| In 2020 Lancôme hired an agency to create a social-media campaign for their Nigerian market. I was cast as a “nanoinfluencer”. Sporting a dress of feathers for a photoshoot in the middle of the Lagos Lagoon, my airbrushed face was all over the brand’s Instagram grid. The pay was negligible but I was too flattered and woozy with free perfume to notice.
Social-media influencers have gained prominence over the past decade and are often mocked. But while reporting this week’s story I spoke to Parisian store assistants, luxury-goods executives and bankers, and all were in agreement: it is time to take influencers seriously. They are now enduring intermediaries between customers and the world’s most valuable brands. Big consumer firms may spend $16bn directly on influencers this year, with three-quarters of American marketers participating. In 2020 China’s statisticians put the size of its influencer economy, including sales they helped generate, at $210bn, or 1.4% of GDP. The figure is almost certainly higher now. In October Lipstick King and Viya, two of China’s star influencers, helped sell goods worth $3bn in a day, more than Amazon’s average global daily gross transaction value. Outside China, the iPhone’s new privacy settings have made targeted ads through Facebook less effective. Influencers offer an alternative.
With size comes professionalism. The hours of work that go into curating social-media content are often dismissed as frivolous. But a carefully placed product can generate real buzz for brands. Influencers can win labels cool points with Gen Z, offer a bridge to uncharted markets, and create content that is snappier than that which dull corporations create on their own. As our leader points out, professionalism also means new tools to assess the value being added. The return on brands’ investment can be eye-popping. The “media impact value” of influencers’ activities, a measure compiled by Launchmetrics, a data firm, to reflect such returns, often exceeds that of established stars. Dressing Emma Chamberlain (if you haven’t heard of her, ask your younger relatives) in Louis Vuitton at the Met Gala generated more buzz ($16m-worth) than Balenciaga’s announcement of Kim Kardashian as its ambassador ($2.4m).
Even humble nanoinfluencers are more useful than you might think. (And I’m not just saying that.) They keep their followers close, earning their trust. For smaller brands, they are a chance to compete locally. For bigger ones, they are good value, not least because TikTok’s algorithm is designed to amplify their niche, highly engaging content. Of course, there are problems. Old-school luxury firms worry that ceding some control of their brand is a gamble and fear losing their image of exclusivity. Con artists abound. But as the boundary between e-commerce and entertainment blurs, the global army of influencers is here to stay. If you have any doubts about their power, just look at China. This week, in the latest instalment of its Common Prosperity campaign, which is partly aimed at reasserting state control over the digital economy, the government threatened a crackdown on the influencing business. Why? It fears that the industry has got too big for its Louboutins.
Fad or here to stay? Give us your predictions on the role of influencers at moneytalksnewsletter@economist.com. |
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