Tue, Dec 8, 2020
Are Social Media Influencers Worth the Risk?
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Devotion to our digital devices has skyrocketed during the coronavirus lockdown and has supercharged an already booming part of the marketing industry.
In less than a decade, the influencer profession has leapt from a standing start to what is expected to be a $15 billion global industry by 2022.1
Now, more than a fifth (22%) of brand and marketing managers at fast moving consumer goods (FMCG) companies around the world spend between $1.1 million (mn)-$5 mn on influencers, whose strong online presence is harnessed by brands to amplify sales of their products.
By 2021, nearly half of marketers at FMCG companies (46%) expect to spend 31%- 50% of their total marketing budget on influencers–up more than 20% compared to the average spent between 2018-2020–while nearly one in 10 will spend over 70%.
The use of influencers can be highly rewarding, but it can be exceptionally risky too. Over four-fifths (85%) of FMCG companies have had their brand negatively impacted due to an association with an influencer, with a quarter (24%) of these companies claiming to have been adversely affected multiple times. Furthermore, 70% of respondents have doubted the number of followers an influencer claimed to have.
To understand more about influencer marketing in 2020 and beyond, Duff & Phelps and Kroll, a division of Duff & Phelps, surveyed over 900 marketing and brand managers within the FMCG market to find out about the specific products they are responsible for and the influencer marketing trends they are seeing. FMCG companies surveyed included those in cosmetics, food and beverage, clothing and consumer electronics.
The respondents were from the U.S., UK, Ireland, Spain, Netherlands, France, Italy, Germany and the United Arab Emirates (UAE).
Key Highlights Include
- Eighty-five percent of FMCG companies have had a negative influencer experience, and almost a quarter of respondents reported losses between $100,000-$250,000 resulting from an incident
- By 2021, nearly half of marketers at FMCG companies will spend 31%-50% of their marketing budget on social media influencers
- Almost a third of respondents (32%) said their most successful influencer campaign increased sales by $250,000-$500,000
Download the report to view the full results.
1.Business Insider Intelligence ‘Influencer Marketing’ report: https://www.businessinsider.com/influencer-marketing-report?r=US&IR=T
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