Influencer Marketing Decline: Is This the End of Social Media Influencers?

For the past dozen years or so, the advertising industry has been pushing the value and effectiveness of social media influencers hard. There’s been some pretty solid logic backing those recommendations up too. Influencer product pitches and endorsements, everything from unboxing to live demos, have helped businesses in many verticals see significant improvements from brand affinity to sales. But are times changing? Recent data, driven largely by Gen Z and younger millennials, shows new attitudes toward influencer authenticity, dwindling engagement rates, and increases in private micro-communities. In this edition of Plain Talk, we’ll look at what these changes may mean to how you balance the social media plan in your marketing mix and when it still makes sense to work with influencers.

We’ll look at:

• The latest stats on social media influencers
• Changes to the influencer “ecosystem”
• How to optimize your social plan with these changes in mind
• How you can get expert insights into influencer marketing decline

The Latest Influencer Statistics

Recently, we’ve been following some pretty surprising trends in the influencer space. Here’s a little math salad:

• Nearly 25% of all people on social media consider themselves “influencers” or “content creators.” That’s 1 in 4 people. Let that sink in.
• Average engagement rates for influencers have dropped significantly or flatlined over the past four years. TikTok, still the engagement king, saw influencer engagement rates drop 35% last year (to 2.65%), while Insta is hovering for a second year at .7%, Facebook at .15%, and Twitter (still struggling to call it X) at a whopping 0.05%.
• Meanwhile the US has seen some robust growth in private chat platforms like WhatsApp and Telegram and Snapchat who has exceeded 400 million daily active users.

So, what does it all mean? First, we have to look at the possible impact on effective spending. Think of engagement rates like other digital KPIs like CTR or CPC or CPA. All of these KPIs look at engagement with paid content (ads) and the lower the engagement, the higher the cost per acquisition. Period. No matter what online channel you look at, this is a fact and paid influencer engagement is not immune. So, brands have increased how much they spend on influencer marketing, but lower average influencer engagement is causing inflation of average CPAs across the US. Why?

One possibility is that the explosive growth in the number of influencers and content creators has diluted engagement rates. Something like “more influencers divided by the same engagements equals lower engagement rates as a percentage.” That math sounds pretty logical.

Other contributions to influencer marketing decline

Another possible factor is that Gen Z and millennial social users are getting at least some of their needs served in private communities and less traditional channels—places like Subreddits, Discord, private Facebook groups, or the growing number of private chat group app accounts like those on WhatsApp or Snapchat. We know intuitively that this is happening, but the degree to which it contributes to lower influencer engagement rates is unclear.

Finally, another possible contributor relates to YouTube—the number two site on the web for daily traffic—saw a global decrease of 200 million average monthly users so far in 2024. This coincided with high-pressure sales tactics aimed at eliminating the use of ad blockers and driving these users to premium. Additionally, 2023 saw the introduction of 30-second unskippable ads. We suspect it’s possible that the removal of ad blockers and the addition of unskippable 30s, leading to a more disrupted experience on YouTube, may be decreasing video completions for content creators and influencers as users bounce early. So, should we just give up on influencers?

Changes in the Influencer “Ecosystem”

While we will continue to follow these trends, it’s too early to throw in the towel on influencers yet because they still create an impact for key brands. In fact, in one form or another, influencers have been around since the beginning of advertising. First, as celebrity endorsements in print, radio, and TV, then added to that were things like product placement, then pre-social media cultural partnerships like Absolut Vodka and artists like Andy Warhol, Keith Haring, and others. Then came experiential influencers like the PBR bike messengers who “supported the brand that supported their scene.” Now, we have social media influencers. The current trends are likely just an evolution of how influencers and content creators are seen in the marketing world by some very marketing-savvy prospects.

The rise of authenticity

One evolution noted in a recent study from Hootsuite predicts that “authenticity,” the hallmark of great social influencer content so far, will need to be rethought. For a long time, consumers demanded authenticity from their influencers. This meant that their dedication or fandom for a product should be as authentic as the experience in their feed. But according to Hootsuite, today’s social fans just want an entertaining experience that is “authentic” to the brand not necessarily the creator. In some ways this could be good news for advertisers as the relationship becomes more transparently commercial. This may mean brands and influencers can concentrate on “authentically” moving product without being overly concerned about the brand relationship with the endorser. This is pretty much how paid endorsement works already. This evolution also pairs well with vastly improved technologies that allow programmatic buying of sponsored influencer posts on platforms like Upfluence.

HOw to Optimize Your Brand’s Social Plan

Just because the influencer landscape is changing, it doesn’t mean social media is “dead.” Far from it. When considering influencers as part of your plan:

Check your category

While average engagement rates for influencers and creators are down, some categories are doing just fine. On TikTok, the education category still has a solid engagement rate of 4.9%, beverages 3%, and hotels and accommodation 3%. Meanwhile, category engagement in things like sports and outdoors has tanked HARD. Knowing how your category audience interacts with influencers is more critical now.

Know the “who”

Of course, there are some individual influencers in every category who deliver engagement reliably even when your category may not typically perform well. If people are not engaging, then it does not really matter much how many followers people have. They just aren’t really influencers in a way that is meaningful to your brand. Think of engagement like other digital KPIs. Would you pay a premium for an ad channel with a .07% CTR? Probably not if you like your job. Don’t just look at the number of followers. Look at the most recent content and how much engagement they typically get from those followers.

Remember what we said about authenticity?

The data shows that old-school authenticity is fading as an expectation among Gen Z and younger millennials, but it can’t hurt. A good “authentic” match between an influencer and a product creates what psychologists call “congruence.” Our lizard brains love congruence even when we are not conscious of it. So, while you can treat sponsored posts like paid endorsement (borrowed equity from a celebrity), a sponsorship that really fits will always be more effective at winning hearts and minds.

Refocus your social media efforts

Of course, social media is a lot more than influencers so under these changing circumstances your plan may benefit from refocusing some effort against other things social does well.

• Create videos. Yes, even with YouTube’s recent missteps, Americans still love video. Now is a great time to ramp up the production of entertaining explainer and brand experience videos to “infotain” your audience on YouTube, TikTok, and Reels.
• Check your playbook. Revisit your social media “playbook” to make sure that your target will think your social voice, design standards, and content pillars are legitimately true to your products and brand. Consumers are telling us that THIS is the authenticity they care about. If you are not sure if you are there yet, test it.
• Consider social commerce. Influencers are not the only ones who can move product on social. If your category works for social commerce, ensure your plan includes a well-conceived experience to move units.
• Make your posts count. Post often enough to get on your target’s radar, but make every post count. Consider things like SEO value, commerce opportunities, etc. Every post should be part of a greater social strategy.

Social media is media

We think it’s really important to remember that social media performs a media role as part of the greater “paid, earned, shared, owned” universe. That means you can’t always be married to one channel doing a specific job for your brand. Adjusting to the times and evolution of the channel means looking holistically at your media strategy to make sure another media channel does not accomplish one of your goals better. Remember that .07% engagement rate we mentioned earlier? You may have more effective options for that media dollar.

Get Expert Insights on Influencer Marketing Decline

We think one of the things that makes marketing so exciting is that it’s always changing, so you have to stay on your toes to keep up. If you think you’d benefit from a chat about the latest changes to social media and influencer marketing decline, give us a call at (502) 499-4209 or drop us a note here, and we’ll get right back to you.