Small Brands Expect Their Influencer Marketing Budget To Grow 20 Percent Or More Next Year

As marketers brace for a new year and with it, a new set of challenges amid the third COVID-19 wave, influencer marketing and social commerce will be at the forefront of strategies to reach consumers who crave genuine brand interactions.

To better understand how small businesses are preparing for this richer influencer ecosystem, Social Media Week and Open Influence surveyed 108 global marketers from organizations with 2020 annual influencer marketing budgets ranging from $1,000 to $10,000 and $10,000 to $50,000.

“The State of Small Business Influencer Marketing: 2021” reveals important insights and trends for marketers around influencer campaign frequency, pain points, spending patterns and the effectiveness of influencer marketing.

First up, a majority of respondents reported that they do influencer marketing in-house, likely to save costs. Nevertheless, as they look ahead, 15 percent of respondents anticipate their budgets increasing by 20 percent or more in 2021. On the other hand, a majority expect their influencer marketing budget will stay the same or modestly increase in the new year.

The majority (68 percent) of small businesses are averaging 10 or less influencer marketing campaigns per year, while 19 percent are launching 6-10. A smaller amount of marketers, 12 percent, are delivering 11-20 influencer campaigns. But that frequency is expected to grow, with 20 percent of those who were originally doing one to five campaigns reporting that they’ll increase frequency to six or more in 2021.

While organic influencer content is effective for spreading brand values, incorporating a paid approach enables marketers to leverage an influencer’s likeness and target the exact audience they want to reach on the right channel, at the right time. Hence why 64 percent of respondents said that they included paid social in their influencer marketing efforts this year. When partnering with influencers to create paid ads, marketers should encourage them to develop content that communicates a clear call-to-action.

Marketers have long considered influencer marketing most effective for building brand awareness (36 percent) and communicating brand purpose (37 percent). But with the rise of social commerce on platforms like TikTok and Instagram, influencer marketing will start emphasizing more on bottom funnel results.

Instagram remains the go-to platform for running influencer campaigns, followed by Facebook in second. Interestingly, 15 percent of respondents chose TikTok as their third most-used platform for influencer marketing, compared to 22 percent for YouTube.

When asked how they measure the success of influencer marketing campaigns, most cited engagement (48 percent), followed by conversions (44 percent).

More than half (69 percent) of respondents consider it “important” or “very important” to have more diversity within their influencer base in the new year—just a one percent increase from 2019.

The rise of influencers and social commerce presents new opportunities for brands to reach online shoppers who rely on influencer recommendations. Still, a lack of regulation and standardized measurement have contributed to marketers’ reluctance to invest in influencers. Fortunately, the Association of National Advertisers (ANA) recently convened the Influencer Marketing Advisory Board to formalize influencer marketing measurement and help marketers maximize their investments.

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