Do smaller influencers perform better than larger influencers?

Influencer marketing is a ~USD14-17B industry by some reports, with the same reports estimating healthy CAGR of ~26-37% over the next several years.

And (thanks to the biggest 'influencer' in my life Roger Federer) if you saw the amount of Nike clothes and shoes, and more recently On shoes and Uniqlo clothes that I have, I definitely believe in its power and potential!

Do smaller influencers perform better than larger influencers?

I came across the article 'Why Smaller Influencers Offer Better Marketing ROI', describing how smaller influencers offer better marketing ROI than larger influencers, based on research conducted the Journal of Marketing*, which piqued my curiosity.

The study focuses on discount codes and UTM tracking issued to influencers of DTC firms to directly attribute 1,881,533 sold products, amounting to over 17M Euros in revenue, across 2,808 unique 'sponsored posts' by 1,698 influencers - a very sizeable dataset.

The overall 'so what'?

1. Nano-influencers provided far better 'ROI' than macro-influencers; ROI defined as a. Revenue per follower; b. Revenue per reach; and c. Return on influencer spend

2. And hence, 'when deliberating where to invest the first euro, it should be in the most profitable influencer type, which is nano-influencers. But this applies not just to the first euro; also the second and all further euros should be invested in nano-influencers until the budget is exhausted'

However, should this really be the case(?):

3. Based on the spend (cost, or the 'I' in ROI) and how low the reach data is, it's apparent that the study is based solely on relying on influencers' posting organic content

4. With this comes a range of limitations in the 'so what':

a. How can you understand on-target reach and audience overlap of an influencer marketing strategy built on only nano-influencers?

b. Given this, how can you control for unique reach and frequency to your target audience across all of you nano-influencers to really optimize effectiveness?

5. Regardless, 'ROI' may be better among nano-influencers, but total revenue is smaller - thus is a focus on solely nano-influencers going to meaningfully drive business contribution at the volumes and revenue levels needed; or does it actually require a mix/'pyramid' of nano-, micro- and macro-influencers to balances a blended-yet-still-economical 'ROI' with large absolute volumes of revenue

6. Unique codes and UTM tracking is a great starting point, however also infers a somewhat 'last click attribution' approach to the study. How about all of the views/non-clicks/non-engagements with influencer content that also drove a conversion outcome (indeed by the study's own admissions, 'engagement has been criticized as an inadequate predictor of sales conversion, echoing common industry concerns about engagement metrics')

7. A recommendation to 'invest the first, second and all further euros should be invested in nano-influencers' assumes one can expect a linear/consistent ROI no matter how many nano-influencers one engages - which given the limitations in 4. above feels a very wild assumption

8. Finally (for now), what exactly does Revenue per follower as a measure of 'ROI' actually tell you(?!) I go back to a (real) client's example where they sought to work with Mum influencers in the hopes of raising awareness and education around its product aimed at Mums. The selected Mum influencers' follower base? Consisted of...... Men.

I applaud the level of rigor in the study; yet (in my humble opinion based on experience working with a range of clients), there still seems to be some gaps to best practice influencer marketing strategy and execution: a. Robust influencer selection and mix; b. To deliver compelling, attention-grabbing content; c. Distributed with fundamental media planning principles to the target audience at sufficient reach and frequency; with d. Effectiveness measured relative to real and incremental business outcomes.

*Link to full study here: https://journals.sagepub.com/doi/10.1177/00222429231217471