Sun, Jun 15, 2025 page9

• Influencer marketing gains ground as ad budgets tighten

  While younger consumers are ‘suspicious’ of traditional corporate branding, social media influencers offer cost-effective outreach to their cynical Gen-Z networks

  • by Chloe Meley, Maggie Shiltagh and Rachel Phua / Bloomberg
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  Ashton Hall’s morning routine involves dunking his head in iced Saratoga Spring Water. For the company that sells the bottled water — Hall’s brand of choice for drinking, brushing his teeth and submerging himself — that is fantastic news.

  “We’re so thankful to this incredible fitness influencer called Ashton Hall,” Saratoga owner Primo Brands Corp’s CEO Robbert Rietbroek said on an earnings call after Hall’s morning routine video went viral. “He really helped put our brand on the map.”

  Primo Brands, which was not affiliated with Hall when he made his video, is among the increasing number of companies benefiting from influencer cosigns. Handbag maker Coach, once synonymous with mall discounts, has become a Gen-Z status symbol and saw sales soar thanks to TikTok influencers expanding their collection of purses adorned with little cherry or pretzel charms. With economic turmoil squeezing ad budgets, content creators are seen as better value than other marketing areas.

  

  Attendees enjoy an immersive experience with Q50 ambassador Jennie Garth at QVC and TikTok’s Super Brand Day. The event marked a first-of-its-kind partnership, blending entertainment, community and commerce, in Los Angeles on May 14.

  Photo: AP Content Services for QVC

  “While it’s true we are seeing brands begin to pull back in marketing expenditure as a whole, the creator economy is surging,” said Kenny Gold, head of social, content and influencer at Deloitte Digital. The global influencer marketing industry is projected to grow 36 percent this year to reach US$33 billion, Statista data shows.

  “This year will be the first year that advertising revenue on user generated content and platforms actually outpaces the ad revenue on professionally produced content,” said Kate Scott-Dawkins, WPP Media’s global president of business intelligence. “That’s a big deal.”

  Unilever PLC’s recently appointed CEO, Fernando Fernandez, said he would hire 20 times more influencers as part of a social-first marketing strategy because consumers are “suspicious” of corporate branding.

  The owner of Dove soap and Hellmann’s mayonnaise plans to dedicate as much as 50 percent of its ad budget to social media, up from 30 percent.

  While fashion, beauty and accessories lead the way in employing influencer marketing, the strategy is gaining ground among consumer goods companies amid economic turbulence who are increasingly relying on influencers to position their products as premium, said Ruben Schreurs, CEO of media analytics firm Ebiquity PLC.

  With the expense of TV advertising, brands are starting to look at maximizing their reach more effectively, according to Alex Burgess, global president of The Goat Agency, which counts Unilever as one of its biggest clients.

  Globally, brands increased investment in influencer partnerships by 49 percent last year and content creators topped social media marketing budgets, taking up a quarter of the total annual spending on average, according to Deloitte.

  Influencer marketing spending is expected “to continue to accelerate,” said Scott Morris, chief marketing officer of social media management company Sprout Social Inc.

  Within the last year, Publicis Groupe SA bought Influential, the largest influencer marketing company in the world by revenue, and BR Media Group, a leader in Latin America that works with 80 percent of the region’s biggest influencers.

  Publicis’ backing of players like Influential is a “strong indicator” that influencer marketing is no longer a niche, said Oliver Lewis, CEO of The Fifth, an influencer marketing agency recently acquired by digital media company Brave Bison PLC.

  “They have to be very acquisitive because if they don’t acquire these capabilities across their network, they’ll be left behind,” Ebiquity’s Schreurs said.

  Companies often favor smaller, independent, topic-specific influencer agencies that can connect them to creators with a strong reach and a defined audience.

  The appeal is the direct line to consumers.

  “It works because it feels personal, relevant and real,” Sprout Social’s Morris said. “These are qualities that traditional advertising often lacks.”

  “People trust people more than they trust brands,” said Rahul Titus, global head of influence at WPP-owned Ogilvy. “Authenticity sells.”

  This resonates with Gen Z digital natives in particular, a cohort with US$450 billion in global spending power. Micro-influencers — creators with 10,000 to 100,000 followers — “exert great influence” on the “the savvy and cynical” Gen Z, Jay Sinha, an associate professor of marketing at Temple University’s Fox School of Business, wrote in a paper.

  As social commerce — where people buy and sell on social media platforms like TikTok Shop — becomes mainstream, brands want to create content with an “easy onward journey to purchase,” said Jessica Tamsedge, EMEA CEO of Dentsu Group Inc’s influence division.

  That flexibility, affordability — they are cheaper than celebrities — and direct impact, compared with the uncertain results of shooting a TV ad or setting up billboards, is appealing.

  “Unlike more traditional channels, we’re not weighed down by long lead times or heavy production guardrails,” said Nick Rogers, founder of influencer marketing agency The Cast, adding that campaign messaging can be adjusted, influencers recast and creative direction altered very quickly.

  That immediate feedback loop comes with a key risk: “When it goes wrong, because it’s social, it goes wrong very quickly,” Ogilvy’s Titus said.

  German sportswear maker Adidas AG was forced to publicly cut ties with Kanye West in 2022, highlighting the risk of trusting a public figure with unlimited access to a phone.

  One way around that may be the emergence of artificial intelligence (AI)-generated influencers, some of which have large followings on Instagram, TikTok or OnlyFans.

  Meta Platforms Inc plans to fully automate ad creation with AI, including imagery, video, text and audience targeting, the Wall Street Journal reported.

  “It’s going to be very interesting to see how much value there is in being human versus an AI when it comes to engaging audiences,” Ebiquity’s Schreurs said, adding that influencers’ livelihood may be at risk from the shift.

  When it comes to concerns over brand safety, clients could look more favorably on an AI-generated influencer where everything can be controlled and there are no skeletons in the closet, WPP Media’s Scott-Dawkins said.

  For now, the growth runway remains clear for influencer marketing.

  “What used to be seen as a bolt-on is now right at the center,” The Fifth’s Lewis said.
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