Too many people want to be social-media influencers | Mint

Ask a young person what they would like to do with their life and increasingly often the answer will be to find fame and fortune online. Fully 57% of Gen Zs in America would like to be a social-media influencer, according to Morning Consult, a pollster; 53% describe it as a “reputable career choice”. Those dreams may be understandable: examples abound of social-media superstars, from fashionistas and comedians to gamers, making tens of thousands of dollars for a post promoting the wares of some brand. As consumers spend more of their lives on social media, the amount of money companies are paying influencers is rocketing.

Yet as the industry has grown, it has also changed. Spoiled for choice, companies have shifted their attention towards influencers creating content for narrower audiences, such as fashion tips for the over 60s or gardening advice for inner-city dwellers, to better target those consumers. Cultivating a small fan base in a niche area may earn hobbyists some extra cash, but it will rarely be enough for them to quit their day job. Those who fantasise about making a living as a social-media star may thus be heading for disappointment.

Companies have been increasing the share of their marketing budgets they hand over to influencers. Over the past five years, American firms have roughly tripled their spending on influencer marketing, to $7bn, according to eMarketer, a research firm. In a survey by the Influencer Marketing Hub, another research group, 86% of brands globally said they plan to spend on influencer marketing this year, up from 37% in 2017, when the survey was first conducted. Nearly a quarter intend to spend over 40% of their marketing budget on influencer campaigns.

Companies realise that influencers—or “creators”, as many prefer to be called—have become integral to how consumers shop. According to research by Northwestern University and LTK, a platform that connects influencers with brands, nearly three-quarters of Gen Zs in America have relied on influencers to help them choose products to buy. More surprisingly, so have a third of consumers who are boomers or older.

Influencers are part of every big campaign nowadays, says Mark Read, the boss of WPP, which owns advertising agencies such as Ogilvy and Mindshare. Walmart, a giant American retailer, has worked with TikTok stars Charli and Dixie D’Amelio. BOSS, a fancy clothing brand, has collaborated with Khaby Lame, a comedian with more followers than anyone else on TikTok. Louis Vuitton, a luxury stalwart, has run campaigns with Emma Chamberlain, a YouTuber. For the past few years influencers have even starred in Super Bowl ads alongside Hollywood royalty and chart-topping pop stars. The biggest influencers now hire legions of staff to help them create eye-catching posts, while agencies and other middlemen help them land and manage brand deals.

Such stories have lured a growing number of people to try their hand at being an influencer. Goldman Sachs, a bank, estimates that as of last year there were more than 50m influencers globally, and reckons their ranks are swelling by between 10% and 20% annually.

The surging supply of influencers has been a boon for companies that use them to sell their products. Celebrity influencers may be helpful for building awareness of a brand or altering how it is perceived by shoppers, but when it comes to persuading people to buy something, marketers look to the long tail of creators with small but engaged groups of followers.

Since 2021 the share of spending on influencer marketing in America taken by creators with more than 1m followers has fallen from 15% to 8%; the share taken by those with fewer than 20,000 followers has surged from 20% to 45%. Marketing agencies help companies manage contracts with many such influencers, sometimes using artificial intelligence (AI) to scout out those whose audiences best match their needs.

For those hoping to make a career out of their social-media presence, however, the proliferation of social-media influencers should be a cause for concern. Only 4% of creators earn $100,000 a year or more from the work, according to Goldman Sachs. AI could worsen the situation, as “virtual influencers” begin to crowd social-media feeds: Aitana López, a gamer and fitness guru with pink hair and a face so symmetrical it could only have been generated by a computer, has 330,000 followers on Instagram.

The glut of influencers is also making online fame yet more fickle. Even if a post goes viral, that doesn’t mean an influencer’s career is set, says Joe Gagliese, co-founder of Viral Nation, a marketing agency. “If they’re not careful to make the most of that, there is another creator right behind them,” he says. “This industry is extremely volatile,” points out Vanessa Chen, a fashion influencer better known by her Instagram name Vivacious Honey. To diversify her income, she recently launched her own clothing line. Many others have done something similar.

There is another problem with the flood of influencers online: consumers are growing weary of all those ads dressed up as entertainment. In a survey last year McKinsey, a consultancy, found that 68% of fashion consumers globally were unhappy with the amount of sponsored content on social media.

Influencers first took off because consumers thought of them as “people they could trust”, says Anita Balchandani of McKinsey. To remain influential they need to strike a balance between getting paid and convincing followers they are still “authentic”, one of the industry’s favourite buzzwords. Being popular, it seems, is harder than ever.

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