- Ad spending on influencer marketing has fallen 22% in the first half of 2020, according to a new survey of marketers conducted by the World Federation of Advertisers.
- A drop in sponsored-post opportunities has forced many influencers to lean into alternative revenue streams, like merchandise, direct-to-consumer products, affiliate marketing, and content-production deals.
- While advertising investment has fallen across the board, many brands are still running paid “response campaigns” to address the coronavirus crisis and continue reaching consumers during the pandemic.
- Click here for more BI Prime stories.
Influencer marketing is in the middle of the pack when it comes to the categories being hit hardest by the coronavirus-related advertising downturn.
Many multinational companies are canceling or delaying influencer marketing campaigns during the pandemic to save on costs or avoid striking the wrong tone during a public-health crisis, but they haven’t stopped spending completely, according to a new survey.
Investment in the category has dropped 22% in the first half of 2020, according to a survey conducted by the World Federation of Advertisers between April 22 and April 28. The WFA asked senior marketers at 38 companies (who are members of its organization) about their marketing mix in the first half of this year. The group collectively controls $46 billion in annual ad spend, according to WFA’s report.
While ad investments in influencer marketing dropped far less than spending on events (experiential) and outdoor marketing, which fell 56% and 49%, respectively, for the first and second quarters, the category is underperforming when compared with online display (down 14%) and video ad (down 7%) spend, according to respondents.
Print (down 37%) and television (down 37%) ad spend also saw huge declines in the first half of the year, with the latter seeing a revenue loss after the suspension of sports and other live events during the pandemic.
As investment in the influencer category dips, the prevalence of branded content on social-media platforms has —unsurprisingly — dropped off.
Sponsored posts on Instagram fell from representing 35% of influencer content in mid-February to 4% of creator content in mid-April, according to a report from the marketing-analytics firm Launchmetrics. As demand for sponsored-content creation dips among brands, some marketers are predicting a near-term 15 to 25% dip in the average price of a sponsored post.
Many brands are not canceling influencer campaigns outright but postponing them, either to adjust production plans to work with creators who are stuck at home or to retool messaging to avoid appearing tone-deaf.
But the time frame in which companies are pushing back ad campaigns is increasing. Forty-one percent of respondents to WFA’s April survey said they have deferred ad campaigns (not specific to influencer marketing) by half a year, up from just 13% of respondents in a March survey by the organization.
And some influencer marketing agencies have said that having a campaign “on pause” is often just a polite way of saying that it’s canceled.
“In some cases, it means that it is postponed until the third or fourth quarter, but that can also be a nice way of saying this campaign is not moving forward but there may be another opportunity in the future,” Joe Gagliese, the CEO of the influencer marketing agency Viral Nation, told Business Insider in April.
Digital creators have had to adapt their businesses in recent weeks as opportunities to earn money from sponsored posts — a staple source of revenue in the influencer economy — have thinned.
The industry offers a variety of other revenue streams, like merchandise, direct-to-consumer products, affiliate marketing, and content-production deals, that have helped creators continue to earn a living as advertising opportunities drop off.
And while the number of sponsored opportunities has fallen considerably in recent months, there are still plenty of brands that are activating campaigns to reach consumers — albeit with modified messaging.
Advertisers are focusing on “response campaigns” in which they address, rather than avoid, the crisis in messaging, though some have dodged specifically using the words “coronavirus” and “COVID-19.” Sixty-eight percent of respondents to WFA’s survey said they have a new ad or marketing campaign live “in response to the situation.”
Some companies are focusing on their recent charitable donations or other forms of philanthropy in influencer ads. The backpack brand JanSport launched an influencer marketing campaign on TikTok in March in an effort to generate buzz around its donations to the nonprofit World Central Kitchen.
“We wanted to really connect with students who are being displaced and also try to meet the needs of those students who rely on school for both a safe place to go during the day and also nutrition,” Monica Rigali, the company’s senior director of marketing, told Business Insider. “This is the first sort of quick turnaround communication we’ve done with our consumer in a while.”
Here is the full breakdown of how investments in different channels of advertising have shifted among WFA survey respondents in the first and second quarters of 2020:
- Events/experiential: -56%
- Outdoor: -49%
- Print: -37%
- TV: -37%
- Radio: -25%
- Point of sale: -23%
- Influencer: -22%
- Online display: -14%
- Online video: -7%
For more information on how the influencer-marketing industry has shifted during the coronavirus pandemic, read these Business Insider Prime posts: