Amid fears of a recession, marketing budgets — often the first to see cuts — are shrinking, particularly for creatives, with companies like Pinterest, Patreon and influencer marketing startup Grin announcing the latest layoffs. Recent numbers show nearly half of US brands are cutting spending amid inflation, a global supply chain crisis and broader economic volatility. According to the World Federation of Advertisers (WFA), nearly 30% of major advertisers plan to cut their advertising budgets in 2023, with 74% saying the economic downturn is affecting their 2023 budget.
As a result, many creatives are bracing themselves for an uncertain 2023 as brands and advertisers look for areas where they can cut their budgets, leaving them less budget space for things like influencer marketing.
Emma Nacewicz (@emmanacewicz) is a full-time creator. She said she’s already starting to feel the effects of the economic slowdown, with fewer brands turning to her for branded deals, particularly during the normally busy holiday season.
“The holiday season for us is a time when we make a lot of money, and I’ve personally had fewer brand deals — along with a lot of my friends who are also in this space,” she said. “I usually start preparing and hearing about holiday campaigns in October, but this year I didn’t start putting something on paper until November and December, so I think brands are holding back and being conscious of their budgets.”
Influencing has been Addison Davis’ main source of income for about a year. Davis (@addy_kate), a full-time student at the University of Georgia, relies on branding contracts to pay her bills.
“It’s not an ideal situation, especially since that’s how I pay for most things in my life,” she said. “These budget cuts can impact my life as a creator just like any other employee.”
The power of the fulcrum
Nacewicz, who has done campaigns for Jazzercise and Midol, said that as a content creator she has learned to turn around and she is ready to do it again amid the current economic climate by honing her audience engagement strategy.
“I’m used to spinning and having multiple streams of income,” she said. “So I make sure I continue to add value to my audience and build a strong content and affiliate strategy.”
Davis, who has more than 100,000 followers on Instagram, said she also plans to fine-tune her strategy as ad spending is expected to slow. Global adspend growth is expected to slow nearly 6% in 2023 as sweeping layoffs hit big media brands like Disney, Comcast, Paramount and Warner Bros and the ads business sheds 2,500 jobs in November.
To withstand the impact of these cuts, Davis plans to focus on expanding her audience and increasing her reach so she can diversify the types of brands she works with.
“I want to start being even more active on social media so I can make the most of the platform I’ve been given,” she said. “I see this as an opportunity to excel in the social media world so I can continue to generate revenue for myself and work with brands across the country and even the world.”
Remain flexible in the unknown
Davis’ mother Amy manages her and her three sisters, who started out as YouTubers in 2018 and are now all influencers. She helped her clients navigate previously turbulent times, including the COVID pandemic. She said the biggest takeaway was the importance of staying flexible.
“During these times of uncertainty, I found that the more innovative and adaptable we became, the more opportunities there were,” she said.
As the industry goes through its first recession, creators are in a good position to weather the storm as brands seek to make the most of every dollar spent, using creator influence to reach their target audience without Spending big bucks on celebrity endorsements or spending hours developing complex marketing strategies that don’t convert.
Davis said she sees firsthand how influencers become major assets during a downturn thanks to their affordability and loyal audience eager to buy the things they recommend. In fact, it’s historically proven that reallocating marketing spend to budget-friendly and purpose-driven channels is the best way to stay successful during a recession.
“We haven’t seen a cyclical downturn in brand deals. In fact, we’ve seen more interest and business on that front,” Davis said. “In my observation, the most innovative companies are shifting their marketing budgets toward influencers and away from higher-impact marketing tools like mailers, pop-up ads, and billboards. The rise of streaming vehicles has significantly reduced TV advertising, which has also led to an increase in online advertising.”
Though Nacewicz is seeing a drop in demand, she said she still understands the value she brings to brands, especially when the economy is struggling, and continues to hope for a strong 2023.
“Influencer marketing is effective and affordable for many brands,” Nacewicz said. “They can spend a fraction of the cost – as opposed to print or commercial ads – and actually target and reach their ideal audience.”
When money is tight, consumers hesitate to make purchases. Nacewicz said the trust influencers build in their communities encourages them to buy the products they recommend and helps drive sales even during the toughest economic times.
“Typically, their followers trust them a lot because they’ve taken the time and built trust,” she said. “For example, my community knows that I really only adopt branded campaigns from brands that I really use or have tried and really like, and trust my recommendations. Also, I take the time to chat with them in my DMs to make them seem more like friends and acquaintances than ‘followers’, which helps build that trust factor that I value so much!”
Creators help creators
Davis said she plans to lean on the creator community during tough times. When she sees a significant drop in branded business, she said she would use the power of collaboration to hedge against some of the effects of the recession hitting the creator economy.
“I have plans to partner with other influencers to do giveaways so we can support each other in this business even when times get tough,” she said.
According to Davis’ mother, Amy, no matter how the economy develops, creators can continue to thrive by leading with authenticity, a quality that becomes more important than ever in times of economic downturn. As consumers look for influencers and brands to connect with and trust during economic downturns, creators with genuine passion and purpose are at the heart of their content — and not just publishing what they were paid to advertise — who will promote to survive.
“I always advise my daughters and my writing clients not to try to gain followers or readers, but to do what they do best in the most excellent, innovative and passionate way,” she said. “If your brand is clear and consistent, with a great marketing strategy, followers will come. I also advise my clients to be generous with those in their field, asking questions and helping their peers. This is about more than strategy. It’s about improving the culture of the ‘influencers’ and using the platforms they’ve been given to make a positive impact.”
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