The Economist April 2nd 2022 57
BusinessThefutureofmarketingThe rise of the influencer economy
L
uxury brands used to speak in mono
logues. News about their latest collec
tions flowed one way—from the board
room, via billboards and editorial spreads
in glossy magazines, to the buyer. In the
age of social media, the buyers are talking
back. One group, in particular, is getting
through to fashion bosses: influencers.
These individuals have won large follow
ings by reviewing, advertising and occa
sionally panning an assortment of wares.
Their fame stems not from nondigital
pursuits, as was the case with the alist
stars who used to dominate the ranks of
brand ambassadors, but from savvy use of
Instagram, Snapchat or TikTok. Their posts
seem frivolous. Their business isn’t.
For consumers, influencers are at once
a walking advert and a trusted friend. For
intermediaries that sit between them and
brands, they are a hot commodity. For the
brands’ corporate owners, they are becom
ing a conduit to millennial and Genzcon
sumers, who will be responsible for 70% of
the $350bn or so in global spending onbling by 2025, according to Bain, a consul
tancy. And for regulators, they are the sub
ject of ever closer scrutiny. On March 29th
news reports surfaced that China’s pater
nalistic authorities are planning new curbs
on how much money internet users can
spend on tipping their favourite influenc
ers, how much those influencers can earn
from fans, and what they are allowed to
post. Taken together, all this makes them
impossible to ignore.
Few reliable estimates exist of the size
of the influencer industry. One in 2020from the National Bureau of Statistics in
China, where influencers gained promi
nence earlier than in the West, estimated
its contribution to the economy at $210bn,
equivalent to 1.4% of gdp. As with many
things digital, the pandemic seems to have
given it a fillip, as more people were glued
to their smartphones more of the time.
EMarketer, a firm of analysts, estimates
that 75% of American marketers will spend
money on influencers in 2022, up from
65% in 2020 (see chart on next page).
Brands’ global spending on influencers
may reach $16bn this year, more than one
in ten ad dollars spent on social media. Re
search and Markets, another analysis firm,
reckons that in 2021 the middlemen made
$10bn in revenues globally, and could be
making $85bn by 2028. The ranks of firms
offering influencerrelated services rose
by a quarter last year, to nearly 19,000.
The influencer ecosystem is challeng
ing the timehonoured tenets of luxury
brand management. Apart from being one
directional, campaigns have tended to be
standardised, unchanging and expensive.
An exclusive group of white actresses with
the right cheekbones was supposed to sig
nal consistency, as well as opulence. The
same smile from the same photograph of
the same Hollywood star would entice
passersby to purchase an item for many
years. Julia Roberts and Natalie Portman
have been the faces of Lancôme’s bestsell
ing La Vie est Belle perfume and Miss Dior,P ARIS
The business of influencing is not frivolous. It’s serious→Alsointhissection
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