By 2023, CMO budget allocation on influencer marketing will decrease by a third as consumers continue to lose trust in brands and entities they don’t personally know.
Consumer trust in large, abstract entities like “government” or “corporate America” has taken a nosedive in recent years, particularly among millennials. Influencers appear to be caught up in this trend, their downward spiral accelerated by influencers who express racist views, promote poor-quality products or misrepresent themselves. Consumers are turning instead to family, friends and local businesses to provide product advice and commercial service.
For marketers, the erosion of trust is just the latest knock against influencers. Marketing leaders already struggled to find relevant influencer partners and measure the marketing impact of those relationships. Brands in the fashion, cosmetics and gaming industries also need to manage the reputational risks that arise when influencers express views or behave in ways that are counter to the brand — a common occurrence for people whose continued relevance depends on spectacle. In response, marketers are deemphasizing influencers in their marketing strategies.
Influencer marketing is not likely to disappear entirely, however. Instead, marketers are shifting their strategies to focus on small-scale influencers with 25K or fewer followers. These influencers have more engaged audiences and they post more often, creating a personal, focused persona that mimics the experience consumers have with providers in their communities.