Why is the influencer economy booming when influencer fatigue is peaking?

A March 2024 FT article highlighted the growth of the European influencer economy, as late adopting brands shift budgets away from traditional media.

At the same time, all of us have come across a growing number of headlines like the below in recent years:

Given growing discontent with influencer marketing, is it time for brands to wonder, to paraphrase an old saying, which half of the influencer budget is wasted?

Responding to the high volume of paid endorsements, Gen Z now crave unbiased brand information above all else, rating “a lack of independent review or info” as the top barrier to purchase (46%).

If independent info is so essential, why is the influencer economy booming?

To be fair, the “influence-industrial complex” is confusing, making it challenging to tell agency spin from industry facts, paid from organic posts, large engagement scores from truly impactful posts. The below hopes to bring some clarity, before highlighting strategies worth some consideration:

1. Paid influencer posts* can outperform (e.g., this Diet Coke), but given influencer fatigue, content needs to adopt new codes and a different intent: aim for your video/visual to engage deeply, but leave the convincing part to comments.

2. Influencers do drive brand growth today, but a growing share of that ‘influence’ is from organic, un-remunerated activity, especially for fast growing brands & especially on TikTok (our past newsletter explains why)

3. At least 10% of top Earned posts are doing well because they are perceived to be organic while they are in fact remunerated² . Undisclosed relationships risk puncturing consumer trust faster than you can spell “illegal”, but many risk it because the premium from being perceived as organic outweighs the penalty (esp. on TikTok).

4. Brands still invest huge sums with celebs whose audience engages with THEM much more than with the products they endorse. Massive Earned engagement scores look good, but the reality is they don’t always translate into brand impact. 🙈🙊🙉

   

Given the above, what should brands do to maximise social ROI?

i) Don’t break consumers’ trusts by breaking regulations: instead, improve your content skills, your choice of partners, and the guidelines you give them. An elite group of 10% of brands have radically updated their social playbooks and reaped unprecedented benefits.

ii) Don’t over-rely on paid influence, but certainly keep it in your mix. The brands getting the best social returns aren’t investing more than others on influencers, but are in fact getting a lot more unpaid (i.e. organic) Earned activity.

How do they achieve it? Thanks to deeply engaging social content (owned, paid influencers), but also better community management, and socially savvy offline investments designed to fuel user generated content (e.g. samples, events, merch’, outdoor ads, partners etc.). Read our past newsletter here on why this is the Age of Organic Earned, and work with us for a comprehensive playbook on this.

@biebersgoodside.2

It girl ✨ #haileybieber #rhodeskin #skincare #trending #celebrity

Get a sneak peek at our organic earned cycle framework below. ⬇️

² There also quite a few 2-for-1, arrangements, i.e. creators posting 2x (or more) about a brand, but only officially getting paid on 1 of them. The undeclared post is the one that does best because viewers think it’s organic, i.e. authentic and trustworthy

*paid Earned includes any form of incentive/remuneration: we have advanced metrics that can tell us if a post is performing above/below average for that influencer. On average, a typical paid endorsement achieved ~80% as well as an unbranded post from that influencer until around 2020, but in recent years, that average fell to 50-60% — this reflects influencer fatigue. That number is even lower on TikTok due to the algorithm being very discriminating.