- Marketers and digital creators are adjusting to rapid changes in the influencer-marketing industry as the coronavirus continues to spread globally.
- As with most businesses in the ad industry, professionals are trimming budgets, canceling events, and looking for alternative revenue streams.
- Business Insider spoke with influencer-marketing professionals across the industry to better understand how they are adjusting their businesses to continue to earn a living during the coronavirus pandemic and the resulting economic turmoil.
- Subscribe to Business Insider’s influencer newsletter: Influencer Dashboard.
This post will be added to when new information becomes available and was last updated on July 9, 2020.
As the near-term effects of the coronavirus outbreak continue to be felt across the global economy, businesses and creators in the influencer-marketing industry are doing their best to adapt.
Influencers have seen some of their sponsorship deals shut down and events cancelled, with many shifting their focus to alternative revenue streams that allow them to continue to earn a living without leaving their homes.
Influencer-marketing agencies are seeing brands postpone campaigns while also observing that engagement on social-media posts is higher than normal as more consumers spend time in physical isolation. Advertisers are also discovering that the influencer-marketing business model could be particularly well-suited to a time in which DIY ad content filmed at home remains viable while commercial photo shoots are shut down.
Business Insider spoke with influencer-marketing professionals across the industry to better understand how they are adjusting their businesses during the coronavirus pandemic and the resulting economic turmoil.
Sponsored content deals have faded for influencers as brands cut ad budgets
Instagram influencers and YouTube creators who earn money through sponsorships are facing a steep decline in business.
Sponsored posts on Instagram fell from representing 35% of influencer content in mid-February to 4% of creator content in mid-April, according to a report from the marketing-analytics firm Launchmetrics. The drop comes as many influencers have had deals put on hold. Some marketers are predicting a near-term 15 to 25% dip in the average price of a sponsored post as demand for branded influencer content declines.
For travel and event-based creators whose content depends on being able to leave their homes, the sponsored deal dropoff has been devastating.
“I think a lot of people in the travel industry are holding their breath,” said travel blogger Oneika Raymond, who has 84,900 Instagram followers. “Companies are reluctant to take on anything new and therefore that is impacting the income of creators.”
Many brands have postponed influencer-marketing campaigns in an effort to cut costs and avoid appearing insensitive during a public-health crisis.
For creators, it’s unclear when – and if – these sponsored content opportunities will return.
Some brands are delaying campaigns so they can make logistical adjustments to influencer work that once required travel or on-site production. Others are pushing back launch dates to retool campaign messaging that was written before the coronavirus outbreak and now feels out of touch. And several influencer agencies told Business Insider that having a campaign “on pause” is often just a polite way of saying that it’s cancelled.
Influencers and marketers are shifting strategies to continue to earn a living
While sponsored content has long been a predictable (and essential) source of income for digital creators, the industry has matured well beyond branded posts, and the influencer economy won’t be destroyed by the economic downturn.
The creator industry now includes a slew of non-ad-revenue opportunities, including merchandise sales through companies like Fanjoy, e-commerce affiliate revenue through platforms like RewardStyle, recurring subscription income through services like Patreon, and a variety of other categories.
“It’s definitely not going to be the end of influencer marketing,” said Ricky Ray Butler, the CEO of the influencer-marketing agency BEN. “Musicians and other celebrities are now acting like influencers, seeing what the buzz is about on platforms like TikTok. Content creators should be creating more now than ever before, even if they are making less money. The creators that are innovating today and connecting with their audiences will be remembered.”
Some publishers and creators are leaning into membership programs that offer a dependable source of revenue separate from the volatile ad market.
The YouTube content company FBE, which has over 33 million subscribers across its network of YouTube channels, relaunched its membership program in May as part of a push to diversify its earnings outside of advertising.
“I’ve been pretty open about calling this an RPM crisis,” the company’s CEO Marc Hustvedt said. “In some cases this is 40% to 60% down from where we were right before the whole quarantine began. As you look to diversification of revenue and why that’s important – especially when you’re seeing real compressions of CPMs right now – you see why it’s even more important to not be reliant on that single revenue stream.”
Some digital creators are tapping into alternative revenue streams like consulting, teaching, and coaching, which fall outside the norm of what typically constitutes influencer work.
“I think focusing on the long term, and setting adjusted and realistic goals every day to keep you focused and not distracted by short-term blues, helps me a ton,” said Christina Vidal, an Instagram influencer.
Read the full post: Instagram and YouTube stars are shifting strategies as some influencer-marketing sectors hit a ‘standstill,’ focusing on income streams like directly selling products and online coaching
Digital creators with specialized production skills appear to be better positioned than most to continue working with limited disruptions during an extended period of sheltering in place.
As production companies shut down photo and video shoots in order to adhere to social-distancing measures, some brands have been turning to influencers to create ad content. The influencer-marketing agency Obviously told Business Insider that it’s seen an increase in the number of brands looking to hire influencers specifically for content creation.
“For the first time, big brands aren’t able to make those big budget television ads,” said Karyn Spencer, the senior vice president of partnerships at Whalar, an influencer-marketing agency. “You don’t need that full-blown production anymore. YouTubers taught us that.”
To stay afloat financially, Vidal decided to pivot and focus on what her audience would be more interested in right now, like easy recipes and a quarantine gift-giving guide.
Vidal is not alone in having to make drastic changes to her content in recent weeks.
Other travel influencers, like Lindsay Silberman, a travel influencer with 168,000 Instagram followers, told Business Insider she has been leaning into beauty tips, loungewear recommendations, and at-home workouts on her blog and Instagram.
Influencers have seen a recent jump in affiliate marketing sales as ecommerce surges, but it could be threatened
Some affiliate marketers have seen spikes in ecommerce sales in recent weeks as consumers spend more time at home and shop online.
“Click-to-cart is becoming really popular right now,” said Keith Bendes, brand partnerships lead at the influencer-marketing firm Linqia. “It takes the consumer directly to Walmart.com or Target.com or Amazon so the product is already in the consumer’s basket.”
But despite gains, some major retailers like Macy’s, Ralph Lauren, and Victoria’s Secret suspended or lowered commissions on affiliate programs to save on costs.
As people seek at-home workout alternatives, fitness influencers have seen a spike in engagement and in direct-to-consumer sales
Unlike fashion or travel, fitness creators have recently become an anomaly in the influencer business. These creators often focus on direct-to-consumer services, rather than relying on brand partnerships for revenue.
With an increased interest in at-home work out programs amid the pandemic, some of these fitness creators have seen an increase in sales and overall engagement online.
Expect sponsored post prices to fall and other changes to come to influencer marketing in the near term
In a recent report, Izea, a company that connects marketers with influencers, studied the impact the coronavirus pandemic could have on the influencer-marketing industry.
The report found that despite increased social-media usage, the prices paid per post on all social media may fall dramatically in the short term and continue to drop, depending on the length of the coronavirus outbreak and its overall impact.
During the last recession, the average cost of a sponsored post fell by 62.7% between 2008 and 2010, according to Izea’s data.
And as brand deals get put on hold, influencers and marketers should consider mixed-compensation models and revised structures to manage costs and improve overall return on investment, Izea said.
Read our key takeaways from the report: An influencer-marketing agency made a 68-page report on how the coronavirus could change the industry. Here are the 5 key takeaways.
Influencer marketers say engagement on sponsored and unpaid posts has soared
But even as campaigns get canceled, the ones that remain get more engagement.
As more people stay home in an effort to help contain the spread of the new coronavirus, social-media use appears to be increasing. Influencer marketers are seeing a spike in ad impressions and user engagement on sponsored posts on apps like TikTok and Instagram.
The influencer-marketing agency Obviously said it’s seen a boost in the number of “likes” on sponsored posts on Instagram.
“Everyone is home and is on TikTok actively, and everyone’s social distancing,” said Mae Karwowski, the company’s founder and CEO. “We’re just consuming so much more content.”
Many influencers are also reporting an uptick in engagement and views on unpaid social-media posts.
In a survey of 389 digital creators conducted by the marketing firm Influence Central, creators reported seeing increases in audience engagement across social media platforms like Instagram, TikTok, Facebook, Pinterest, and their personal blogs.
Read our key takeaways from the survey: A survey of 389 influencers reveals how viewer habits on Instagram, YouTube, and TikTok have changed in recent weeks
And the cancellation of live sporting events is leading to increased demand for sports-related content on platforms like YouTube and Facebook.
Tubular Labs, a leading social-video analytics firm, looked at what types of content digital creators were uploading and users were being drawn to.
Read our key takeaways from the report: A top social-video data firm made a 22-page report on how the coronavirus has changed viewer habits on YouTube and other platforms. Here are the 5 takeaways.
Live content is taking off across social media, and some influencers are cashing in
Interest in live video has spiked in recent weeks, and creators, marketers, and tech platforms are finding new ways to make money from livestreaming.
Influencers can earn hundreds – or even thousands – of dollars by promoting a product or appearing in a brand’s livestream on platforms like Instagram, Facebook, YouTube, or Twitch.
“People are more apt to spend 30, 60, or 90 minutes on an influencer or branded livestream, whereas they’re typically only engaging with a static photo on a feed for a couple seconds,” said Ellie Jenkins, an influencer-innovation manager at Mavrck. “That long-term engagement is really powerful for brands.”
Tubular Labs looked into how consumers have engaged with livestreamed videos.
The firm found that real-time news, music, gaming, and animal livestreams all saw significant growth in viewership on platforms like Twitch and YouTube.
Read our key takeaways from the report: A new 22-page report breaks down how livestream video has surged in the last month on YouTube, Twitch, and other platforms. Here are the 4 key takeaways.
Relatedly, influencers surveyed by the marketing platform Klear said they’ve been leaning into Instagram’s “Live” and “Stories” features.
“I’m definitely using Stories a lot more,” said Erica Chan Coffman, an Instagram influencer who runs the DIY website Honestly WTF. “There’s been an exponentially higher amount of Story views and likes. People are tagging me in Stories, saying ‘Look at the thing I created using the HonestlyWTF tutorial,’ and I’ll repost it.”
Read our key takeaways from the survey: A new survey of 1,021 Instagram influencers shows how the social-media platform has changed in recent weeks and what areas they’re leaning into
Brands are focusing on philanthropy and ‘feel good’ messaging for influencer-marketing campaigns
With consumers stuck at home and spending more time on social media, the brands that have continued to market on social media have seen increased engagement on their sponsored Instagram posts, according to the influencer-marketing agency Obviously.
That provides an incentive for brands that can keep buying advertising to do so – especially because it’s likely cheaper for them now. But there is still the question of how to continue marketing without risking a brand’s image.
Mediakix, an influencer-marketing agency that connects brand with influencers, recently published a report advising brands on how to use social media.
The report says companies should engage with fans in real time on social media by utilizing livestreaming services such as Instagram Live, Facebook Live, and Twitch to answer questions pertaining to changes in services.
Brands that are continuing to run marketing campaigns are treading softly in order to avoid appearing insensitive or opportunistic. Many are leaning on influencers to strike the right tone.
“Brands are being very sensitive not to be tone-deaf at this time,” said Vickie Segar, the founder of the influencer-marketing firm Village. “When you’re working with influencers, they take every product and they put it into context. Their context right now is they’re stuck at home.”
Many brands are focusing on philanthropy and “feel good” messaging in recent ad campaigns.
The backpack company JanSport recently ran an influencer-marketing campaign focused on its charitable giving to the nonprofit World Central Kitchen.
“We wanted to really connect with students who are being displaced and also try to meet the needs of those students who rely on school for both a safe place to go during the day, and also nutrition,” said Monica Rigali, the senior director of marketing at JanSport. “We just wanted to meet our consumer where they are right now. And we know they’re on TikTok probably more than they should be.”
In other categories of advertising like traditional TV commercials, brands like Toyota have been leaning into “feel good” messages of unity in place of more transactional messaging.
Influencers face backlash for living in a mask-free fantasy
California and other parts of US have seen a resurgence of coronavirus cases recently. But many influencers and celebrities living in these states are posting content on social media that makes it appear as if life has returned to normal.
For instance, Clubhouse, an influencer group based in California, traveled to Tulum, Mexico, in June to launch a new “roaming travel house” called Clubhouse Explore, and documented themselves hanging out on the beach and attending a dance club.
In the group’s YouTube posts about its trip, members are seen visiting the beach, playing volleyball in a pool, and attending a local dance club where they float between different groups of people.
“So are influencers like immune to coronavirus?” a YouTube commenter wrote on one of the vlogs.
The Clubhouse trip to Tulum represents the first major new launch in the influencer travel sector since the pandemic shut down a big chunk of the travel economy in many countries.
Health officials ask influencers to be social-distancing role models
Influencers like MTV star Tana Mongeau, music artist Jason Derulo, and TikTok creator Addison Rae Easterling have been throwing or attending parties, posting videos in groups without masks, and rarely filming themselves taking precautions to prevent the spread of the virus.
Mongeau, who has 5 million followers on YouTube and Instagram, threw a two-day birthday bash at a Beverly Hills mansion in June and documented the event on Instagram. None of the guests were seen wearing masks on Mongeau’s Instagram Stories.
But social-distancing measures like wearing masks and staying six feet apart are still recommended in most states in the US including California, where health officials are now requiring residents to wear masks in public.
“If you’re an influencer or have the ability to influence people in any space whether you’re a celebrity or on the internet – whatever your sphere of influence – please take that responsibility seriously,” said Dr. Christina Ghaly, LA County’s director of health services. “Please use that as a chance to be a role model.”