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Why is the performance of influencer content on Instagram declining?

It’s the open secret of influencer marketing: the last two years have seen noticeable declines in the performance — reach and engagement metrics, especially — of influencer generated content on Instagram. 

What’s behind it? Does Instagram penalize content labeled as sponsored? Is the algorithm so unwieldy that even the developers don’t know how it works and so creators suffer the consequences? 

Or is the answer deeper than that? One that lies not only in how Instagram has evolved as a platform, but how the broader social media landscape and user behavior within it has changed? 

Key Takeaways

  • Instagram: Reels driving increase in time spent on the app
  • More platforms, more content and more KOLs make for a tougher operating environment
  • Understanding Instagram. Hint: there’s more than one algorithm
  • Disenfranchised social media users are harder to reach and engage

How have content formats, volume and reach evolved on Instagram? 

Instagram is not the same platform it was before the pandemic; Meta has been pushing the development of Reels over photo posts on Instagram for the better part of three years. 

And despite well-publicized pushback from creators over Instagram’s pivot from static content to video, Reels have driven a 40% increase in time spent on Instagram since launch, according to Meta. It also says new AI-driven recommendation systems have driven a 6% increase in time spent on Instagram. 

Social media users love video, as evidenced by the longevity of YouTube and the meteoric rise of TikTok. On Instagram, while all types of content are growing on the platform, the volume of Reels in 2023 rose a whopping 282% compared to 2022, according to social media management tool Metricool.

Compared to other types of content — posts, stories, etc. — Reels generate the highest amount of interactions and reach. However, reach on Reels declined an average 76% in 2023, compared to 2022. 

Reach on stories from accounts with 50K+ followers has declined 24%, while accounts with 500 – 2K followers saw a healthy 16% increase in reach on Stories.

“We're seeing [declines in performance]. Why is this? Simply because the algorithms are constantly evolving and there are more and more creators on the platforms,” comments social media talent agency BTS Agency founder and CEO Mathieu Bonafé. 

In France, for example, the number of KOLs with 5,000+ followers on Instagram rose 9% in 2023 from to 2022, to reach 62,516, according to Kolsquare data. Similar growth rates were seen in Spain and Germany (+10% and +9.7% respectively), while the number of KOLs in the US and the UK rose 5.7% and 5.5% respectively.  

“It's like the engagement rate: the stronger the community, the lower the rate. The same goes for performance: the more creators there are, the harder it is to stand out. And this is very much the case today when you see that the majority of creators are making the same content,” comments Bonafé.

Growth of social media landscape and influencer marketing delivers tough competitive environment

Whether it’s the number of KOLs entering the market, the volume of content being posted, or the budget brands are willing to spend, the global influencer marketing industry is growing at a rapid clip. 

This growth also extends to the weight of newer platforms like TikTok or Twitch, which have upended the market status quo and diverted users’ attention. Globally, people aged 16 to 34 have accounts on at least seven social networks and spend an average 2.5hrs a day on social media. 

“I don’t think there’s particularly a decline in performance on Instagram, I just don’t think it’s keeping up with TikTok,” comments US TikTok influencer agency Clicks Talent CEO and Founder of Abraham ‘AB’ Lieberman. 
“It’s about what you compare it too. A few years ago we were comparing Instagram to Facebook or Snapchat, and compared to that it was on the rise. Today, TikTok is extremely bigger and more successful in terms of numbers, metrics, reward, and potential, so it makes Instagram look a lot less so.” 

More KOLs posting more content has had a significant impact on performance metrics. The higher volume of content means competition to get pushed into users' feeds by the platform’s ranking systems is much tougher than in the past. 

Meanwhile, users are becoming disenfranchised by the avalanche of content publicizing products and services.  

A recent study by Gartner, for example, found 50% of users would either abandon or significantly limit their interactions with social media by 2025, and 53% of them believed the current state of social media had decayed compared to the prior year, or five years ago. 

How much of lower performance rates are Instagram’s fault? 

A common refrain from creators on both sides of the Atlantic over the past two years has been that “the Instagram algorithm” is responsible for declining reach and mediocre engagement rates.

Many also complain that posts clearly labeled as brand collaborations are penalized by Instagram, or that boosting content with paid ads leads to declines in organic reach down the pipe. 

(Many European countries such as France, Belgium and the UK, have tightened transparency rules for post labeling in recent months, as has the US.) 

“It's too early to say whether the [new French] law [and its transparency obligations] has led to a drop in performance. The platforms claim that this is not the case. In any case, engagement has been declining for several years due to various factors,” comments Agence Wellcom Consulting Director in charge of Influence Strategies Charlotte Caron.

Instagram has been at pains to deny accusations that labeled posts are automatically penalized by “the algorithm”. To counter the avalanche of complaints, the company revealed more details about how its recommendation systems works. 

The hope is that better understanding of how Instagram decides which content users should see, coupled with new tools designed to support creators will lead to better content and grow incremental performance.  

So what do creators and brands need to know? It might come as a surprise, but Instagram uses a variety of algorithms, processes and classifiers to rank content and determine which feeds to drive it to. Content in Feed, Stories, Reels, Explore are therefore ranked differently according to how people use those parts of the platform. 

Stories, for example, are for connecting with followers on a more intimate level, while Reels should entertain and, hopefully, help grow the audience. 

Like the importance of understanding the inherent differences between platforms — Instagram, TikTok, Snapchat, YouTube — it is also important to understand the pros and cons of various content formats relative to Instagram’s user base, and the specific audience being targeted. 

The evolution of engagement: what is ‘dark social’? 

Parallel to its changing content formats and algorithms, Instagram has introduced a host of new tools designed to help creators engage more fluidly with their communities. 

Chief amongst them are paid subscriptions and broadcast channels, which allow creators to offer exclusive content, open group chats, and engage with their most loyal followers in real time. 

Increasingly, conversations and engagement between KOLs and their communities are moving to these so-called ‘dark social’ channels, which also include channels like DMs, Whatsapp, or Messenger.   

“What happens on ‘dark social’ is very important,” comments founder of digital marketing agency MUMS2GATHER and online community Christel Niquille
“People take the time to answer their community’s questions and to offer advice. These conversations might not be visible on posts because they take place in DM, but they take a huge amount of time.”

The problem for marketers is that engagement that takes place in ‘dark social’ is difficult to track. 

“Brands do not give enough consideration to the conversations and the image that the collaboration (brand/influencer) will enable,” comments BTS Agence’s Mathieu Bonafé. “We prioritize the creation of conversations with the influencer. The brand should be a conversation starter but not the heart of it.”   

Instagram remains a powerful platform for influencer marketing. But as new trends and technological advancements disrupt the social media landscape, tried and trusted strategies and metrics are being challenged. 

To drive impactful campaigns, brands, agencies and creators need to move with the times and develop new strategies accordingly. 

Anything less will just not cut it.  

About Kolsquare

Kolsquare is Europe’s leading Influencer Marketing platform, a data-driven solution that allows brands to scale their KOL Marketing strategies and implement authentic partnerships with KOLs (Key Opinion Leaders). Kolsquare’s technology enables marketing professionals to easily identify the best Content Creators profiles by filtering their content and audience, and to build and manage their campaigns from A to Z, including measuring results and benchmarking performance against competitors. Kolsquare has built the largest community of influencer marketing experts in the world, and offers hundreds of customers (Coca-Cola, Netflix, Sony Music, Publicis, Sézane, Sephora, El Corte Inglés, Lacoste, …) the latest Big Data, AI and Machine Learning technologies to drive inspiring partnerships, tapping into an exhaustive network covering 100% of  KOLs with more than 5,000 followers in 180 countries on Instagram, TikTok, Twitter, Facebook and YouTube. As a Benefit Company, Kolsquare has been pioneering Responsible Influence by championing transparency, ethical practices, and meaningful collaborations to inspire change.

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