Is this the end of Influencer Marketing as we know it?
According to Influencer Marketing Hub, the influencer marketing industry was projected to grow to approximately $9.7B in 2020. In addition, the number of influencer marketing-focused platforms and agencies has gone from under 200 in 2015 to over 1,100 in 2019.
And then the world changed.
Stories abound across the web about influencers who were, until recently, actively generating tens of thousands of dollars in revenue from major brand sponsorships and partnerships, all of which have gone stone-cold silent. The vast majority of influencer connected events and campaigns have been postponed long term or canceled outright as brands turn their focus to survival, cost-cutting, and government subsidies.
Many influencers have adapted in order to remain engaged with their audiences. Travel bloggers are posting recipes, fashion YouTubers now offer social distancing tips and food Instagrammers have pivoted to sharing insights on how to keep your kids entertained at home.
But this is just the beginning of what may well be a paradigm shift in influencer marketing as we know it.
What’s doing well right now? Live streaming services like Twitch and some interactive fitness influencers offering live workout sessions. TikTok has also seen a significant rise in downloads and engagement is up across all social platforms, which makes perfect sense since everyone is home. Essentially, anything that helps pass the time at home and keep the kids occupied is doing well from an engagement perspective but does that mean people are buying? And does it indicate that influencers are making a living?
The Impact on Influencers
Large scale influencers are being relied upon for PSA’s. Finland has become the first country to deem influencers as essential workers in order to help the dissemination of critical information during the pandemic. The thinking is that influencers are just as important as mainstream media when it comes to getting highly important messages in front of a public audience.
Overall, you can start to see a trend developing here. Influencers are sharing information of public interest or content that is entertaining in order to help people stay engaged but, under the circumstances, the vast majority of influencers aren’t generating income right now nor is there any expectation that this will change in the near future. For some, it may never go back to what was ‘normal’ and if it does, many influencers such as those specializing in hospitality, travel, and events may be forced to consider finding other ways to generate revenue streams.
All in all, staying relevant and top of mind through any form of content sharing may be important for influencers in the short term but eventually, the bills need to be paid.
Time to Reinvent?
The reinvention of oneself as an influencer may be easier said than done. For many who are involved in the industry, blogging and influencer marketing is all they know. This is their livelihood. This is still a relatively new industry that until a few years ago did not exist. It is comprised of hard-working people who have known no other career or in the case of certain verticals such as travel, we have seen hobby bloggers successfully turn a passion into a career of influencer marketing.
If you’re a food blogger who has been setting off to destinations as part of your everyday work, you are now asking yourself what comes next?
If there is an opportunity here, it lies in your ability as an influencer to evaluate the current situation in order to determine whether or not the steps you are taking today are going to create long term viability and sustainability for your personal brand. And perhaps the question you need to start by asking is whether you are actually a brand in the traditional sense or you are running an influencer business. That question may help influencers determine if they truly have staying power once this all passes.
Brands sustain themselves throughout difficult times because they have recognition and history. They deliver value, address problems or satisfy needs. Influencer marketing has created a different inflection for the term ‘brand’. The moment a writer launches a journey to become an influencer they talk about their ‘brand’. But are you really a brand to your clients or are you a service provider at a specific point in time?
There is only one Coke, one McDonald’s, One Disney. Yes, there are alternatives to these product brands but when it comes to influencers, there are many fashion, beauty and wellness bloggers. As things return to normal, many influencers will find out if they are truly an indispensable brand in the eyes of their partners.
The Impact on the Industry
There are dozens of influencer marketing platforms ranging from free models with limited search capabilities to enterprise offerings with extensive search, outreach and program management capabilities.
During the last economic downturn in 2008, a large number of martech platforms ceased to exist or were forced to enter into mergers with competitors in order to survive. A repeat of these events will likely be expedited in the influencer martech space given the speed and magnitude with which the industry has been devastated.
The numbers tell the story. If, for example, there were 10,000 ongoing influencer campaigns spread across 1,000 agencies and platforms and now there are 1,000 or, to be generous, even 3,000 campaigns, some agencies and platforms will be left behind. Which ones survive will be dictated by a combination of factors such as the strength of their management team, cash reserves and access to capital (maintaining and managing tech platforms requires personnel and resources), the size of their influencer database (a valued asset for potential suitors assuming these same influencers can weather the storm), the nature of their clients (to what degree have they impacted by the shutdown and how fast can they recover), the speed with which theses agencies and platforms can adapt to the current environment (if at all possible), and the ability to identify alternative sources of revenues and service offerings during this period.
In the weeks and months ahead, look for platforms to disappear and merge. Mergers will ultimately lead to even better technologies and an evolution of the industry.
The Takeaway
If there’s one thing right now that’s certain about the influencer industry it’s that the future is uncertain. The road ahead will be very rocky and the short term will be painful in the best of scenarios.
For influencers who understand that the industry may be forever changed, you can start to plan for the pending landscape and reevaluate the services you offer your clients and the ways in which you offer those services. Consider partnering with other influencers to mitigate challenges and risks and start thinking outside your comfort zone if you want to reinvent yourself and evolve beyond your traditional expertise.
For those operating on the tech side of the industry, be prepared to challenge for a smaller piece of real estate. With fewer opportunities expected in the vertical, now may be the time to also consider strategic partnerships and a more thorough vetting of your influencer database in order to provide industry-leading quality to your customers.
The industry has changed. Be prepared to do likewise.
