INFLUENCERS MANIA: STILL ON?
It's not a surprise that over the last decade, print advertising has gone severely down and customer attention has drastically pivoted towards online platforms. The big losses from the decrease on sales seen by publishers (including big names like Vogue) have not been compensated by other, new online revenues which remain very small.
The change from off- to online happened for different reasons but this was surely catalyzed by the fact that the latter permits a much better performance tracking which leads to better fine tuning which leads to more $$$. You know how the story goes, right? Welcome to the capitalist world, everyone! Miss that feeling of reading a freshly printed, heaven scented newspaper? Well, sorry for you. Welcome instead "Facebook & Friends" who will tell you 24/7 what to buy, when and how, thanks to their perfectly tuned and powerful army of influencers.
And you, poor thing, who were pissed off when you mom told you to eat spinach when you were little, thinking THAT was manipulation... AH!
...BUT THEN COVID HAPPENED
2020 was off to a great start, if we see this from an influencer's point of you. Until Paris Fashion Week, big contracts were signed and ready to kick off, as confirmed by Max Stein, founder & CEO of Brigade Talents, Raina Penchansky, co-founder & CEO of DBA or directly from influencer Leandra Medine, founder of Man Repeller. We are talking about an industry generating $8 billion a year and as much as $20k per post in average. Then of course, we have the "wunderkinds" who are just cash machines and raise the bar even higher, like the Kardashian's family (Kylie Jenner made supposedly $1 million for one post only).
Just to put this into perspective, $8 billion was the GDP of Niger for 2017. Gambia's was $1.5 billions for the same period. I think I don't need to add anything more here.
But something unexpected arrived and it pretty much changed it all, from influencers' reality to the way everyone now juggles between dish washing, Zoom work calls, kids' diapers changing and Skype yoga class with that new teacher from Sri Lanka you found on IG. Ladies and gentlemen, COVID-19.
Without going too much into details, COVID really came like a kick in the nuts for the fashion industry (which probably needed it) and has had pretty bad implications on revenues as consumers' demand dropped to unseen levels.
The first thing you'd do when you lose income, is cut on unnecessary costs (like when you stop going to the restaurant towards the end of the month) and the main pillars for this cuts have been *drum roll*: rents, staff and unnecessary marketing costs.
Influencers' money of course has been cut as well, also considering that all things jaw-dropping have been cancelled. Cannes, the Met Gala, the Emmys.... all #ByeFelicia 'ed.
ENGAGEMENT UP // CONVERSION DOWN
Wake up, brew coffee, try to fix my hair, brew coffee again, shower, more coffee, choose the nicest shirt, bow tie and fancy glasses for my upcoming video call, paired with the fanciest Marvel underwear I own. Because it's what's chest-up that matters. Apart from this, the rest of the day revolves around planning hour by hour Facebook and IG lives, fashion updates and webinars or podcasts while cooking or hoovering.
I am sure I am not alone on this routine that makes us, during this confinement, be even more glued to the screens. The fact that we are basically living on WiFi consumption and social media feed, has indeed made engagement on sponsored content increased exponentially (20 to 50% for IG).
This has not created though an equal counterpart on conversion since people's utmost priority now is not to buy an evening dress endorsed by the coolest kid out there.
Contracts have been cancelled and basically whatever was left is not bringing in as much money as it should, with influencers going mental on finding new ways to capture the audiences' undivided attention.
“As I'm turning some marketing channels off, I’m turning other stuff on to test what’s more efficient, so nothing is permanent,” said Murty of Fivefour Clothing. “It would be irresponsible to not check what is and isn’t cost-effective right now.”
Globally, the influencers industry is estimated to make 30% less revenues than planned in 2020 and this if things do not get worse over the next months.
THE BIG AMBIVALENCE
Even if brands are cutting down on influencers' costs, the essence of their job and effect on consumers have never been more relevant.
Big agencies like Fohr who works with ~100K influencers, took a bad hit over the first weeks of confinement but numbers seem to be finally on the rise. Also, influencers like Rachel Parcell or Emily Jackson did not refrain from launching their new brands / collections and things are going pretty well. Rachel, for instance, has already seen double digits increase in sales thanks to the platform's partnership promotions she collaborated with (RewardStyle). Looks like it's still a good idea to launch a new brand now in order to have the 3 to 5 months needed to see sales pick up, engage with customers when traffic is at its highest level and be ready to sell when COVID's over and customers will go back to buying. If this happens, it's still a big industry question mark though.
It all needs to find a new balance that's not fully fine tuned. What people need now more than ever is to escape from the heaviness of the situation and a window on what's happening out there. Distractions like watching your favorite IG people cooking while talking about what to wear is a big source of amusement but people are doing it less for aspirational reasons and more for entertainment . And influencers need to capitalize on this.
Customers, especially market driver Gen-Z, are feeling the first signs of fatigue from crap-filled product placements and are in need for more close-to-life content. People start asking themselves for the very first time: do I need someone to tell me what to buy? What do influencers bring to my life?
Is the influencers era, as we know it, over? What are influencers doing to keep their revenue stream and to feed all the behind-the-lens mouths that depend on them? There are not a billion options for them right now and the only way out is change. The whole business model is being shaken and its foundations rocked. Maybe it was about time?
The main tactic adopted is to focus on the community factor that remains the main asset VS brands and move away from mere cold and distant product selling. Endorse another lipstick just for the sake of it won't work anymore with customers, who are sick and tired to be used as targets for ruthless marketing techniques.
This has translated into helping smaller business, new ideas and above all move towards more sustainable products and practices. Maybe because it's buzzy, maybe because they believe in it... whatever is the reason, the good effect is what it all boils down to.
Campaigns that revolve around spreading a message rather then boosting a brand are being the strongest one at the moment and it is something influencers are adopting quickly, very quickly I would say. It's a "change or die" world out there.
Some influencers are also deciding to put their eggs in different baskets: is beauty now doing better than apparel? Hello Sephora! Are productivity items, online education or then again grocery goods selling more than clothes? Bye Louis Vuitton and hello Amazon!
Because of this, this renewal of the influencing industry looks very good on paper but it raises a teeny tiny question: are we assisting to a real, deep change or just a money driven temporary switch of sides?