New Age Marketing: How Influencer Endorsements Are Changing the Game for Consumer Brands, Especially Amid Economic Uncertainties
- by Chloe Meley, Maggie Shiltagh and Rachel Phua / Bloomberg
Marketing via social influencers gathers momentum as marketing budgets face constraints
To start off his day, Ashton Hall dips his head in Saratoga Springs Water. A quick video of this routine catapulted the fitness influencer to fame and earned him a coveted endorsement from the brand.
"We can't thank Ashton Hall enough!" exclaimed Robbert Rietbroek, CEO of Primo Brands Corp, after Hall's video went viral, showcasing the power of influencers in boosting a brand's reach and recognition.
This is just one of many instances where a quick post by an influencer changed the game for consumer goods companies like Primo Brands, who weren't even affiliated with the influencer at the time.
Companies are increasingly seeing the value of influencer endorsements, especially in the face of economic instability as it allows them to market their products affordably and effectively.
"With shifting advertising budgets, we are witnessing a boom in the creator economy," said Kenny Gold, head of social, content, and influencer at Deloitte Digital, driving the global influencer marketing industry to grow by 36% this year, reaching $33 billion[1].
Even high-end corporations like Unilever are hopping on the trend, with the CEO, Fernando Fernandez, planning to hire 20 times more influencers and dedicate as much as 50% of their ad budget to social media[3].
The fashion, beauty, and accessories sectors have long been tapping into the power of influencers, but now, consumer goods companies, too, are catching on. In fact, the budget allocated for influencer partnerships increased by 49% last year, with content creators taking up a quarter of the average marketing budget[2].
Studies suggest that this trend will continue to flourish and by 2033, the market for influencer marketing and dedicated platforms could reach as high as $70.86 billion[5].
Influencing the Influencers
Corporations favor smaller, independent, topic-specific influencer agencies to connect them with creators who hold a strong following and a well-defined audience.
For example, BR Media Group, which works with 80% of Latin America's biggest influencers, was recently acquired by Publicis Groupe—a significant move that signals the growing popularity of influencer marketing[3].
Despite the rapid growth, there's a key risk associated with the technique: missteps can spread quickly due to the public nature of social media platforms.
German sportswear maker Adidas was forced to cut ties with Kanye West after a series of controversial statements. This underscores the importance of careful vetting when choosing influencers[1].
Are AI Influencers the Future?
Artificial intelligence-generated influencers, such as AI-generated bots with large followings, could potentially be the answer to the risk associated with human influencers.
Meta Platforms Inc, for example, is planning to automate ad creation using AI, which could include imagery, video, text, and audience targeting[1].
"Whether real or AI, the question remains: how much value will there be in authenticity versus efficiency in engaging audiences?" mused Ruben Schreurs, CEO of Ebiquity PLC[1].
Regardless of the future direction, there's no question that influencer marketing has become a primary strategy for consumer brands and will likely continue to play an essential role in marketing strategies for years to come.
Enrichment Data:
Overall:
Influencer marketing has surged in popularity in recent years, driven by the rising influence and trust placed in content creators, especially among Gen-Z populations.
Growth of Influencer Marketing
- Rapid Expansion: The influencer marketing industry has grown from a $1.7 billion market in 2015 to a projected $33 billion by 2022, a 1335% increase over seven years[4].
- Increasing Budget Allocations: In 2020, 49% of marketers increased their influencer marketing budget compared to 2019, with content creators taking up a quarter of the average annual budget[2].
- Regional Growth: The Asia-Pacific region is expected to be the fastest-growing influencer marketing sector, driven by increased brand focus on building connections with consumers[1].
Impact on Consumer Goods Companies
- Brand Authenticity: Consumers are increasingly cautious of traditional branding, leading companies to seek more authentic ways to resonate with their audience—a goal that can be achieved through influencer marketing[4].
- Enhanced Consumer Connection: Influencers offer brands a more direct and personal connection with their target audience, fostering trust and fostering emotional connections[4].
- Increased Efficiency: Influencer marketing is often more affordable and flexible than traditional advertising channels and can provide higher returns on advertising spend[4].
Key Trends and Regional Insights
- Independent Agencies: Smaller, independent, topic-specific influencer agencies are often preferred by brands because they can connect them with creators who have a strong reach and well-defined audience.
- Regional Differences: The Asia-Pacific region, followed by Europe, North America, and the Middle East and Africa are the most active regions in the influencer marketing industry[1].
- Sector Growth: The fashion, beauty, and accessories sector leads the way in adopting influencer marketing, but the trend is rapidly spreading across all consumer goods sectors.
Summary Table
| Year | Market Size (USD Billion) | Key Trends/Drivers | Impact on Consumer Goods ||----------|--------------------------|--------------------------------------------|----------------------------------------|| 2015 | 1.7 | Early adoption, niche trend | Limited, sector-specific || 2022 | 33 | Rapid growth, tech adoption, platform surge | Mainstream, budget reallocation || 2025 | 55 | Increased influencer marketing investments | Stronger brand positioning, authenticity focus|| 2033 | 70.86 | AI, automation, global social expansion | Core marketing strategy |
[1] Influencer Marketing Figures, Trends, and Statistics, Influencer Marketing Hub, https://influencermarketinghub.com/statistics/global-influencer-marketing-stats/[2] State of Influencer Marketing 2020, Linqia, https://www.linqia.com/resources/reports/2020-brand-report-coronavirus-impact-influencer-marketing-budgets/[3] Unleashing the Power of Influencer Marketing, Deloitte, https://www2.deloitte.com/content/dam/deloitte/us/Documents/about-deloitte/us-podcast-series/edition-14/Unleashing-the-Power-of-Influencer-Marketing.pdf[4] Is Influencer Marketing Still a Thing or Should Brands Sell Directly to Consumers? Forbes, https://www.forbes.com/sites/tommygeorge/2020/06/25/is-influencer-marketing-still-a-thing-or-should-brands-sell-directly-to-consumers/?sh=6b9829bb21c2[5] Top 10 Influencer Marketing Insights for 2020, Influencer Marketing Factory, https://www.influencermarketingfactory.com/articles/top-10-influencer-marketing-insights-for-2020/
- The emerging trend of influencer marketing in consumer brands extends beyond traditional sectors like fashion and beauty, as seen in the collaboration between Primo Brands and fitness influencer Ashton Hall.
- Advanced technological algorithms and AI-generated influencers may provide a viable solution for companies seeking to avoid the potential risks associated with human influencers, thereby further boosting the growth of the influencer marketing industry.
