Marketing budgets, though under scrutiny, are expected to rise in 2023. That’s especially true for influencer marketing due to Instagram’s entrenchment and TikTok’s ascent with users.
“Influencer marketing certainly isn't immune to a potential budget pullback. But what we've seen so far is that it has been more resilient than other types of digital marketing, and brands have continued to spend on their partnerships, particularly with long-term creator partners, throughout this volatile economic environment,” our analyst Jasmine Enberg said on a recent “Behind the Numbers: The Daily” podcast.
“I do expect that there will be brands that will tighten their budgets even further, but for now, it's among one of the better-growing digital marketing tactics.”
Why the resilience? “Well, there [are] a couple of reasons,” said Enberg. “Influencers, especially micro-influencers and nano-influencers, have really risen up over the past year, and they have been able to prove that they can drive real sales, especially from certain subsets of consumers like Gen Z and some millennials.”
“We're seeing brands fuel more money into micro- and nano-influencers, and that combined then is pushing up the amount of money that's being spent on influencer partnerships overall,” said Enberg.
The other reason? TikTok. TikTok continues to rise in both consumer usage and brand usage, said Enberg, resulting in more money flowing to influencer marketing on the platform.
We forecast that companies will spend $5 billion on influencer marketing in 2022, rising to $6.16 billion in 2023. For comparison, we expect all digital advertising spend to hit $248.72 billion this year. Here are a few more stats to know:
“Instagram creators tend to charge a much larger fee, as do YouTube creators, than say creators on TikTok, even though that gap is starting to narrow,” said Enberg.
Chasing the leader
“Instagram is still, by and large, the leader in the influencer marketing space in terms of both the number of marketers that are using the platform as well as the amount of money that they're spending there,” said Enberg.
“But what we're also seeing is that a lot of that content that they are posting on to Instagram is being repurposed from TikTok.”
In fact, only about 20% of creators on Instagram are posting there regularly, according to internal Meta documents reviewed by The Wall Street Journal.
“We're really seeing TikTok start to move in on these sort of OGs of influencer marketing as it rises,” said Enberg.
These factors combined mean it’s a good time to experiment with influencer marketing on TikTok. Prices are still lower than other platforms, while momentum is certainly behind the ByteDance-owned platform.
Two tips for working with creators
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