From canceled campaigns to late payments, influencers feel the hit as brands rethink spend
As advertisers reconsider their marketing spend in the face of ever-worsening economic conditions, influencers have told The Drum brands are canceling campaigns, reducing fees and brokering gifting-only deals. The Drum commissioned HypeAuditor to survey influencers in the UK and US to find out how the economic downturn had affected their businesses.
The influencer marketing industry has been hit by the economic downturn / Pexels
Just under half of all 141 influencers to respond have experienced payment problems since the economy started to dip in March 2021. Looking deeper, 33 influencers were asked by brands to lower fees, 18 have had payments delayed and 16 had brands cancel campaigns altogether.
For influencers who had rates lowered, 14 reported a staggering 30% or more reduction in fees, while 36 said the drop was between 5-20%.
40% of influencers also reported working with fewer brands this year than in 2021, compared with 36% who worked with a consistent number of brands from last year.
Accounts polled ranged from 1 million plus followers to micro-influencers with under 10,000 followers, and featured influencers who charge between $100-$2000+ for an individual post.
Some respondents told The Drum they were worried brands would opt for gifting and freebie deals only, while others said this was already happening. One influencer reported that a client they earned over £3,000 from in 2021 said it was doing no paid campaigns in 2022.
“I’m not a full-time influencer yet, striving to become one. Part of me is concerned that brand deals will dry up, creating a more challenging road ahead to go full time as a content creator,” said one.
The majority of influencers polled had a second source of income and 27 of the 141 have diversified, or are in the process of diversifying, their income.
One respondent said they saw fewer “opportunities for continued growth as influencers.”
Just last week the quarterly AA/Warc report said ad spend would stifle in 2022 and shrink in 2023, and the IPA Bellwether paper said 13.4% of companies had already cut marketing budgets. Influencers were then asked if they were worried about the economic crisis impacting their career, to which 40% replied yes.
Away from brands, influencers raised concerns that audience engagement will drop as consumers tighten their purses. One foodie influencer commented: “The price of food is skyrocketing and fewer people are eating at high-end restaurants,” while another said they were worried about their “followers having less money to spend on merchandise.”
Despite the concerns raised by influencers over an economic downturn in the market, the majority (76%) of those surveyed haven’t considered giving up the job.
Dentsu influencer marketing effectiveness study
When budgets tighten, marketers face increased scrutiny on a campaign’s effectiveness. For influencer marketing, it has historically been trickier to prove its effectiveness when compared with other media types.
Dentsu has commissioned a study in an attempt to qualify that influencer marketing is now just as effective as TV for driving awareness.
The research, which tracked campaign engagement in 750 UK adults, found that 12% recognized the test advertiser via TV ads and 13% via influencer marketing. ‘The Influencer Multiplier Effect’ study showed influencer marketing also provides the same level of brand recall as TV (43%-44%).
Dentsu concluded that audiences were more drawn to influencer-crafted creative than TV or digital for being ‘unique’ and ‘personalized.’
“Working with talent that audiences have opted in to follow has a brand rub effect in a unique way that other channels can’t compete with. The personalized and relatable brand messaging creates this uniqueness,” said Gary Clarke, business director at Dentsu-owned agency Gleam Solutions.