Market overview 2023
Influencer Marketing Expected to Grow to be Worth $21.1 Billion in 2023
Despite concerns that the impact of COVID-19 would lead to a decrease in influencer marketing, it has actually continued to gain popularity since 2020. Initially, some industries such as tourism and airlines had to make significant cuts in their operations and marketing efforts, but many others adapted their models to survive in the COVID and post-COVID world.
Even the more COVID-affected industries have since experienced a resurgence. The recent economic downturn and rising inflation have made it challenging for consumers to afford their basic necessities, let alone additional purchases. As a result, businesses are facing intense competition for the consumer's spending power. However, successful companies recognize the importance of marketing, including influencer marketing, during tough times and have increased their investment in this area, even if it means making cuts elsewhere.
Influencer marketing has seen tremendous growth in recent years, from a market size of just $1.7 billion at the time this site launched in 2016 to an estimated $16.4 billion in 2022. This trend is expected to continue, with a projected 29% increase to reach an estimated $21.1 billion in 2023.
67% of brands intend to Increase Their Influencer Marketing Spend in 2023
According to influencermarketinghub.com’s recent survey of more than 3500 marketing agencies, brands, and other relevant professionals, 67% of those respondents who budget for influencer marketing intend to increase their influencer marketing budget over the next 12 months. An additional 15% indicate that they expect to keep their budgets the same as in 2023. A further 11% stated that they were unsure how their influencer marketing budgets would change. This leaves just 7% intending to decrease their influencer marketing budgets.
These results suggest significantly increased spending on influencer marketing in 2023, following on from similar-sized boosts in 2022. The 7% planning to decrease their influencer marketing budget is double 2022's 3% figure, however, but is comparable to 2021’s results.Overall, these results provide further evidence that influencer marketing remains a successful strategy and has now become mainstream enough to be considered more than just a passing trend. Brands and marketers are still aware of the effectiveness of influencer marketing and aren't actively seeking out new marketing methods.
More Brands Now Pay Influencers Than Give Them Free Product Samples
There has been a notable change in the answers to this question over the last few years. Previously, those giving free samples outnumbered those paying cash to influencers. Last year, numbers were approximately equal. However, this year, noticeably more respondents (41.6%) stated that they pay money to influencers, compared to 29.5% who give them free products. In addition, 17.7% gave their influencers a discount on their product or services (presumably more expensive items), and a smaller 11.2% entered their influencers in a giveaway.
Although an increasing number of brands are now willing to compensate influencers for their marketing services, the figure of 41.6% still represents a relatively small portion, which is less than half of the total brands surveyed. This may reflect the fact that a significant number of companies collaborate with micro and nano-influencers who are content with receiving non-monetary compensation. It is possible that larger firms with more substantial marketing budgets are more likely to pay influencers with cash. However, this trend is gradually shifting as even nano and micro-influencers are becoming more aware of their value as brand advocates.
71%+ Measure the ROI on Their Influencer Marketing
Indeed, this year's 71% is the highest rate we have seen since the inception of influencermarketinghub.com’s survey, with the results since 2017 all falling in the range of 65-71%. It is somewhat surprising that just under 30% of firms don't measure their ROI. You would think that every firm would want to know how effective their marketing spending is. At least there is a gradual improvement in this metric, and hopefully, this trend will continue, if not accelerate.
Teenage YouTube Subscribers Say They Relate to YouTube Creators More Than Traditional Celebrities
Compared to earlier generations, Generation Z is significantly less influenced by television, resulting in reduced interest in conventional celebrities. Growing up in the internet era, the current generation seeks out their own celebrities online. As a result, the internet has become the primary platform where they discover and follow their favorite personalities.
More Influencer Collaborations Will Crop Up
Collaborations are no longer limited to brands and influencers, as apps are providing ways for influencers to engage with their followers across various accounts. With the latest app advancements, users now have the ability to partner with their preferred influencers.For instance, Instagram has introduced features that allow users to co-create posts and even contribute their own photos to other users' stories.
Increased Ad spend On Digital Media
A 2023 forecast by DENTSU estimates that the adspend within digital media will continue to increase in the coming years.
Digital adspend vs tradional media adspend
Over the past two decades, Digital’s share of spend has jumped on average 3% points each year, but it accelerated during the pandemic in 2020 and 2021 when it increased by 5% points per year as consumer desire for online content to help fill the void of live experiences led to an explosion of demand. Digital’s share of spend is forecast to increase more slowly moving forwards, at 55.3% in 2022, it is predicted to reach 57.1% in 2023 and 58.2% in 2024.