Influencers have taken a hit as a result of coronavirus, but there may be new revenue streams for the content creators
Social media influencers have been given their first lesson in economics. Over the past few weeks, they've quickly learnt that in a global recession, their main revenue stream is among the first to go. In the business world's battle against Covid-19, advertising and marketing budgets are in the frontline.
"Has my income gone down dramatically during this [pandemic]? Yes," Max Stanton, otherwise known as Max of Arabia, tells us.
"It’s been really slow in terms of work... " says DJ and fashion blogger Tala Samman, "My emails are usually busy. Now they're not busy at all".
Indeed, brands whose social media feeds were once packed with high production influencer campaigns have now settled for subtle 'stay at home' messages urging consumers to follow government safety measures.
While Covid-19 restrictions in Dubai have been eased this week and restaurants and shopping malls are gradually reopening, they are limited to a 30 percent capacity and strict social distancing rules. Some restaurants have told Arabian Business off the record that they are better off remaining closed as a 30 percent clientele base wouldn't cover half of their rent.
With a rising number of coronavirus cases - the number now stands at 10,839 in the UAE, including 541 new cases reported on Tuesday - the fight is far from over, and for businesses cutting salaries and laying off staff, influencer collaborations are at the very bottom of their priority list.
While the closure of physical stores has led brands to shift online, Hind Seddiqi, chief marketing and communications officer at Seddiqi Holding, says influencers are mainly used for promotional purposes, but cannot be relied on for "real sales" in financially challenging times.
She says: "Whilst [influencers] have previously been used to promote and announce product launches, they were not always relied upon to convert sales. Given the unprecedented situation we find ourselves in today, businesses require real sales to keep themselves afloat.
"Whilst it’s evident that brands do not want to sever ties with influencers, and certainly value them as promoters who can reach the right audiences, it’s clear that they cannot rely on them in silo as an avenue that’s critical for sales and the business' overall success.”
Samman, who started her blog My Fash Diary 11 years ago in Dubai, isn’t currently working on campaigns but says tech companies like streaming platforms and e-commerce websites have approached her for opportunities.
"I’ve gotten a few proposals in the past week. A few of the MAF [Majid Al Futtaim] brands are working on projects where a phone brand is working with a few influencers on creating home workouts, so there is that middle ground. The tech companies and e-commerce sites are still doing things. The two streaming sites, who I’ve never worked with before, are pouring their marketing budget into this time. I guess it's also relevancy, where e-commerce sites realise people are spending their time at home and have time to shop online," she says.
American-English Stanton, who is nicknamed 'Max of Arabia' for having perfected Arabic dialect, says that while he's working on several campaigns with brands, he's currently living off of his savings as companies take months to pay influencers their fees, with some waiting up to eight months to issue payments.
"Even if you’re doing a campaign now… considering the current situation, no one is paying on time. I’ve decreased my spending as has everybody. I'm still doing some campaigns so I’m grateful for that," he says.
Tracy Harmoush, an investment banker-turned-fitness influencer, says her campaigns have also been placed on hold, but that new brands have approached her for collaborations.
“They [brands] want me to do a[n Instagram] Live on their page and push their product. It's a twist to how I used to work," she says, adding that some sectors have profited off of the pandemic.
"It depends on the industry, really. If you’re talking about F&B, they’re spending a lot; entertainment is not spending at all. It depends on which brands got hit and which brands have unfortunately benefitted like delivery or pharmaceuticals… even the supermarket apps are doing very well, like delivery app Talabat," she says, having recently partnered with them on a campaign.
Talabat's senior marketing manager Josiane Assaad says influencers help "humanise" a brand and bring about new perspective.
“For us influencers are not just another marketing channel. We tend to have long lasting relationships with many of them which is strengthened by having them as loyal Talabat users before we work with them as influencers. Influencers bring word of mouth and in many cases, a new perspective to the brand with their creative and engaging content," she says.
Harmoush points out that fast-moving consumer goods (FMCG) companies typically allocate high marketing budgets, and that influencers may be their cheapest option during Covid-19, as more consumers remain at home.
"Paying influencers is your cheapest form of marketing. It's a budget but if you’re talking about Knorr or Philadelphia, they have massive budgets spent on big productions for Ramadan campaigns that they’re not using now. So if their only source of getting to people right now is through influencers, they’ll be contacting them.
"They go for more mass [audiences] and pay them a quarter of the budget. All these guys have a lot of budgets. They might not go to 50 influencers, but they will pick the one influencer that has 1 or 2 million followers so they can target their audience. I’ve seen it happening. [Influencers] are telling me they’re surprised they’re seeing big budgets come through," says Harmoush, who has nearly 230,000 followers on her Instagram account.
Amanda Fox-Pryke, public relations Manager for Volkswagen Middle East, says by email that auto influencers speak "authentically to a particular audience or demographic".
She says: “For example, via established auto influencers who we know strike a chord with followers looking for more niche motoring content, but also via individuals who don’t necessarily have a huge digital footprint but are influential within their own communities"
Despite Volkswagen’s operating profit dropping by a whopping 81 percent in the first quarter of this year due to coronavirus-related challenges, it has launched a campaign called #JourneyOfHope which engages with influencers to support in "spreading positive messages and in turn inviting people to share their own, personal anecdotes about what they’re grateful for during these exceptional times".
’Not the time for ads'
But Stanton says campaigns can quickly go wrong during such challenging times, as consumers are more sensitive to content, adding that he's turned down campaigns he felt are inappropriate.
"Some people have no sense of timing... People need to stop being tone deaf. It’s not the time to push ads. If you’re going to push something then make it something that will help people... Nobody cares about your diet pills at a time when someone is struggling to have food. And when I say that, I mean people who weren’t struggling before," he says.
"This is how I pay my bills, so obviously I don’t want to not be making money. There’s nobody who, given the choice, would choose not to make money. This is fair across all content creators, influencers, bloggers. I don’t have an issue with that. I have an issue with people who - I’m not going to say take advantage - but try and sell things: 'Oh guys, I put together this special corona[virus] basket, go and buy it.’ I know you’re laughing but it has been done," he tells us.
Since the start of the outbreak, Stanton has supported small businesses by posting their advertisements for free on his Instagram page.
"Would I be happy trying to profit over a small business if they’re struggling to pay rent or salaries? Absolutely not," he says. "We have a responsibility, because of the size of our audiences, to help people in whatever way we can... Anybody that’s a content creator or influencer owes it to the world to use that - if you want to call it power - for good.”
Part of that responsibility is being equipped to communicate messages to large audiences, according to Stanton, who worked at American consumer goods giant Procter & Gamble for four years before leaving to focus on social media.
"Everybody’s coming from a different background. I came from a corporate background where I know the value of a brand so I’m possibly set up differently than many people who are doing content creation and haven’t finished university - not that there’s anything wrong with that, but they don’t have any type of formal education on branding and communication. I'd say they’re unequipped to communicate to a bigger audience. They have a responsibility that they’re possibly not up to," he says.
Stanton adds that while he supports a career in social media, he's against a complete dependence on it, and urges influencers to plan for a life after social media.
"I’m all for people being content creators if they want to be but always have something as a backup. Everybody asked me, 'Max what happens when Instagram dies?' I’ll cross that bridge when it comes to that but I have a formal education and experience in the biggest and best companies for marketing. I can handle myself. But some people put all their eggs in one basket," he says.
Get a job before you get a following
Harmoush, who also comes from a corporate background, agrees that it's "not very intelligent" to depend on influencing.
"For influencers, it’s not smart to put all your eggs in one basket. You have to find several sources or income... Leveraging on everything you can possibly leverage on is the only way to sustain this," she says, adding that leaving the corporate world for an entrepreneurial or social career is a risky move she wouldn’t necessarily advocate.
She describes her own move as being "hell at first," having started out with no financial projections and losing her savings as a result.
"I’m not an advocate to leaving corporate - that’s the most ridiculous statement to say: 'leave your corporate job and do your own thing’. It's a very risky thing and if you don’t have the discipline for it, it won’t work.I always said that if what I’m doing now doesn’t work, I will go back and find something in corporate, because I need to sustain myself," she says.
Harmoush admits having been "very much on the corporate girl side" when it came to her views on influencers.
"There are a lot of eyeball moments on this thing called social media... I would look at that career [influencing] and say, that’s not a job, what’s happening to the world? I had a 9am-7pm job, I worked really hard... [But] being an investment banker and finishing at 9pm, I had no time for anything besides my job. No time for the gym, no time to socialise. When I shifted, I never wanted to become an influencer. I wanted to build a business. People liked my progression, and my numbers would grow," she says of her rise in social media.
Samman wasn't planning on a career in social media either. The London College of Fashion graduate wanted to become a stylist, and had worked at P&G and then at Condé Nast as a fashion editor, before realising she could make more money off of her blog.
"I started my blog for fun during my first year of university and thought nothing of it really, because no one knew what a blog was, it just got traction, my traffic went up, and the site would crash from having too many people reading it at once. It took me on this wave, I didn’t know where I was going," she says.
People follow people
Despite marketing budgets being scrapped amidst Covid-19 challenges, Samman isn't worried about the future. She says brands will become "more picky and selective" moving forward, but they'll still need influencers to promote products on social media, and DJs for events.
Harmoush agrees: "The only thing that’s changed is that not everyone can pay influencers because everyone is afraid, but this isn’t a forever change. Whether it’s 3 or 6 months from now, there will be an influx of people wanting to go on adventure and the budgets will have to come out. If budgets are withheld now, they will then be allocated to big events," she says.
The same can be said for personal trainers, according to Harmoush, who has continued to see demand for one-on-one sessions on her Instagram page.
"People follow people. You don’t follow a workout. You follow people. There are loads of fitness apps and online classes but why does one person relate to another versus a brand? A person has a stronger connection than a brand because they’re linked to a face, an emotion," she says, adding that while she'll be charging less for online classes.
"I have live training programs every day and I still get private messages every day of mainly women saying I specifically have this problem, I want a program for this. A lot of people may not be able to correct their form, that’s why people pay AED500 for someone as opposed to going to a mass class. I don’t think that's changed. It’s just moved to online," she says.
Both Harmoush and Stanton are also in the business of hosting travel adventure retreats, with Stanton having launched Yalla Travel with Fatima Deryan, the first Lebanese woman to scale Mount Everest. So far, the duo have conducted breast cancer awareness campaigns through hikes and hosted trips to Mount Kilimanjaro and Yemeni island Socotra.
Stanton hopes Covid-19 will change the way people travel in that they’ll want to do less shopping in cities and more nature exploring after having spent weeks indoors and months unable to fly. Ironically, as passenger flights are grounded until July, both him and Harmoush may find opportunities in local travel around the Emirates. And with restrictions easing in the UAE, Samman may also see a wave of events where companies look to re-engage with consumers.
So for those who haven’t depended solely on influencing for revenue, there seems to be life after - and with or without - social media. As for those with a complete dependency on the world of influencing, they may want to take a course in economics, or hurry and apply for a job.