The World's Gorgeous & Glam Feel COVID Pinch
A glut of recent studies suggests that the influencer economy is currently not living its best life.
Brands have cancelled or looked to postpone influencer activity at scale, with many concerned about both tone and costs.
Influencers' sponsored content has experienced a significant decrease week after week since mid-February when the crisis emerged, according to a recent report from Launchmetrics, a marketing-analytics firm.
Sponsored posts on Instagram fell from representing 35% of influencer content in mid-February to 4% of content in mid-April.
Influencer marketing activity has historically skewed heavily towards areas such as fashion, beauty and travel.
But with around one-third of humanity under lockdown measures, travel is not an option. While looking even remotely cool or attractive seems a bit, well, "un-essential"…
"Better known as Birkin Boy for his collection of designer handbags worth over £100,000 – he is paid hundreds of pounds to attend events and feature brands on his Instagram account. Now he says he has to borrow money from his father to make ends meet.
"Everything has been cancelled," he explains. "Normally, I post pictures with my bags and luxury clothes, but nobody wants to see that at the moment – nobody is interested in fashion because they're not going anywhere."
Influencer Activity Started 2020 With A Bang
Up until COVID-19 influencer marketing was on an excellent run.
In 2020 brands in the fashion, luxury and beauty sector had upped their budgets, according to Launchmetrics.
Most had increased budgets by between 10% – 30%, and the percentage of marketers investing more than $10K increased by 10% compared to 2019.
Instagram is still the most popular channel for influencers when it comes to the content they produce. Brands also favour Instagram as the number one platform for collaborations (42%), specifically seeing the most results via Stories.
Although Instagram is still the number one platform for influencer marketing, TikTok is making a big play when it comes to capturing Millennial and Gen Z consumers.
Launchmetrics' data suggests that of the brands investing in new channels, specifically TikTok, 55% said it was because they want to engage with a new consumer.
Cut-price Influencer Activity
Over the past five years, influencer marketing costs have soared.
Data released in late 2019 claimed that the average cost for a sponsored Instagram photo had jumped from US$134 in 2014 to US$1,642 in 2019.
The data, compiled by influencer marketplace Izea, examined negotiated rates between marketers and creators ranging from micro-influencers to celebrities, since 2006.
Izea provided historical average transaction prices paid for sponsored blog posts, Instagram Posts, Facebook posts, Tweets, and YouTube videos.
2014-2019 Sponsored Post Price Increases by Platform:
- A Facebook Status Update had risen 49.4x from $8 to $395 on average
- A YouTube Video had risen 16x from $420 to $6,700 on average
- A Twitter Status Update had risen 14.6x from $29 to $422 on average
- An Instagram Photo had risen 12.3x from $134 to $1,643 on average
- A Blog Post had risen 3.54x from $407 to $1,442 on average
However, as demand drops from brands, costs are plunging. Much as they did during the 2007/2008 Global Financial Crisis, as demonstrated on the graphic above.
From 2008 to 2009 Cost Per Post fell by 45%, then another 42% from 2009 to 2010 before prices began to recover. As a result of COVID-19, Izea's latest data predicts a near term 15-25% decrease in Cost Per Post.
"Despite increased social media usage, expect the price per post on all social platforms to fall dramatically in the short term, and that may continue depending on the length of Coronavirus impact."
For marketers, the takeaways are obvious.
Not only are costs at historic lows, but the nature of influencer dynamics will likely change forever. Hopefully for the better, as influencers and marketers explore and discover more creative, analytical and open ways of collaboration.