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Influencer marketing in 2023: What do the experts predict?

This is curated content from the best of the best blogs around IMHO, indispersed with a few of my own.

Summary. An Influencer marketing strategy can offer a number of benefits to businesses looking to reach new customers and build brand awareness, especially when done in a targeted and strategic way. This article from the econsultancy.com website, takes a look at what the experts predict for influencer strategies in 2023. Continue reading to learn more.

The link to the source of this article can be found at the bottom of the page.

 

 

Influencer marketing is now an integral part of the digital marketing mix, enabling brands to engage audiences and to promote authenticity and trust. According to The State of Influencer Marketing 2022: Benchmark Report, the industry was set to grow to approximately $16.4 billion this year; this growth has been buoyed by the continued success of TikTok, new social commerce capabilities, and increasingly data-driven campaigns.

So, what will 2023 bring? We asked several experts to delve into what the year ahead might look like for influencer marketing. Talking points include the cost-of-living crisis, potential regulation, live shopping, and more…

Influencer spend will remain high despite cost-of-living crisis…

Pierre-Loïc Assayag, CEO and co-founder, Traackr:

“While overall marketing budgets may decrease in 2023 with a looming recession, brands will actually increase spending in influencer marketing. What we already experienced during the pandemic – when resources were scarce but the ROI on influencer marketing was stronger than traditional digital media – will be further cemented by a recession. Brands have the proof points they need to move budget to influencer marketing as a more effective and accessible means of communication with consumers.”

Benji Lamb, Director of China and South Asia, Vitabiotics:

Influencers will be seeking out good deals and offers for their followers, to add value and also to keep their circle of products fresh and relevant. For example, if people are eating out less and spending more time at home to save on costs.

“Many consumers will become more price savvy and inevitably shop around, particularly for mass market goods. But also, quality is still important, so mid-tier brands are well placed meet these needs ‘IMO.”

Alexander Frolov, CEO and co-founder, HypeAuditor:

“The cost-of-living crisis remains front of mind for both marketers and consumers. Shoppers have become even more selective about the brands they purchase from and are on the lookout for deals and discounts more than ever before. In these difficult times, some consumers may also turn away from more expensive brands in favour of more affordable ones.

“Marketers are also reviewing their budgets as they face the global economic slowdown, however influencer marketing remains a priority for many, given it is a low-cost form of branded content.

“Influencer marketing can also be a highly effective way to attract and connect with an audience authentically, particularly in the current economic environment. For instance, at HypeAuditor, we have seen an increase in the number of brand-influencer partnerships around discount programmes, with more content creators sharing discount codes with their followers. In fact, #discountcode was used 317 times by UK influencers in November 2021, while last month, it was used 405 times – an increase of 27% year-on-year.

“Marketers will also increasingly favour partnerships with niche and micro-influencers to ensure they remain relevant and authentic to their audiences. Unlike mega influencers or celebrities, these types of content creators are closer to economic reality and understand the complexities of the crisis their audience may be facing.”

…Yet sensitivity remains crucial

Sarah Penny, Content and Research Director, The Influencer Group:

“Brands are really going to need to evaluate tone of voice in order to sit right in what is a very difficult time for consumers. As the majority of the country experience financial difficulty, the key for brands is not appearing insensitive to the situation around us. During Covid, we spoke with a lot of brands who were really questioning whether they should be overtly selling their marketing messaging during such uncertainty, and this will again be something brands are questioning in order to decide whether they should be focusing on sales messaging, or ‘softer’ campaigns around awareness and even purpose.

“The ease for brands to fit into a problematic narrative as we are seeing with the current social climate, will vary. For example, FMCG brands or food retailers can build a narrative around cost saving and living on a budget as we’ve seen supermarkets create content on how to do the weekly shop for under £50. When there is less disposable income, luxury and non-essential brands will have a greater challenge to communicate relevancy, and so need to be mindful of this and contextualise. For example, recognising that these are luxuries and justifying spend, such as the high quality of the product may drive a good cost-per-wear.”

Potential regulation could be welcomed as demand for authenticity heightens

Alexander Frolov, HypeAuditor:

“2022 has been an interesting year in terms of expectations and regulations towards the influencer marketing industry – a sign the sector is maturing. When it comes to image editing, influencers and marketers are aware that relatability and authenticity can’t be compromised. According to recent data from a survey run by HypeAuditor earlier this year, almost 60% of influencers supported government legislation in this area, and only 17% opposed any intervention. Two-thirds (66%) also believe legislation to be the best way to better protect the mental health of young people online.

“From the marketers’ point of view, 73% of marketers agreed with the government’s attempt to regulate the industry. Interestingly, over half said it was up to the government to regulate, as opposed to the 33% who think it is the responsibility of social platforms.

“This shows that the industry in general welcomes regulations such as the Digitally Altered Body Image Bill, introduced this year in the UK, which calls for influencers to disclose edited images. Another area that should now become a priority is the crackdown on hidden advertising. When HypeAuditor asked for opinions on the UK’s Advertising Standards Authority’s “name and shame” strategy, the data revealed that less than half (41%) of influencers agreed with the initiative, while only 39% of marketers said it impacted the way they worked with influencers.

“Transparency in this area is key and is conducive towards maintaining a sense of authenticity and relatability between content creators and their audiences. Both influencers and marketers need to pay closer attention to this issue, and we can expect regulators to continue to crackdown on any influencers not properly disclosing sponsored posts or gifts they receive from brands.

“Another area that is particularly important given the current cost of living crisis is the need for more regulation around the advertisement of financial services on social media. This has been a recurring topic over the past year, with many influencers being fined for advertising unregulated crypto-currency schemes: Kim Kardashian and Kevin David being two of them. This comes at a time when over 7,200 reports of scams linked to cryptocurrencies were made to the FCA, the UK’s finance watchdog, in the year leading up to June 30, 2022.”

Sarah Penny, The Influencer Group:

“Legislation has been attempted since 2020 with the Digitally Altered Image Bill. If that doesn’t get passed, then we may also see stricter guidance of this from updates to the CAP Guidelines and ASA discipline. However, this type of activity is challenging to police as it is really difficult to identify if a photo has been altered, especially as there is such a broad spectrum of alteration. There is also such a high volume of content, it is difficult to make guilty parties accountable.

“As we saw with CAP and disclosure guidance, it is only very few influencers who have faced repercussions and from a specific space – mainly reality stars. Really, the industry needs to be on board and brands need to tie this condition into briefing and contracts, stating that they will not work with those who digitally alter images, as Ogilvy have. If there was more education around this for all parties and influencers could face losing work and reputation by breaching contract, it would inevitably impact the volume at which this happens.”

Organic content could start to erode as retail media enters the mix

Nilam Atodaria, Global Product Director, INCA (part of GroupM):

“As advertisers adopt a content-first approach, creator audience sizes will become less significant. We will see brands working with influencers based on their ability to tell powerful stories, in a genuine way, rather than on their fame. As such, increased focus will be put upon the compliance and brand safety of the content being created. At the same time, with the arrival of content graphs, more sophisticated formats and more performant influencer content, organic reach will become less of a priority for brands and organic content will start to erode.

“Overall, creator commerce will continue to become more central in media plans, even those of big household names. They will invest more thanks to improvements in user experience and new specialism developing in-house and in agencies. The battle for online spend will intensify between native social platform stores, such as Instagram and Tiktok, and the more traditional retail media stores such as Amazon.”

Social commerce to grow, despite continued challenges with live shopping

Sarah Penny, The Influencer Group:

“There are definitely challenges to resolve in order to get social commerce working effectively; a key area being with live shopping. We saw several of the platforms retract their live shopping plans, such as TikTok pausing expansion in the US and Europe, which seemed to come from the industry moving too fast.

“I think a lot of the platforms and brands were looking at the success and monetary opportunity in countries such as China, forgetting that livestreaming of this type has been around for several years and that customers are comfortable with this social shopping format. There wasn’t the uptake or natural interest that is needed for it to be successful, with heavy discounts and influencer commissions and so brands have taken a step back. To make it a success will take time as consumers adopt and trust this method.

“However, overall social commerce will have a significant impact on influencer strategies. As the platforms develop the infrastructure to support social commerce, influencers are the interface that can connect content and entertainment to commerce and brands are recognising this. Therefore, whilst influencer marketing was historically considered top-of-funnel activity, brands now recognise the opportunity for conversion and so will inevitably embrace it.”

Alexander Frolov, HypeAuditor:

“The launch of Instagram Shopping and TikTok Shop are just the beginning of the rise of social commerce. We can expect to see new monetisation opportunities for creators, where they will be able to not only promote a product but encourage their audience to buy it directly from the platform shop.

“These shopping platforms are not revolutionary. Instead, they aim to simplify the purchase process, making it more seamless by not having to leave the platform in order to make a purchase. Marketers will face the challenge to adapt to these new features, while also ensuring a great shopping experience to their customers. In doing so, marketers will need to work in a more integrated way with their sales teams to ensure they can make the most of these new features.

“However, Meta and TikTok seem to be struggling to become stand up platform-driven commerce businesses. For instance, recently, Meta decided to shut down Reels affiliate and live shopping programmes and TikTok reportedly decided not to expand its ecommerce offering into the rest of Europe and the US, after it failed to take off in the UK.  This means, that as of now, live platform shopping is not a direct replacement form regular shopping processes.”

Benji Lamb, Vitabiotics:
“China is the best market to look to [for social commerce], as Douyin – TikTok’s original platform – launched ecommerce stores last year. The growth of live streaming is possible, as is more innovation in terms of ecommerce experiences (via augmented reality etc.) and interactivity. Social commerce, i.e. shopping as entertainment models, which are so prolific in China and APAC may gain traction as western platforms expand into the market.”

Campaigns need to be ‘all purpose’

Pierre-Loïc Assayag, Traackr:

“Social commerce has collapsed the traditional marketing funnel. One creator post can influence the consumer straight to conversion or loyalty, skipping many steps along the way. Every step of the funnel is just one click away. What that means for marketing teams is your campaigns need to be all purpose – you don’t run an awareness campaign or a loyalty campaign anymore. You create a campaign on TikTok and make sure your product is fully stocked because selling out is never outside the realm of possibility.

“The best way to approach influencer marketing is to understand that every influencer has their own strengths – some are great at building awareness, some convert highly – and to recruit a mix for every campaign.

“Looking internally, the traditional linear marketing funnel is the foundation for how most companies have organized marketing – siloing top of funnel and bottom of funnel marketing campaigns for example. But since the funnel has condensed, you need marketing talent that is well-rounded and can adapt in real-time to fuel influencer campaigns to reduce friction if something is performing well.”

New tools could further monetisation opportunities for creators…

Jim Meadows, Director of Influencer & Media, The Hut Group:

“We continue to see a parallel track between influencer and creator culture, with more and more nuanced skills in terms of commercialisation – being a live selling expert for example is lucrative right now and a viable career for those brave enough, whilst creators with established platforms are looking to shift away from multiple brand deals in favour of starting their own legacy projects and brands.

“There is increased competition to keep creators creating in order for platforms to serve ads as they have always done, however following TikTok’s creator marketplace we’re starting to see platforms shape their own networks for branded influencer marketing.”

Pierre-Loïc Assayag, Traackr:

“Influencers are getting a bigger share of the marketing budget and we will see the ‘professionalisation’ of influencers. With more workers impacted by layoffs and brands bringing more money to the table, many will turn their passions into a profession and seek new ways to make a living as a creator. Creators today have many options to make money, but these tools will boom in 2023. Creators will have access to tools with brands (influencer marketing), platforms (revenue share and syndication with TikTok, Instagram, etc.), personal outlets (ecommerce, social commerce, Substack)

“With more ways to make money, this raises the bar for brands to retain influencers. Brands need to manage them the same way they would manage customers. The next frontier is brands’ ability to build a creator experience and incentivise their teams for retention, so creators stay engaged and keep talking about the brand. You need to give creators a reason to work with you instead of another brand, platform or service.”

…but not all influencers will rely on platform rewards

Sarah Penny, The Influencer Group:

“If it is a trend that continues then it should democratise the industry more, as creators have more revenue streams and therefore are not entirely dependent on brand partnerships for funding. This in turn could allow for further diversification of content formats as creators can focus on content quality rather than commercial appeal for an income. However, this will depend on continuity of such activities. For example, we have seen Pinterest withdraw its Creator Rewards program, and if budgets tighten in 2023, we may see others follow suit.”

Alexander Frolov, HypeAuditor:

“It is unlikely that new features being offered around the monetisation of YouTube Shorts, and other platform equivalents, will make much of difference in terms of influencer income strategies. In fact, we found that 63% of UK-based influencers, with accounts ranging from one million plus followers to micro-influencers with under 10,000 followers, were either indifferent, not aware of these new features, or considered they were not needed.

“In a follow up question on whether they had plans to rely on exclusive paid content for subscribers to alleviate the decrease in affiliate commissions from brands in the current economic slowdown, 73% of the influencers who responded stated that they were not planning on it, or were not sure.

“In addition, recent data revealed that the majority of UK and US influencers surveyed stated that they had a second source of income. For this reason, I believe that these monetisation options will only be supplemental, rather than become primary income sources for most creators.”

TikTok’s winning formula will continue to draw in spend

Jim Meadows, The Hut Group:

“I believe TikTok will continue to steal advertising spend, having remained a relatively affordable platform for influencer marketing with a unique algorithm that supports virality. However, the launch of IG stores and in-feed shopping looks a very interesting space; we’re also poised to see the first commercialisations of mixed and virtual reality environments – looking at you, Horizon Worlds.”

Sarah Penny, The Influencer Group:

TikTok is definitely the platform that brands are focusing on. I think this is also only set to continue as brands looking to achieve high reach and engagement find that the platform’s performance is unrivalled. Brands will still go to Instagram as a safe option, but if organic reach continues to decline, we may also see brands move away as achieving previous KPIs organically proves more difficult.

“It’ll also be interesting to see if any of the newer platforms, such as BeReal, succumb to influencer marketing temptation and start to move in a direction that supports creators better.”

Pierre-Loïc Assayag, Traackr:

“While there is always a risk of it getting banned, TikTok has figured out a winning formula and has shifted our definition of “influencer” to “creator.” TikTok has proven that building an entertainment network is a better business model than a social network, and that’s why Meta is trying to emulate them. As social networks shift from connecting like-minded people to sharing entertaining content, TikTok is the only native platform and has a natural advantage in the creator economy.”

Alexander Frolov, HypeAuditor:

“Instagram and TikTok continue to dominate influencer marketing industry budgets across the board. Instagram’s reputation remains undisputed when it comes to influencer marketing, with years of longstanding influencer/brand relationships to prove it. It continues to offer brands the most potential for their influencer marketing strategy.

“However, competition remains sharp with the ever-growing popularity of TikTok, especially in relation to Generation Z. The reason for the platform’s continuing hype is the many opportunities for influencers and users to express themselves creatively.

“According to recent analysis, close to 40% of those aged between 18-24 prefer to use TikTok or Instagram instead of Google for their online searches. Marketers already understand the potential of these two platforms to authentically connect with their target audiences. However, in the next year, they will increasingly adapt and diversify their marketing strategy to the specifics of these two platforms to fully reap the benefits they offer.”

 

Citation: If you would like to find out more about the source of this article – Influencer marketing in 2023: What do the experts predict?, see here.

 

 

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