Companies across the tech and media sectors are battening down the hatches as they fear a looming economic slowdown.
Media brands like Cameo, Food52, and Outside are shedding employees in bulk. Snapchat-maker Snap Inc. issued a profit warning last month that dragged down advertising and social-media stocks. And May was the worst month for startup layoffs since the start of the coronavirus pandemic, employment tracker site Layoffs.FYI reported.
But the downward trend hasn't hit influencer marketers yet thanks in part to the runaway growth of TikTok and short-form video, according to five agencies and platforms that focus on creator advertising.
Several told Insider they're still hiring at a rapid clip to meet advertiser demand. Total spend on influencer campaigns has remained steady or grown in recent months as the number of brands hiring creators has grown, the marketers said. Many of these campaigns are test budgets as opposed to the larger spend commitments given to more mature ad categories in social.
"We're seeing year-to-date positive trends relative to the previous year," Lyle Stevens, CEO of the influencer-marketing platform Mavrck, told Insider.
The number of influencers being hired for promotions at Mavrck has grown 19% over the past five months compared to the previous five months, and the number of posts per campaign has risen 16% during the same time frame. Payments to creators are also up 24% on average over the same period, Stevens said.
The current trends are in stark contrast to the start of the pandemic. "All of those metrics plummeted, went off a cliff," Stevens said. "Campaigns were getting paused and spend was getting pulled back."
Industry execs told Insider that TikTok and its Instagram competitor Reels are helping to prop up the influencer marketing business in a volatile economy.
Brian Freeman, CEO of the influencer-marketing platform Heartbeat, said that 85% of the marketing initiatives at the company now include creators from TikTok, compared to just 15% two years ago.
"We're seeing a major uptick in interest around TikTok," Freeman told Insider. "The viral nature of TikTok is leading to reduced costs for acquiring customers and making budgets associated with influencer marketing much more efficient than what they can get on other channels."
TikTok's platform is becoming more popular among brands
The number of TikTok influencer campaigns completed on Mavrck's platform between January and May 2022 grew 44% when compared to the same time period in 2021. Campaigns completed on Instagram's Reels jumped 31% year-over-year. For comparison, YouTube campaigns rose just 13%, while Instagram Stories posts were flat and in-feed promotions dropped 10% year-over-year.
"We're definitely seeing a shift towards short-term video continue," Stevens said.
Advertisers like Kraft Heinz and American Eagle are dedicating more of their marketing budgets to TikTok as a way to target Gen Z, and they're finding success when they partner with creators to help them navigate the platform.
Salad chain Sweetgreen is another brand investing heavily in TikTok as it sets out to be the top fast-food restaurant for the health-conscious Gen Z generation. Sweetgreen cofounder and chief brand officer Nathaniel Ru said the company's recent "Create Your Own" ad on TikTok featuring NBA star Devin Booker, which was directed by food content creator Owen Han, drove the highest click-through-rates of any of its campaigns with a rate of 24% from users aged 13 to 17.
Ru said Sweetgreen has found that leaning on creators with big followings who know the platform works best on TikTok.
"It's important to note that engagement with creators is growing, not slowing down," Rob Horler, CEO of influencer-marketing firm Whalar, told Insider. "TikTok, for example, continues to expand its audience and engagement levels at a furious rate. That alone will pull significant ad dollars into the creator economy regardless of the wider economic environment."
