena Gomez partnership…it’s clear that BareMinerals grossly overpaid for this deal,” L2 said.  

The use of micro-influencers, who have between 5,000 and 25,000 Instagram followers, is a good way for brands with smaller budgets to extend their marketing reach. Even well-known luxury brands like Balmain, Marc Jacobs and Moschino tend to work with fewer and often, smaller, influencers, but their combined follower reach extends beyond larger brands like L’Oréal.     

“While mega-influencers can have follower counts in the millions, brands can still generate quality engagement — along with an increased perception of authenticity — by partnering with smaller influencers, whose image reinforces specific brand values,” L2 said.

Forever 21 is using small and micro-influencers widely and seeing good results. L2 found that nearly 90 percent of the company’s Instagram posts feature influencers that generally have followers in the thousands, not millions, but they each average more than 90,000 interactions.  

Authenticity is becoming more of a focus for brands as awareness grows around influencers being paid to promote companies and products.

The FTC has been trying to crack down on influencers who do not clearly disclose when an Instagram post is actually a paid advertisement, but the idea that the influencer is using the product of their own accord is the main selling point for consumers.

“Because authenticity is so crucial to the way influencer campaigns are received by consumers, anything that detracts from this perception could cripple the effectiveness of the model,” L2 said.

Recent guidelines from the FTC told influencers and brands that a proper disclosure means a social media campaign needs to see every post, even when part of a larger endorsement deal, accompanied by “#ad.”

L2 admitted that “to date, these guidelines have been widely ignored.”

For More, See:

Digital Download: The Power of Influencer Referrals

Photographers Band Together to Send a Message to Brands, Influencers and Bloggers

Plus-size Influencer, Part-time Designer Gabi Gregg Talks About How Industry Is Changing