Social media celebrities are cashing in making ads: See how much

Last November, actress Olivia Munn posted a video to her Instagram in preparation for the holidays: She wore green and red pajamas, she cooked a holiday turkey and she lounged on the couch with her two sweater-clad dogs.

She also watched her favorite Christmas movie — thanks to her cable setup from Xfinity. “Happy Holidays! From Olivia Munn + Xfinity,” the video’s tagline read.

Munn may actually love Xfinity, but in this case she was hawking the product for Comcast* to her 1.8 million followers. The video, which was clearly marked with the hashtag #ad, has more than 330,000 views. (A longer version of the video did more than a million views on YouTube.)

Social media posts like this from celebrities like Munn are big business. Social influencer marketing is more than a billion dollar industry, according to estimates from research firm eMarketer. Advertisers spent $570 million on Instagram influencers alone in 2016, eMarketer estimates, and half of them said they planned to increase their influencer budgets in 2017.

The question for advertisers, though, is how to distribute those budgets, and to which influencers.

One marketing agency, HelloSociety, said earlier this year that “micro influencers” — accounts with less than 30,000 followers, but a loyal following — were the way to go. Others have also jumped on the micro-influencer bandwagon.

But new data from another marketing firm, Whosay — which creates influencer ad campaigns for companies like McDonald’s, Hulu and Lexus — provides a different perspective. Micro-influencers weren’t the best bargain, according to Whosay, which looked at data from more than 130 influencer campaigns over the past 19 months.

Whosay looked at influencers in five tiers based on an influencer’s total followers. Tier 1 celebrity endorsers like Munn, DJ Khaled or Jada Pinkett Smith weren’t always the best bargain, despite boasting an average of 7.4…

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