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How 2020 Is Changing the Influencer

how-2020-is-changing-the-influencer

It is too simple to say that 2020 has been difficult to navigate. This year has been chaotic, grief-stricken, and extraordinary in its capacity to force us to adjust to a “new normal.” Buyers adapted their habits, found solace in self-care, spent more time on social media scrolling through the idealized lifestyles shown through the feeds of influencers, and learned to cope. For influencers, and their work as brand partners and glamorized versions of our everyday selves, they have seen a sharp decline in the value of their content as people moved indoors and grappled with the loss that the COVID-19 pandemic has wrought on the world. Influencers learned to pivot in the face of such change. 

To add to this, in the earliest summer days, the world was forced to address the other, historical pandemic of anti-Black racism and police brutality. In North America, conversations around justice eclipsed the conversations about COVID-19. Thousands gathered to show their support with protests not just in the United States but around the world. Influencers faced once again a learning curve on how to navigate messaging amidst a politically-charged climate on social media, loss of income, and challenges with diversity and inequality in their own industry.

How brands market to their audience by way of influencer marketing is experiencing a huge shift that will have an impact felt throughout this next decade. Here, we will:

  • Take you through how influencers adapted in 2020
  • Prepare you with the information of this year as an example and argument for future work with influencers and content creators
  • Help you decide when it’s appropriate to use an influencer, and how that will change in this next decade

How influencer marketing began

The path of the modern influencer begins as characters in advertising. Before brands sought multimillion dollar endorsement deals with celebrities and athletes—a sort of third phase in the development of this marketing strategy—companies used characters to get buyers to sympathize with them and, in turn, their products. This is why Santa Claus was so popular for Coca Cola and Tony the Tiger for Kellogg’s cereals.

Santa Clause holding a bottle of Coca Cola
Image via Coca Cola

Not long after came a second wave of advertising using well-known personalities through celebrity endorsements as a way for buyers to connect the dots between brand, trust, and recommendations by public figures. Celebrities and athletes, while still extremely popular today, now have to compete with the rise of “ordinary” personalities, i.e. the influencer. Influencers are character-like because they still perform the role of someone in an ad on social media but they are, and very well could be, your neighbors but with hundreds of thousands of followers online.

Influencer marketing has become so important to so many brands, namely in the fashion and lifestyle industries, but also in food and electronic goods too, as buyer behaviors have evolved. Buyers, once relying heavily on advertising and then consumer reviews, have adapted their habits to base purchases on reviews and endorsements from relatable, reliable, and trustworthy sources by way of the influencer. Seeing an influencer in one’s feed seems more reliable to a consumer because they have curated their feeds to reflect, or even depict in ambition, the life they have. Still, they have to abide by some rules to ensure consumers are not being misled: in 2017, the Federal Trade Commission in the U.S. released a set of guidelines for social media influencers avoid to ambiguity “#thanks, #collab, #sp, #spon, or #ambassador.

Today, influencer marketing is worth a reported $10 billion dollars with every social platform bringing in influencers at some point. New York Magazine reports that as the demand for influencers has gone up with more brands tapping into this marketing strategy, so too have the costs of an influencer. WIRED reports that in 2016 an endorsement from a top-tier influencer would cost somewhere between $5,000 to $10,000 but now some brands are expected to pay well over $100,000 for the same placement. According to Business Insider, the numbers break down this way for brands’ preferred platforms in partnership with influencers: 79% of brands tap Instagram for influencer campaigns, while 46% will do so on Facebook, 36% use YouTube, 24% use Twitter, and 12% use LinkedIn. 

Scaling down for big impact with microinfluencers 

While some brands partner with content creators with an established audience, others seek out “microinfluencers”: social media personalities with smaller followers counts, some even as low as a few thousand. Their content is often around a particular niche or passion or community: health and beauty, fitness, business, travel, as a few examples. What’s remarkable about the use of microinfluencers is that they can have an engagement rate of nearly 60% versus that of a celebrity doing something similar.

Not only are microinfluencers more cost-effective for brands, but also using them gives a brand a slight edge in credibility and authority because their chosen representative is more likely to be authentic and representative of the audience they are trying to capture as buyers. What is aspirational for a microinfluencer is not simply in the realm of what is flashy, but it’s portraying a lifestyle that looks very much like their followers.

Microinfluencers are appealing for brands because they have a much more “human” approach and interaction that is built to last. And that is a key idea to remember for the use of influencers from here on out as they have seen, because of the COVID-19, there has been an uptick in demand for influencers to look more like the people that they are, rather than businesses themselves. 

COVID-19 changed everything

Before the COVID-19 pandemic, experts predicted the influencer marketing industry to balloon to an estimated $15 billion industry by 2022. Today, that prediction may fall short because influencers have gone through the ringer adapting to a new normal. In recent months, brands slashed their ad spending and affiliate marketing budgets, dropped sponsored content deals, payment links, and stopped product deliveries to their influencers. Running parallel to these shifts, brands are trying to cope with supply chain interruptions and closures. 

In that time, too, the COVID-19 pandemic cost some influencers around 33% of their potential earnings, amounting to approximately $3100 a week. In a study published by Attain earlier this summer, 500 Instagram influencers in the United Kingdom began etching out a startling portrait of life for content creators: Around 65% of influencers noted their income began to drop by March 12, and those with less than 100,000 followers felt the impact of that the most, according to a report on the research in Women’s Wear Daily.

Like the rest of the Western world, influencers have settled indoors for months on end. And that has forced some traditionally glamorized or aspirational feeds to feel and become way more authentic. Some brands are still paying their influencers for placement, but how that content is styled, photographed, and then consumed, remains largely in the home. VICE reports on this influencer shift, “In the meantime, with so much wealth sucked out of the market, so much luxury sucked out of their lives, even the most privileged influencers in the world have slipped closer, if only slightly, to what they once were: people, just like the rest of us.”

And just like its audience, influencers will need to continue to adapt. Across several industries, workers are adjusting to working at home, while others are slowly going back to their workplaces. For the influencer, whose primary job is to be online, to experience the world for us to consume, and perhaps model our own lives after, their flexibility to these new dynamics is key. For brands concerned with customer retention and maintaining relevance, authenticity, sensitivity, and predicting the world post-pandemic will help, according to Forbes. That means prepping and arming influencers with the strategies to succeed with their campaigns. 

Influencers sharing their ideologies

According to the 2020 Online Shopping Trend Report from Relatable Trends, a positive side effect of influencer marketing is that a brand is not just influencing their audience of potential customers, but other influencers as well. The report goes on to say that influencers will primarily look to their peers—micro to big-time influencers—for inspiration and information about products, style, how to build an audience, and shopping. 

Before the pandemic, this research was relevant in a moment that wasn’t as politically charged. Since June’s wave of protests against anti-Black racism and police brutality across America—and those happening even still in Portland, OR, New York City, Chicago, and other states—influencers have had to make quick shifts in showing their awareness and social justice activism.

In early June, there was a fumbled rollout of Black Out Tuesday. Initially, this day acted as a way for the music industry to pause their business to show support for the protests but it snowballed into a social media-wide black out. Non-brands and ordinary people began posting black squares and misusing #blacklivesmatter, drowning out vital voices and resources for those on the ground, working with protesters. Influencers, of course, took part as well. Some posted the black square but soon, once word had begun to spread that it was causing disruption among the movement, began to take those posts down, and instead share resources and educate their followers on these crucial issues and topics

The urgency of these issues may be out of the main newscycle but it hasn’t stopped some influencers from using their position to bolster Black-owned businesses, and Black Lives Matter at large, posting historical facts alongside current issues to understand the context of the movement. This approach is similar to—if slightly more accessible for potential buyers—to Brother Vellies founder Aurora James’ 15% pledge initiative, which calls on retailers to dedicate 15% of their shelf-space to products made by Black-owned businesses

Influencers and many buyers are also calling on the industry to diversify not simply their content but the influencers used in campaigns. It seems like every industry is admitting to, through loud calls from Black, Indigenous and people of color (BIPOC) communities, a lack of representation. Approximately 69% of Gen Z and millennials say it’s positive for brands to feature diverse models in an ad, according to research from Ypulse.

Conspiracy theories and influencers

There is also a whole subsection of influencers who share conspiracy theories and wholeheartedly believe this is the avenue to pursue on their platforms. Earlier in the spring, a video filled with falsehoods about the COVID-19 pandemic called “Plandemic” made the rounds online. Many influencers, initially uninformed about the enormity and severity of this video, shared it freely, unchecked

As many influencers move toward showing their “authentic” selves, for monetization or not, there comes a risk that any brands associated with that influencer may unintentionally be linked to false or misleading news. Kim Cohen, a prominent influencer in the fashion and apparel space, saved stories to her Instagram highlights ranging fromGeorge Floyd still being alive, Britney Spears trying to escape from a deep state cabal and that she was subjected to mind control experiments, and that an artisanal doughnut shop in Portland is part of a human trafficking ring. 

These theories are primarily pushed by organizations like QAnon, mostly known for Pizzagate

One way influencers are juggling their ardent beliefs in these theories, while being mindful of their brand associations, is using the Instagram Stories function. These posts expire after 24 hours. But they are inherently there for audiences to see, and for brands to be unwittingly associated with. 

That same influencer, Kim Cohen, even set up a QAnon Patreon with a subscription fee, which is a new way that many influencers are trying to supplement their dwindling income. Influencers using Patreon isn’t exactly new but there has been an enormous increase to the service recently as a way for influencers to supplement income. Patreon has reportedly welcomed 70,000 influencers to the platform since March with a 20% increase in fans paying for that content for the first time. For lifestyle influencers like Cohen, who is not alone in her support of QAnon, what is at risk here is the spreading, and then monetizing of information and theories that have not been verified.

This is the other reality of influencers displaying their authentic selves online: Before, brands could reasonably drop an influencer for views they aren’t aligned with in totality. Now those influencers, with an audience of potentially like-minded people, can move to Patreon to supplement their income. 

New ways influencers are making money

Conspiracy theory-led Patreons aren’t the only way that influencers are trying to find new ways for income.

The infamous influencer and writer Caroline Calloway announced last summer that she was going to offer exclusive content to her “close friends” list on Instagram for a small fee. Calloway said of the move that: “What I do provides value and I should be compensated for that service, just like anyone else. A stranger is not entitled to consume what I make, just as I am not entitled to reap the benefits of whatever job they are employed at.”

Instagram recently rolled out settings for influencers to get paid directly on the platform for the first time through ads on IGTV, digital badges through Instagram Live that followers can buy (ranging in price from $0.99 to $4.99) and product sales through Instagram Shopping. Some brands, like Sephora, Ikea, and Puma, tested ads with partners in IGTV videos next with 55% of the ad revenue going to the influencer or creator. 

The paywall approach or direct monetary relationship with Instagram with respect to monetized content comes at the suggestion that influencers are evolving past the need for brand partnerships for money and visibility. It is a threat to brands who have relied on these partnerships to bring in new buyers, new influencers, and broaden that ecosystem of brand relevance and loyalty. 

It isn’t all bad news though, should an influencer begin charging for content. Krishna Subramanian, CEO of influencer marketing and branded content firm Captiv8 told Vogue Business that it could be a benefit for brands, developing stronger and deeper ties, and producing higher quality content. “It will enable influencers to avoid having ‘one night stands’ with brands and rather focus on creating long-term ambassadorships with brands that are truly authentic to their lifestyle.” 

What this means for brands exploring or reassessing their relationship with influencers is that, much like the employees they hire at their own companies as reflections of the value of the brand, influencers may be more inclined to remain loyal to a few brands versus many.

That exclusivity is almost a closed loop in the history of endorsements. Traditionally, athletes, for example, are tied to single, long-term deals with big name brands like Nike or Adidas. Breaking that to work with competitors can lead to messy legal deals, as of course could be the case for influencers, but it’s an interesting evolutionary track that instead of being part of many campaigns for many brands, some influencers are being much more selective with their platform and energy. 

That said, there is still a remarkable difference in how influencers are paid depending on their follower count and their potential return on investment for a brand. There have been arguments for the regulation of influencers when it comes to payment because of the marked difference. Often, influencers who are Black or people of color, make far less than their white counterparts. 

Which is why in some cases, in both the U.S. and the U.K., influencers have started to form a collective and bargain for their rights. Unionizing is a fairly new concept for creators in our modern era, though guilds for craftspeople and artists existed for centuries in varying iterations.

Today, unions represent a way to protect some of the most vulnerable, yet necessary, creative thinkers and content makers from being exploited or misused. 

In the U.K., a group of fashion Instagrammers have formed the first union for influencers in response to discriminatory practices that include wage disparity and to address a lack of diversity in campaigns. Additionally, the union would help protect formal contracts and safeguards to ensure fair content usage. In the U.S., 12 influencers formed the American Influencer Council for similar reasons. The goal of forming unions is for more transparency, the elimination of exploitive practices, and to make pay rates opaque and fair across the board for a huge group that is set to continuously drive billions of dollars of revenue as time goes on.

Takeaways for the future and beyond

Influencers are not going to go away anytime soon. They’ve managed to shift in remarkable fashion during COVID-19 lockdown—but why to use an influencer and how is going to change considerably over this next decade. 

In 2020, we’ve seen influencers:

  • Lose profit and partnerships because of COVD-19
  • Quickly pivot to new means of making income via Instagram, paywalls, and Patreons
  • Humanized approach to content, swapping out glamorized, aspirational posts for cozy, relatable ones 
  • Loudly join the calls for action against anti-Black racism and police brutality 
  • Make their ideologies and political support well-known
  • Unionize 

All of these shifts are remarkable in their own right but even more so considering how quickly they have come to fruition. While these moves have been in response to COVID-19 or cultural shifts, these have an air of lasting beyond a single moment.

This article originally appeared in the Shopify Plus blog and has been published here with permission.

About the author

Steve Hutt

Steve has entrepreneurship in his DNA. In the early days of online commerce, he achieved Power Seller status at eBay, which then propelled him to become a founding partner of VisionPros.com, a contact lens, and eyewear retailer. After a successful exit from his startup, he embarked on his next journey into agency work in e-commerce and digital strategy.

Currently, Steve is part of the Merchant Success Team at Shopify Plus, where he is a Strategic Advisor helping brands continue to grow and scale with the Shopify Commerce Platform.

To maintain a competitive edge and life of learning mantra, Steve also hosts and produces a top-rated weekly podcast show, eCommerce Fastlane, where he interviews Shopify partners and subject matter experts who share the latest marketing strategy, tactics, platforms, and must-have apps, to help Shopify brands build and scale lifetime customer loyalty.