Brands facing a ‘cost of operating crisis’ reassess influencer relations

The public has been enduring a cost-of-living crisis fuelled by soaring inflation and utility bills, but now businesses are also facing their own ‘cost of operating crisis’. A new report from Sapio Research has found that a staggering 95% of businesses worldwide are in fear of recession, with just over a fifth already being materially affected by the current economic downturn. In fact, marketing budgets are being slashed across the board to cut down on costs. On top of this, government initiatives have even urged businesses to reduce the amount spent on marketing in order to make their products more affordable for consumers.

The influencer sphere has been seriously affected by businesses looking for new ways to save on marketing expenses, with a staggering 30% of influencers seeing a reduction in fees as brands begin to cancecampaigns, reduce spend, and broker gifting-only deals. The era of easy cash and fickle relationships amidst a $16.4bn industry might just be coming to an end, giving rise to a bartering economy where platforms such as The Room are eliminating currency out of the equation. In turn, the exchange is driven by brand advocacy and passion as influencers are connected with brands offering products and services they genuinely love, therefore negating disingenuous content.

Alex Payne, co-founder of The Room comments:

“In 2022, brands should not just ‘place ads through influencers’. Instead, they should be creating fans and building relationships. When you reciprocate that love, you’ll get more than you ever receive by paying someone – in volume of content, authenticity, engagement and positive word of mouth.

“Brand love is becoming an increasingly important part of a marketing mix because of the power of advocacy. #Influence is talking about the things you’re paid to. #Advocacy is talking about the things you love. Brand love is far more accessible and relatable than brand endorsement.

“Audiences of course understand that the best influencers should earn money, but they are now demanding their heroes have right collaborations with the right brands. But that alone it is not enough. Instead, people of influence have to keep talking about the things they love, and the causes they believe in.”