Influencer Marketing Budget Predictions for 2023
U.S. Influencer marketing spend is expected to surpass 6 billion for the first time. Yes, you read that correctly- the influencer marketing industry will be well over a 6 billion dollar beast this year! Although this is the most money spent to run influencer marketing campaigns, it is only a 23.4% increase- a smaller increase than last year (27.8%). Despite a slightly smaller percentage increase, there are no signs of the industry slowing down. This 6 billion dollars includes the payments that companies will make directly to the influencers, not complimentary products, trips, or services.
Image showing the increase in US Influencer Marketing Spend from 2019-2024
Over the years, objectives for influencer marketing have generally remained consistent- raise brand awareness and reach new audiences to increase sales conversions for the brands paying for this type of advertising. The Social Shepard reports that 93% of marketers polled have used influencer marketing in their strategy. That is a serious metric- that means most marketing and advertising plans are written with some element of influencer marketing involved. This is a strategy that can no longer be ignored. Suppose you’ve been working on your 2023 marketing strategy, and it doesn’t include an influencer marketing component. You may want to rethink that before we finish the first quarter, especially if your primary audience is millennials or gen z. Believe us, we understand that this may not have been on your radar. One of our employees who just graduated from university in 2019 told us she only had ONE of her professors talk about influencer marketing. It wasn’t an essential part of most of her projects in which she wrote mock marketing campaigns for brands. Just 4 years ago, they were still focusing on teaching the next generation of marketers print, video, and social media text posts! Like you may be, our recent graduate is amazed at how much her industry has changed in just 4 short years.
While social media only used to be A PART of marketing strategy- it is now at the forefront of most marketing and advertising plans. A crucial part of influencer marketing is that consumers trust the people they follow- or else they wouldn’t be following them. While celebrities still make up a large part of the segment, more and more people are beginning to lose trust in even their favorite celebrities because of how out of touch the elite is in our current social climate. The Digital Marketing Institute reports that 49% of consumers actually depend on recommendations from influencers they follow. This statistic, which is interesting in and of itself, also points out another critical metric- consumers know they’re being influenced by influencers and don’t mind. At the beginning of influencers gaining popularity, people often didn’t think they were being advertised to, which was problematic; now, it’s common and ethical - as it’s industry standard - to disclose when a product or service being recommended is sponsored. Millennials and gen z accept influencer marketing with open arms. This might also be attributed to the fact that younger generations like supporting small and local businesses just as much as more prominent brands- influencer marketing is an excellent way that younger people can be exposed to brands they want to support.
Now that we have reviewed the growth that influencer marketing is expected to see this year let’s talk TRENDS! Trends are something that comes and goes like the wind. With the way social media is growing, micro-trends pop up and fall off before marketers can even get a grip on them at times. This is why we here at The Social Strategy believe the most significant trend of the year is going to be not following trends. More and more among social media consumers, people are not only accepting, but CELEBRATING individuality, being weird, and most importantly, being yourself. What this means for your business is that you get to make content, employ influencers, and create products and services that feel like you. We believe this wholeheartedly, but we know “be yourself” is a lofty, intangible goal, so we will review three trends you can actually integrate into your marketing plan for this year.
Video Content
Video content is an essential part of a marketing strategy because it is an engaging, visually stimulating medium that can help capture the attention of potential customers. Video content is also easily shareable and can reach a wider audience than other forms of content. In terms of growth, we expect to see an increase in the use of video content in the marketing world in 2023. This is because more companies will be creating video content to boost their digital presence and increase their customer engagement and loyalty. Additionally, with the increase in online video consumption, companies will be looking to create more video content tailored to their target audience to maximize their results. Influencers will also make a ton of video content- more than just posting pictures of products is needed. People want to see it in action and hear what people say about it before purchasing it.
Live Shopping
The Live Shopping feature on Instagram allows businesses and creators to showcase products in live videos and sell them directly to viewers in real time. This feature has been growing in popularity since its launch in 2020, and we expect it to continue to grow significantly in the coming years. By 2023, Live Shopping will likely become an even more integral part of the Instagram experience, making it easier for businesses and creators to connect with their audience and drive sales.
Ongoing Partnerships
On-going partnerships between brands and influencers are growing in popularity in 2023 because they create an authentic and genuine connection between them. Consumers are drawn to this type of relationship because it allows them to better understand the influencer and brand. It creates trust between the two, which makes the consumer more likely to purchase from the brand or follow the influencer. Additionally, ongoing partnerships allow brands to build a more significant presence on social media and engage with their target demographic more meaningfully. This type of relationship provides more value to the consumer than a one-time partnership, making it a popular choice for brands and influencers.
In 2023, you may also hear or see the phrase CIO and wonder… is that a typo?! It's not! Many companies are now creating a new position to handle influencer relations and brand campaigns- a Chief Influence Officer. A Chief Influence Officer (CIO) is a senior executive overseeing an organization's influencer marketing. The CIO's primary role is to ensure the successful execution of influencer marketing campaigns and the effective use of influencer resources. The CIO is responsible for developing strategies to maximize the impact of influencer marketing and managing the relationships between influencers and the organization. They also help to identify new and innovative strategies for influencer engagement, ensuring that campaigns remain relevant and effective. This position may have existed in some organizations before the rise of influencer marketing, but it would have been primarily focused on cultivating relationships with key influencers and stakeholders, such as customers, partners, government officials, media outlets, industry experts, and other organizations.
You may wonder, though, all this growth sounds so amazing, but with threats and whispers of a recession this year- what will this mean for influencer marketing? It is difficult to say definitively whether the possible 2023 recession will have an effect on influencer marketing trends this year. However, the economic downturn will likely impact the marketing industry in general. This could lead to changes in how influencer marketing is approached and the strategies used to reach target audiences. Influencers must stay up-to-date on the latest trends and adjust their strategy accordingly.
Additionally, influencers should consider diversifying their strategies to ensure that their content still reaches their desired audiences. A possible recession means that people will be more intentional with where their money is spent. People may become less frivolous with their spending. Here at The Social Strategy, we see one clear way for businesses to stay focused as economic uncertainty remains in the shadows- be proud of the product and service you're offering. If people need to become more intentional about what they spend their money on, ensure that what you're offering them is of the highest quality.
No one can say for sure what 2023 will bring! That is the beautiful part of life; we never know what will happen next, even when we make our most educated guesses. No one knows for sure where the economy will head in the coming months. As business owners, we must stay focused on what we can control. One thing we know for sure is that influencer marketing isn't going anywhere. It will continue to grow this year. Influencer marketing has quickly stolen the spotlight from some more conservative marketing approaches, and that is because of the undeniable ROI it offers the brands that employ it. What variables will you be focusing on this year? Will you be including influencer marketing in your advertising strategy? Let us know! We want to hear from you.
If you’re wanting to learn more about trends to watch, here is a great article from our friends at Later, 15 Influencer Marketing Trends to Watch in 2023.
If you’re wanting to learn how to integrate influencers into your marketing strategy, reach out to us! We can explain how influencers can make a difference in YOUR business specifically! Contact us here.