By Lubna Hamdan
A global recession has forced brands to tighten or cut their influencer marketing spend, but this might be the cleanse the industry so desperately needs
There might be a bright side to Covid-19 after all: the end of social media influencers.
In 2018, global spending on influencer marketing on Instagram (which accounts for 90% of all influencer campaigns) reached $5.67 billion, while the industry itself was estimated to grow to a staggering $9.7bn in 2020, according to Influencer Marketing Hub.
Influencers, left and right, were living the high life; first class travel tickets, private jets, 5-star hotels, fine dining restaurants, supercars and luxury designer brands - you name it, influencers claimed it - and probably for free. They almost couldn’t believe their luck, and maybe it was too good to be true. Because after coronavirus, I doubt the market will be half of what it was worth in 2019.
The most popular topics for sponsored posts on social media are fashion and beauty, followed by travel and lifestyle, all of which have been hit hard by the Covid-19 pandemic.
Retailers in Europe alone are expected to lose as much as £3.26bn due to disruptions caused by the virus, and that’s just between March and April 2020. While a 52% uptick in weekly average revenue growth rate in US e-commerce in Jan-Feb gave businesses a glimpse of hope as consumers moved to online shopping, according to Quantum Metric, the majority of retailers surveyed by Digital Commerce 360 believe the demand will decline or flatten, as consumer budgets tighten or disappear.
It’s not better news for travel influencers, who can kiss first class tickets goodbye as the Gulf’s aviation industry braces for a $7bn financial hit and loss of up to nearly 347,000 jobs due to the coronavirus, the International Air Transport Association (IATA) announced in March.
As if the numbers aren’t discouraging enough, it seems that some influencers are masters of self-destruction. And when you’re in the spotlight, you’re only one selfie (or Instagram story) away from disaster.
Two weeks ago, I cringed as I watched a beauty influencer reveal to her 1.9 million followers that she had miraculously found the cure for coronavirus.
“Guys, drink water,” she said ever so confidently, "because if the virus enters your lungs, it’s very dangerous, but if you drink water then it will go down to your stomach, which has ‘things' that remove the virus.”
In case you’re wondering what those “things” are, I'm trying to figure it out, too.
Another influencer specialising in fitness was arrested this month in Dubai for encouraging residents to violate government measures to stay home.
“Do whatever you want to do, no matter what’s out there,” she said in a video to her 43,000 followers. “If you want to leave the house, go for a walk or go for a run, just do it,” she insisted.
Her Instagram bio even reads, “Changing lives one run at a time.” She’s right; follow her advice and one run can indeed change your life, but not necessarily in the way you want it to i.e. contracting a potentially fatal respiratory disease. Fortunately, shortly after her comments were posted, Reebok MENA, who had worked with her on a campaign, released a statement saying they are cutting ties with the influencer.
But even if it weren’t for her unfortunate rant, she may have become irrelevant to the brand anyway. With the global economy having already entered into a recession which is expected to be worse than the 2009 financial crisis, according to IMF chief Kristalina Georgieva, brands are tightening budgets and cutting costs.
“From what we’ve seen, the initial round of budget cuts from brands has focused heavily on influencer campaigns, either as total cancellations or postponing activity to the end of the year,” according to Jamal Al Mawed, founder and managing director of boutique PR and influencer engagement agency Gambit Communications.
"A lot of brands do still see influencer marketing as a luxury rather than a necessity and in times of crisis they prefer to ‘go back to basics.’ Another factor is that from a marketing standpoint, influencers are dynamic content platforms, so they cannot fulfil their role as effectively when they are quarantined at home.
"For example we work with a lot of hospitality and automotive brands, both of which are in industries that rely on personal experiences/reviews in their influencer marketing, and that’s not possible in a quarantine situation,” he says.
Al Mawed says there’s also a common perception among brands that influencers should only be used for marketing during happy times, because they "represent an aspirational lifestyle which might not be appropriate in the middle of a pandemic”.
A PR professional in Dubai who works with fashion influencers in the region - and who agreed to speak to us on condition of anonymity - says many influencers are still “flaunting their luxury goods and lavish lifestyles to hundreds of their followers, fake or not. I believe the industry as a whole is at a crossroads where brands are reassessing their strategies, investments and indeed 'public figures' associations. I think very few influencers will be able to survive this,” she says.
One influencer’s desperate attempt at surviving has been to approach restaurants for free food in return for posts, having recently contacted a popular restaurant in Dubai with the idea. Little did he know that the same restaurant had sent half of its employees back to their home countries because it has had to shut down its dine-in branch to adhere to government measures to curb the spread of the virus, and rely on delivery companies (which take a 30% commission fee) in order to survive. The restaurant refused, understandably.
But this isn’t to say that it’s all doom and gloom for influencers. With people stuck at home in quarantine and self-isolation, they are spending more time online, with media consumption expected to rise up to 60%, according to recent research from Nielsen’s US team.
This means influencers have the chance to prove they are more than their ad campaigns. Platforms WhatsApp, Facebook and Instagram have seen more than a 40% increase in usage since the earlier days of the outbreak, with the biggest rise in the 18 to 34-year-old demographic, according to a survey by consulting firm Kantar that spoke to 25,000 consumers in 30 markets.
"While brands recognize that more people are consuming content on social media, than ever before and thus, the value of using influencers, they are also taking time to evaluate the situation and determine the correct course of action,” according to Zaib Shadani, founder and managing director at Shadani Consulting.
"However, until brands are ready to start their campaigns, influencers will need pivot and offer creative content that engages and deepen their connection with followers. We can already see this happening with the shift in messaging, where influencers are now trying to stay engaged and relevant by offering ‘at home’ advice, including cooking tips, parenting advice, and indoor entertainment ideas,” she says.
Gambit’s Al Mawed agrees, pointing out that we are in a "unique situation where our daily screen time on smartphones has increased dramatically, so there is a bigger spotlight on influencers as purveyors of entertainment.
"There is also a surge in interest in homebound activities like cooking, home workouts, reading, consuming popular shows/movies, cleaning/disinfecting, laundry, gardening, online shopping, so if marketers utilize influencers correctly there is still a lot of opportunity to promote products sensibly and sensitively,” he says.
This could mean good news for influencers after all, as the ones with nothing to offer will be washed away and forced to rethink their skill set beyond taking photos and posing with products, while the truly talented ones, who are more suitably referred to as content creators, will finally get the recognition they deserve, and perhaps break the influencer stigma for good.
One video creator making a difference is American-English Max Stanton, otherwise known as Max of Arabia, whose years living in the Arab world led him to learn and speak various Arabic dialects fluently, before documenting his experiences in the Gulf and attracting over 680,000 followers as a result. Since the spread of the virus in the UAE, he has used his platform to hit back at those who are breaking safety rules.
“Your selfishness is directly and deliberately putting all of our lives at risk,” he said in a video, "If it was in my hands, I would throw every single person who is disobeying the laws in jail to wait for the restrictions to be lifted. And when it’s over I’d charge them for the stay and fine them."
The YouTuber even lashed out at the beauty influencer claiming water is the cure for the virus, stating that she should “stick to beauty and refrain from giving medical advice” if she is not a medical professional. Stanton also introduced a ‘highlights’ section in his profile dedicated to supporting local businesses where he reposts their products and services for free.
So while most influencers were cast under one negative stereotype and classified as ’talentless’ freeloaders, the Covid-19 crisis will, ironically, give their industry the cleanse it so desperately needs.For all the latest Media news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.