The unknown effects of the economic downturn on influencers

Influencers often have a reputation for showcasing their lavish lifestyles. Although ambitious posts are a source of bread and butter for content creators, this can be considered insensitive and designed at a time when the cost of living is rising.

However, it may come as a surprise to some that influencers are currently facing uncertain economic times. Indeed, with the current economic downturn, UK marketing budgets are expected to be reduced to explain the halt in consumer spending.

To understand how this tangibly impacts content creators, HypeAuditor conducted a survey last month among 141 influencers in the US and UK. Findings revealed that from canceled campaigns to late payments, influencers are feeling the blow as brands rethink spending due to the economic downturn.

Despite the current need for brands to withdraw partnerships with influencers, marketers must not forget the importance of effectively managing their relationships with them to ensure successful partnerships in the future when the economy recovers. In addition, influencer marketing remains one of the most effective tools for communicating authentically with audiences – something that is even more important at the moment.

The future of influencers: finances and interests

The economic downturn affects the relationship between brands and influencers. According to our survey, since March 2022, 36.7% of UK-based influencers have reported being asked to lower their rates. This compares to 22.2% of US-based influencers. Moreover, 14 countries reported a staggering 30% or more drop in fees for influencers who lowered their rates, while 36 said the drop was between 5-20%.

In addition to campaigns being canceled by brands, influencers surveyed reported less available work, or brands lobbied for talent-only partnerships and reduced campaign budgets.

Besides the relational impact on brand partnerships, it is also difficult for influencers to market to their audience, who tighten their belts. In fact, according to recent findings, nearly half of UK consumers buy fewer clothes and shoes, while the over-50s buy fewer electronics. Instead, more than a third (37%) of low- and middle-income consumers now buy only essential items.

where consumers reassess their purchases; Influencers are likely to experience a lower rate of participation in products or activities that are perceived as less important. This may force some content creators to rethink what they post and how they communicate with their audience, forcing them to adjust to what their followers expect now, to make sure they don’t look deaf.

Ultimately, this affects the way influencers view the future of their careers. In our survey, most influencers report that they have a second source of income and 27 out of 141 respondents have diversified or are in the process of diversifying their income.

Real marketing can’t be replaced

However, despite these challenges, influencer marketing remains an effective tool for brands. It appears that influencer marketing is just as effective as TV advertising in terms of brand recall. Research on campaign engagement in 750 adults in the UK found that 12% recognized the experienced advertiser in advertising compared to 13% via influencer marketing.

The advantage of influencer marketing is that it is unique and personal. It is the most authentic connection between brands and their audience. The audience chose to pursue the talent. Therefore, they are more likely to be drawn to this type of marketing.

Despite the general cynicism and controversial reputation about influencers endorsing a product or service, the public still appreciates influencer marketing because of its originality. With the current economic difficulties, consumers may actually be more willing to welcome ambitious jobs as a temporary escape providing an excellent opportunity for brands to connect with their audiences.

Brands should also be mindful of their relationship with influencers, especially if they hope to resume partnerships with them in the future. Canceled campaigns or late payments have tangible impacts on the financial well-being of influencers, especially nano-influencers who rely heavily on deals to support themselves financially.

Let’s not forget that the pay standard for influencers has been an ongoing problem in the UK. The Commission on Digital, Culture, Media and Sports has made it clear in the past that push from brands “varies significantly”. This also echoed reports from the Competition and Markets Authority (CMA) which highlighted that the compliance rates of influencers with UK advertising regulations remain unacceptably low. In the current economic downturn, brands must ensure that they act as trusted partners for influencers.

concluding remarks

Despite the current challenges, marketers need to remember the value of influencer marketing. Its effectiveness depends on its uniqueness and originality – something that other forms of marketing lack. They should also be aware of their relationship with influencers and should avoid severing ties with them, to ensure that they can continue to rely on effective partnerships when the economy recovers.

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