Marketing Briefing: Saturation and cost concerns push brands to concentrate influencer spend on fewer creators

So, does that mean brands are abandoning the use of micro and nano influencers? Not for the moment, according to industry experts, who told Digiday that while micro influencers (around the 10,000-50,000 follower mark) and nano influencers (less than 10,000) are still viable solutions for marketers, economic factors have led some clients to favor larger accounts.

In particular, they say rising management costs for creator campaigns, price inflation and the sheer number of people now working as creators, are each exerting pressure.

For Mae Karwowski, it’s a consequence of shifting supply and demand dynamics. The chief executive of WPP-owned influencer shop Obviously told Digiday that the larger pool of creators willing to work with brands means that solo creators who’d experienced earlier phases of the influencer sector’s growth might lose out.

Imogen Coles, U.K. influence lead and managing partner at Ogilvy, agreed: “They are probably feeling that they’re getting less work because we have more choice to pull from.”

But overall? “The pie is getting significantly bigger,” Karwowski said. She noted that her agency’s clients, which include Colgate-Palmolive, Danone and Dell, increased their influencer budgets by 50-100% in the last year, though she did not name them as examples — or other specific clients.

The agency advises clients to use micro, nano and mid-level influencers for driving sales conversions, while the reach of larger creators means they’re useful for increasing brand awareness — but crucially, mixed together. “Typically, we’re utilizing a lot of the pyramid at one time,” she said.

“You should always be using your macro and your micro talent alongside each other,” said Coles.

“We’re seeing more and more being spent with macro, but we’re also seeing more and more being spent with micro, nano and mid-tier too,” Karwowski added. “[Clients] are spending more with macro influencers, and we’ve had to scale up the side of our team that deals primarily with macro talent. But it’s not zero sum. It’s not taking away from the micro work.”

There are other factors at work, though. According to some agency experts, rates for micro-influencers rose from $250-$500 in 2022 to between $500-$1000 per post in 2023.

Not only are they more expensive to book, as the sector has matured, so has the amount of time required to get creator activity right. Coles said that the need to vet creators before working with them is leading some marketers to prefer bigger names.

“When we’re working with smaller creators, we need to be vetting them to the same depth [as larger ones],” she said. “It’s important to us that when we work with somebody, even just for one Instagram post with someone who has 10,000 followers, we need to make sure that the brand aligns with them politically.”

Campaign reporting, now a typical feature of influencer activity, has added another burden, according to Marta Prosperi, influencer marketing and strategy director at We Are Social. “You have to prove engagement. You have to prove that actually [are] giving something back to the business,” she said.

The more creators involved, the more time agencies and marketers have to spend on vetting and campaign reporting. 

Coles added that marketing clients that are new to working with influencers — without naming a specific client — often don’t accept the logic that smaller creators can reach more engaged, niche audiences. “It’s an issue that we get pushback on quite a lot,” she said.

Together with the increased time required to work with smaller creators, skeptical clients have begun to “push back” more on agency recommendations to consider smaller creators, she said.

3 Questions with Jennifer English, global brand director at Johnnie Walker, a whisky brand

Johnnie Walker’s maintained its ‘Keep Walking’ brand campaign for the last 25 years. How has its media approach changed in that time?

When the campaign launched [in 1999], a huge proportion of our spend went on TV and out-of-home. Whereas today, though television still has a big role to play, social and digital obviously play much bigger role. That’s transformed our media model because consumers also consume that media in a different way — shorter bitesize versus long brand storytelling on TV. That’s the big thing.

Have the commercial goals behind ‘Keep Walking’ changed since it launched? And is it still as important for Johnnie Walker to develop its brand, when it’s the category leader?

The commercial goals in 1999 were probably the same as today. This was already a 100-year-old company looking to make sure it was current and meaningful and differentiated for the future. As a company [Diageo] led by brands, whose value rests on its brands… brand-building as a driver of success is non-debatable. It’s not simply about the frequency with which you [the consumer] see the work that drives commercial success… the commitment to excellence and creativity is also an important driver of commercial success.

One of the goals of ‘Keep Walking’ is to recruit consumers to the Scotch category. Younger consumers are less likely to drink alcohol than they were when the campaign debuted. How does Johnnie Walker navigate that cultural shift?

Moderation and premiumization are connected. There’s a long term premiumization trend in the drinks category that goes hand-in-hand with the moderation trend. The youngest drop of whisky in a bottle of Black Label was made 12 years ago. That’s a long time to leave your product unsaleable; very few businesses do that. So when we bring that to the consumer, they need to appreciate the taste, quality and value of the product in order to feel like it’s worth paying for. They’re highly correlated. Consumers are drinking less, but drinking better.

By the numbers

There’s no question that the AI hype cycle has hit an inflection point, infiltrating everything from search ads to social media. Now, AI is becoming more prominent in the creator economy, according to The Influencer Marketing Factory agency’s latest creator guide. Find key details from the report below:

• 74.1%: The percentage  of creators eager to integrate AI into their content.
• 33.4%: The proportion that say ChatGPT is their AI tool of choice
• Benefits include enhanced creativity (16.5%) and better content quality (14.6%) — Kimeko McCoy

Quote of the week

“Concerns around AI black box models appear to be quieter, but they are nowhere near resolved. Advertisers using platforms with these models may have compromised on transparency in favor of audience reach, but the demand for clarity and accountability is still strong. I think black box models are unlikely to be sustainable in the long term.”

— Josh Rosen, president of agency Hotspex Media, who’s skeptical tech companies’ AI ad tools will catch on without more transparency for clients.

What we’ve covered

• It’s not just AI ad tools that marketers are wary of, but AI-powered search.
• Lego is the latest major advertiser to begin in-housing its media buying operation.
• Meanwhile, another weight on the scale for brand versus performance. Airbnb’s latest campaign sees it continue its swing toward long-termist, brand-first marketing.