50 million and counting: Too many people want to be social media influencers

Influencers are everywhere you look these days – including America’s campaign trail. Some 200 social media stars attended the Democratic National Convention in August, where they were entertained at lavish parties and on boat trips. A few even got to chat with Kamala Harris. Donald Trump has likewise given interviews to influencer bros such as Logan Paul and Theo Von, aiming to appeal to their followers.

Politicians are not the only ones to have spotted the growing sway of social-media stars. Over the past five years, American companies have roughly tripled the amount of marketing spend they lavish annually on influencers, to $US7 billion ($10.6 billion), according to research firm eMarketer. Influencer marketing is part of every big campaign nowadays, says Mark Read, the boss of WPP, which owns advertising agencies such as Ogilvy and Mindshare. Walmart, a retail giant, has worked with TikTok stars Dixie and Charli D’Amelio. Louis Vuitton, a luxury brand, has run campaigns with Emma Chamberlain, a YouTuber.

Sisters Dixie (left) and Charli D’Amelio rank among the most followed people on TikTok.Credit: AP

Goldman Sachs bank estimates that as of last year there were more than 50 million influencers globally, from fashionistas on Instagram and comedians on TikTok to gamers on YouTube. It reckons that their ranks are swelling by between 10 per cent and 20 per cent annually. Some influencers view the work as a pastime; others aspire to make it their vocation, lured by stories of superstars making tens of thousands of dollars for a post and harnessing their legions of followers to launch brands of their own. In the United States, 57 per cent of Gen Zs would like to be a social media influencer, according to pollster Morning Consult; 53 per cent describe it as a “reputable career”.

Spoiled for choice, brands have shifted attention towards influencers creating content for narrower audiences, such as fashion tips for the over-60s, to better target those consumers. For companies, the influencer economy is more attractive than ever. Those who dream of making a living as a social media star, however, should brace for disappointment.

Influencers – or “creators”, as many prefer to be called – have become integral to shopping behaviour. According to research by Northwestern University and LTK, a platform that connects influencers with brands, nearly three-quarters of Gen Zs in the US rely on influencers to help them choose products, as do a third of boomers or older cohorts.

Meanwhile, influencers who came to fame on social media have now become models, actors and entrepreneurs. Cloudy Zakrocki, who made the move from fashion journalist to influencer almost a decade ago, says social media stars used to be happy to receive a free pair of shoes or an invitation to an exclusive event. No more. Khaby Lame, a comedian with more followers than anyone else on TikTok, has collaborated on a collection with clothing brand BOSS. Fashion influencers such as Jeanne Damas and Aimee Song have launched clothing lines. For the past few years, influencers have starred in Super Bowl ads alongside Hollywood royalty and chart-topping pop stars. The biggest now hire legions of staff to help them create eye-catching posts, while agencies and other middlemen help them land and manage brand deals.

From left: Gigi Hadid, TikTok performer Khaby Lame, Irina Shayk and German athlete Alica Schmidt at the Boss x Russell Athletic show in Milan in 2021.

Yet even as social media stars have become more famous, their relative importance in the influencer economy has dwindled. Since 2021, the share of spending on influencer marketing in America taken by creators with more than 100,000 followers has fallen from 47 per cent to 30 per cent; the share taken by those with fewer than 20,000 followers has surged from 20 per cent to 45 per cent.

Celebrity influencers are helpful for companies looking to build brand awareness or alter shoppers’ perceptions. But when it comes to persuading people to buy their products, companies are increasingly interested in influencers with a small but engaged group of followers. Marketing agencies help them manage many such contracts, sometimes using artificial intelligence to scout out influencers whose audiences best match their needs.

For companies, the ability to work with many creators to target narrow demographic groups, coupled with the growing amount of time consumers spend on social media, has made influencer marketing more attractive. In a survey by the Influencer Marketing Hub, another research group, 86 per cent of brands globally said they plan to spend on influencer marketing this year, up from 37 per cent in 2017, when the survey was first conducted. Nearly a quarter intended to spend more than 40 per cent of their marketing budget on influencer campaigns.

Yet for those hoping to make a career out of their social-media presence, the proliferation of influencers should be a cause for concern. Only 4 per cent of influencers earn $US100,000 a year or more from the work, according to Goldman Sachs. AI could worsen the situation, as “virtual influencers” begin to crowd social-media feeds: Aitana Lopez, a gamer and fitness guru with pink hair and a face so symmetrical it could only have been generated by a computer, has 330,000 followers on Instagram.

Focusing on building a small fan base in a niche area may be a way for hobbyists to make some extra cash, but it will rarely be enough to let them quit their day job. What is more, a glut of influencers makes online fame more fickle. Even if a post goes viral, it doesn’t mean an influencer’s career is set, says Joe Gagliese, co-founder of Viral Nation, a digital marketing agency. “If they’re not careful to make the most of that, there is another creator right behind them,” he says. “This industry is extremely volatile,” says Vanessa Chen, a fashion influencer better known by her Instagram handle Vivacious Honey.

There influencer boom has a further issue: consumers are growing weary of ads dressed up as entertainment. In a survey last year, the McKinsey consultancy found that 68 per cent of fashion consumers globally were unhappy with the amount of sponsored content on social media.

Influencers first took off because consumers thought of them as “people they could trust”, says McKinsey’s consumer practice lead Anita Balchandani. To remain influential they need to strike a balance between getting paid and convincing followers they are still “authentic”, one of the industry’s favourite buzzwords. Being popular, it seems, is harder than ever.

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