Influencer marketing is expected to increase by 19 percent to reach $16.4 billion in 2022 according to Influencer Marketing Hub’s “State of Influencer Marketing 2022” benchmark report.
Despite initial concerns that COVID would impact influencer marketing, the sector increased over both 2020 and 2021, the report found. Aside from those in the tourism and airlines industries, many brands adapted their models quickly and survived the pandemic.
The Creator Economy
Influencer Marketing Hub’s previous benchmark reports show dramatic growth in actual and estimated influencer marketing through recent years. The pandemic accelerated the industry’s growth, with the global influencer market size reaching $9.7 billion in 2020 and $13.8 billion in 2021.
Since 2019, the creator economy has grown substantially as over 50 million people consider themselves “content creators.” Influencer Marketing Hub’s latest “Creator Earnings” benchmark report found that the total creator economy market size is at least $104.2 billion, reflecting a growth trajectory on par with the gig economy.
Venture capitalists have been displaying confidence in the influencer sector as they invested over $1.3 billion in the creator economy last year alone.
Online course platform Kajabi was the most-funded company on Influencer Marketing Hub’s market map. It received $550 million in investments and was valued at $2 billion. Other notable venture capital investments in the Creator Economy in 2021 included personalized video shout-out app Cameo, newsletter platform Substack, photo-editing app VSCO and audio-editing platform Splice.
Influencer Marketing Budgets
Seventy-seven percent of Influencer Marketing Hub’s survey respondents reported they plan to dedicate a budget to influencer marketing this year—a slight increase from 2021. In 2017, that figure was just 37 percent. Those firms that have already engaged in influencer marketing will continue to do so into 2022.
Of the respondents with a budget for influencer marketing, 68 percent said they plan to increase that budget over the next 12 months while 14 percent intend on maintaining the same figure as in 2021. Sixteen percent of respondents reported being unsure of how their budgets would change and just 3 percent reported decreasing their budgets.
Roughly 66 percent of respondents said they’ll spend between 10 and 30 percent of their overall marketing budget on influencers. Most brands balance their marketing budget across an array of media to reach the greatest possible relevant audience. This year, fewer firms intend on devoting their largest share of the marketing budget towards influencer campaigns for a more balanced approach.
In addition, 28 of marketers percent plan on allocating 20 to 30 percent of their marketing budget on influencers—up from last year’s 19 percent. Nine percent intend on spending between 30 and 40 percent while just 5 percent intend on spending more than 40 percent, a substantial decrease from 2021’s figure of 11 percent. The most common percentage of marketing dedicated to influencer campaigns fell in the 10 to 20 percent range (39 percent).
The amount that firms are willing to spend on influencer marketing varies substantially given that brands of all sizes engage in the practice. Influencer Marketing Hub’s data show that 37 percent spend less than $10,000 annually; 30 percent spend between $10,000 and $50,000; 19 percent spend between $50,000 to $100,000; 10 percent spend between $100,000; and $500,000 and 4 percent spend more than $500,000.
After two years of the pandemic, Influencer Marketing Hub has witnessed a leveling out of budgeted influencer spending in 2022.
Of those brands that work with influencers, 54 percent operate ecommerce stores—a small but notable increase over last year’s figure of 50 percent, said the report.
Last year, just as many brands paid influencers as those that gave away free product samples (34.4 percent), an increase from previous years when brands giving free products far outnumbered those paying cash. Twenty-five percent offered influencers a discount on products or services while less than 6 percent entered their influencer partners in a giveaway.
Given that roughly one-third of brands are willing to pay influencers for their services, Influencer Marketing Hub notes it’s likely that most of these firms work with micro- and nano-influencers, which are more willing to receive payment in kind rather than cash. The firms that pay cash are presumably much larger than those that don’t.
Forty-nine percent of payments to influencers are made at a flat rate as 42 percent structure payments like an affiliate marketing plan where they pay a percentage of any sales made as a result of the influencer marketing.
Interestingly, of the brands that work with influencers, just 70 percent keep track of the return on investment (ROI) and 71 percent keep track of sales.
One finding that hasn’t changed much is that 82.3 percent of firms take their influencer marketing spending from their overall marketing budgets. The other 17.7 percent take their influencer marketing spending from their public relations department’s funds. According to Influencer Marketing Hub, the firms in the latter group may use influencer marketing to spread awareness rather than to sell products or services.
Criteria For Utilizing Influencers
Overall, a brand’s relationship with its audience remains the most-valuable element when partnering with influencers, according to 51 percent of survey respondents. Twenty-four percent of respondents report that user-generated content (UGC) is their primary focus—down from 2021’s figure of 34 percent—while 14 percent name content distribution as the primary objective. This last element is important for promoting strong audience relationships as influencers use their audience to distribute content relating to a particular brand.
This year’s report saw a new suggestion from respondents, namely attribution and tracking. Six percent of respondents considered this the most valuable criterion when partnering with influencers, pointing to the trend of the growing importance of influencers as sales-generating assets.
In terms of frequency, 70 percent would rather their influencer marketing be campaign-based. Brands find that influencers they’ve used for previous campaigns are more genuine, the report also revealed. Seventy-two percent of influencer marketing relationships are campaign-based while 28 percent are “always on.”
These findings point to the possibility that more brands are entering and testing the industry before cementing long-term commitments to influencers. Another explanation may be that companies are running multiple campaigns and selecting a preferred portion of influencers for each campaign. It remains to be seen whether the nature of the brand-influencer dynamic will change in any substantial way in the future.
Influencer Engagement On Social Media
In line with what Influencer Marketing Hub has been witnessing since it began tracking influencer marketing, influencer engagement on Instagram fell in 2021. This is to be expected as it becomes more and more difficult for popular influencers to engage with every comment and message they get from followers. Additionally, many users follow popular influencers passively to view images and Stories rather than engage actively, according to Influencer Marketing Hub.
The drop in engagement has been particularly apparent for medium and large accounts while engagement is better than it was in 2019 for nano- and micro-influencers.
Engagement on TikTok is high for all tiers of influencers compared to other social networks, especially for large influencers. Still, TikTok saw a relatively small drop in engagement for organic posts over recent years.
Breaking the general rule of social media engagement, large influencers on TikTok have the highest engagement rate as small influencers have the lowest. This may be due to an algorithm that intelligently targets the videos of its most popular influencers into users’ “For You” feeds.
As for YouTube, larger channels are seeing higher engagement than smaller ones. Those with 100,000 to 1 million followers have the highest engagement rate with the portion of those boasting over 1 million followers not trailing far behind.
Influencer fraud on Instagram remains a major challenge even despite its decrease in recent years. Since 2019, there have been a number of platforms and tools that detect influencer fraud, causing the portion of influencer accounts impacted by fraud to fall below 50 percent, found the report.
In many cases, the influencers themselves are the victims of influencer fraud. For this report, Influencer Marketing Hub defined ”influencers impacted by fraud” as those with over 1,000 followers with growth anomalies or inauthentic engagement. On average, roughly 49 percent of influencers worldwide are affected by fraud.
Influencer Marketing Hub’s findings are based on a survey it conducted among 2,000 respondents. Brands accounted for 39 percent, marketing agency workers, 31 percent, and PR agencies, 3 percent. The remaining 27 percent represents a range of occupations and sectors.