Related Articles
Nordstrom, one of the first major retail brands to rely on influencers (to push their big annual sales event), announced this year they are cutting back on their investment in large-scale influencer marketing.
Is this the beginning of a trend?
Although influencer marketing spend is estimated to reach $4 billionby the end of 2022, companies are starting to tighten their spending belts and look at every line item as a source of cost savings. According to Crunchbase, over 30,000 jobs have been eliminated this year in the tech sector alone.
Lifestyle and direct-to-consumer (DTC) brands are still very reliant on “everyday people” to promote their products and services. But, as with all marketing tactics, smart and analytical leaders will take a closer look at the ROI of every marketing channel and determine whether those free samples, monthly fees and seemingly endless Insta and TikTok posts are resulting in sales and/or brand loyalty.
We’ve seen it happen in every marketing era. CMOs and their teams fall in love with new and promising awareness, engagement and sales channels. One of my favorite episodes of MadMen is one where the fictional Harry Crane character tries to convince his colleagues that television advertising is the future. They had no clue why he was so passionate about this new medium, but his colleagues gradually embraced Crane’s recommendation and even built out a new division of the agency.
The prophecy was true, but let’s look at where conventional TV advertising sits these days. It’s hardly dead, but streaming services have disrupted that sector.
The direct mail boom was part of another unique marketing era. Mailboxes and kitchen counters across the U.S. were cluttered with catalogs, credit card offers and colorful postcards. But where is that industry now? It still exists, but increases in paper/postal costs, a greater focus on sustainability and the rise of digital media, dramatically reduced the demand and utility for this media.
I believe that deflation rather than a massive explosion is what will happen to influencer marketing. User-generated content is here to stay. Endorsement as a marketing channel is hardly new, although the endorsers are now everyday people rather than celebrities. A creators conference I attended earlier this year gave me a fresh perspective: The focus was on engagement and true fan bases rather than random viewers and observers. People will likely continue to buy from other consumers they know, like and trust.
The Rolling Stone Culture Council is an invitation-only community for Influencers, Innovators and Creatives. Do I qualify?
But just because I see a hot stranger online in a swimsuit or drinking a new spiked seltzer, will I pull out my wallet? Probably not. Keep in mind too that the population is aging and a significant amount of disposable income is in the hands of older adults who may not relate to the endorsers that advertisers are serving up to them.
Influencer marketing is a great cost-effective medium for building mass awareness, but I predict:
• We will soon see the rise of what I call the “quinfluencer” or quality influencer. Advertisers will want to know the demographics of follower databases as well as their size.
• Advertisers will still be interested in mass reach and ensuring that their products look a little cooler because they are in the hands of cool people with big followings.
• Metrics will become even more critical, as CMOs and CEOs ask, “What was the return on our multi-million dollar investment?” Engagement KPIs will likely become even more important than followings and likes.
• Influencers will span generations and other demographics, as advertisers realize that buyers want to see people who look like them endorsing products.
The bubble will not burst, but more professional marketers will examine the bubble. We may see more companies like Nordstrom asking more questions about influencer marketing rather than assuming it’s going to float their bottom lines for the next decade.
