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R O U N D U P

INFLUENCER MARKETING
IN 2023
June 2023

As brands look to stretch their dollars amid an overall US ad slowdown, influencer marketing is one area ripe
for exploration. eMarketer has curated this roundup of insights, articles, and interviews to help marketers
understand how to find influencers, how generative AI will affect the creator economy, and the impacts of
potential TikTok bans on advertising.
TABLE OF CONTENTS

3   From the sponsor

4   4 things to know about the creator economy in 2023

6   6 tactics for finding small influencers who provide big returns

8   How will generative AI impact the creator economy?

9   3 reasons why marketers should work with brand ambassadors

11  Get your ads in gear for recessionary times

13  TikTok remains social’s darling, but advertisers beware of a ban

14  Gen Z is the social video generation

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FROM THE SPONSOR

Creator Guided Shopping

LTK, the No. 1 tech-enabled power partner for creator-guided shopping,

has over 20 million monthly shoppers driving billions of dollars in trackable
brand sales through its curated creator community and top-rated shopping
experience.

LTK’s creators run their businesses on LTK, simplifying creator selection and
scaling creator marketing while eliminating privacy issues in communicating
with creators.

A recent national study conducted in March 2023 found that Gen Z and
millennials trust creators more than ads or celebrities. The majority also
regularly buy creator recommendations online and in-store.

It’s been proven that brands that continue to increase their marketing
investment during a recession and recalibrate their spend to more effective
media are more likely to improve their growth during and post recession.
For brands targeting Gen Z and millennials, influencer marketing can be an
important part of a successful marketing plan.

Featured Creators via LTK:

@sid_tilt, @tanicha, @cadeanderson38

INFLUENCER MARKETING IN 2023 ROUNDUP 3

4 THINGS TO KNOW ABOUT THE
CREATOR ECONOMY IN 2023

1. The creator economy could be a more than $100 billion industry,

but market sizing is difficult

There is no industrywide definition for the constantly evolving space.

One commonly cited figure sizes the creator economy at $104.2 billion
in mid-2022.

Meanwhile, the leading companies across the top 10 types of creator

economy services collectively brought in roughly $9.50 billion in
revenues in 2022, per influencer marketing software company
NeoReach. But that’s just a small slice of the market, and there is a long
tail of other creator-focused companies that bring in revenues.

2. Investment dropped by around $1.5 billion in less than two years

VC funding for creator economy startups slowed to just $270 million

in the fourth quarter of 2022, down from a peak of $1.70 billion in
the second quarter of 2021, per The Information’s “Creator Economy
Database.” That’s led some industry experts to assert that the creator
economy was overblown.

Brands should prepare for the funding chill to continue into 2023 as
economic conditions remain tough, but remember that investment is
only one part of the picture.

“It’s called the creator economy, not the investor economy,” said Brendan
Gahan, partner and chief social officer at Mekanism.

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3. There could be up to 303 million creators worldwide

Estimates of the number of creators worldwide vary greatly, depending

on how the term “creator” is defined and the date of the study.

VC firm SignalFire’s 2020 estimate of 50 million is on the low end of the

spectrum and is still widely cited in major media.

An August 2022 study by Adobe suggests that the number of creators

could be much higher, at 303 million—and over half of those joined the
creator economy since 2020.

4. Many creators want to be more than influencers

Brand sponsorships will remain most creators’ No. 1 revenue stream in

2023. But many creators are now branching out from promoting brands
to developing brands of their own.

After generating nearly $250 million in sales last year, YouTube creators
Logan Paul and KSI’s energy drink Prime became the first creator-led
brand to have a Super Bowl commercial this year.

Prime’s success will inspire other creators to follow suit. But launching
a business requires a different mindset than creating content, said
The leading companies across the top 10
Alessandro Bogliari, founder and CEO of The Influencer Marketing types of creator economy services
Factory, suggesting that not every creator will go that route. As
a result, brands will continue to be an integral part of creator
collectively brought in roughly $9.50 billion
monetization this year. in revenues in 2022, per influencer
marketing software company NeoReach.

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6 TACTICS FOR FINDING SMALL INFLUENCERS
WHO PROVIDE BIG RETURNS

The influencer landscape is more crowded than ever. Leveraging

smaller influencers will help your brand focus a limited budget toward
a targeted audience.

“We’ve had luck with big influencers, and we’ve had tremendous failure
with big influencers, and we’ve had sleeper hits [with] micro-influencers,”
said furniture rental company Fernish’s CMO Evelyn Krasnow, speaking
at eTail West 2023 in March. Finding the right influencers is “going to be
trial and error,” said Krasnow.

Don’t trial influencers heedlessly. Here are tips for finding smaller
influencers who can reach niche, targeted audiences.

1. Leverage Google to ensure you’re using the right medium

A lot of influencers, especially smaller ones, specialize in either photos

(like traditional Instagram influencers) or videos (like YouTube or
TikTok). Before you decide which influencers to work with, make sure
you’re working within the right medium.

Search the same keywords used on your brand’s product listings. If

Google ranks YouTube within the top 10 results, that’s a good indicator
people searching those terms are interested in video content, so
YouTube and TikTok influencers could pay off.

Wil Reynolds, CEO and vice president of Seer Interactive, elaborated on

this strategy at the Paid Search Association Conference 2023 in February,
saying, “I’m trying to use YouTube as my proxy [to show], ‘Google believes
that video might be the right answer,’ which then can help me to have a
seat at the table when it relates to how to invest in TikTok.”

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2. Use those same keyword search results to find 5. Find out who follows your brand
individual people
One way to reach those existing customers is to get acquainted with
The same keywords that offer insights into the best media approach will followers of brand social accounts. If an account that follows your brand
also offer insights into the most influential posters. Use keywords from has its own following, even a small one, building that relationship can
product listings to determine top influencers for related areas. Niche, pay off.
specific keywords can help to find micro-influencers who already create
6. Keep an ear to social channels
content related to your products.
Social listening is a great strategy for finding leading voices related to
3. Check TikTok search pages to find the top posters
your brand. Comments, hashtags, and Facebook groups are all great
TikTok keeps a lot of information secret, but it’s very forthcoming places to discover micro-influencers who either interact with your brand
about impressions. Even smaller TikTokers can rake in millions or with brands selling similar products. But don’t be afraid to branch out
of impressions on a single video. You can find relevant pages by to other channels where people review products, like Reddit.
searching terms within TikTok, selecting the “Top” tab, and seeing
which creators are getting the most views. Having trouble finding
search terms that TikTokers use? Go to Google first. Then use those “We’ve had luck with big influencers, and
keywords to inform your TikTok search.
we’ve had tremendous failure with big
4. Work with existing customers
influencers, and we’ve had sleeper hits
Micro-influencers’ smaller audiences lead to a community feel that
can make product endorsements feel more authentic than with bigger
[with] micro-influencers,” said Fernish
creators. Take this authenticity a step further by sourcing influencers CMO Evelyn Krasnow.
from existing customers.

Outdoor goods company Solo Brands has had success with micro-
influencers who already love the brand. “I think authenticity around
affiliates that have good content around your brand and are true either
users or advocates of the brand has been more effective for us than
influencers where people can kind of see between the lines,” said CEO
and director John Merris.

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HOW WILL GENERATIVE AI IMPACT
THE CREATOR ECONOMY?

Generative AI will serve as a creative spark for sponsored content and

spur new growth in the creator economy.

Generative AI will simplify and expedite the content creation

process. That will lower the barrier to entry for up-and-coming creators
and increase the amount of content creators can develop.

It will facilitate brand-creator sponsorships. To an extent, the tech

will make it easier for brands to identify the right types of creators to
work with, and it will help marketers align with them on creative.

It will drive investment growth. Venture capital investment in the

creator economy plummeted in 2022. This year, generative AI will be
one bright spot in an otherwise slow investment period. There are
roughly 450 startups—including creator-focused ones, like Jasper and
Runway—currently working on generative AI, per NFX data.

It will place a premium on creativity. The fear that generative AI will

create a deluge of subpar content is warranted. But after an initial rush,
the industry will right itself. Creators who rely on their own creativity and
use generative AI to refine their content will stand out from the crowd
and be in higher demand.

It will result in more creative tools from the social platforms.

Meta’s generative AI language model LLaMA isn’t directly aimed
at creators, but in a February 2023 Facebook post, CEO Mark
Zuckerberg said the company is focused on “building creative and
expressive tools” and “developing AI personas.” And Neal Mohan, the
new head of YouTube, said in March that the company is developing
generative AI tools for creators.

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3 REASONS WHY MARKETERS SHOULD WORK
WITH BRAND AMBASSADORS

Influencers may be an attractive option for brands looking to broaden

their reach, but if a creator isn’t able to promote the service or product, it
can come off as inauthentic and turn consumers away.

Brands looking for a way to promote their products should look to brand
ambassadorships (longer-term relationships with creators that already
have familiarity with the brand). Here are three reasons why.

1. Brand ambassadors already love the product

Brand ambassadors are already invested in a product or service, making

the partnership feel more authentic to consumers.

“The best influencers are the ones who are passionate about your
brand,” said Sneha Lakkaraju, head of marketing and product
development at Pandia Health, which sells birth control medication and
acne treatment online. “If you have a mission they can get behind, that
passion comes easier.”

Pandia Health has been working with several creators across social
media platforms, including Tamra Moon.

“Tamra has been a huge advocate of Pandia Health, and her take on
the brand has not only helped drive new customers but also helped
our marketing team discover some new, interesting ways to talk about
our product,” said Lakkaraju. “She shared narratives regarding her
experience with birth control, reproductive health, and the stigmas
around talking about reproductive health that resonated with her
audience and helped our team generate content to answer some of
the common questions she received.”

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2. Brand ambassadors can integrate your brand into their
content organically
“Long-term creator partnerships [like brand ambassadorships] allow
brands to showcase a more robust, authentic narrative about the way in
which their product or service can improve someone’s life,” said Brianna
Ziegler, marketing manager at Fernish.
Ziegler said Fernish is working with Sruthi Jayadevan while she moves
from Dallas to Los Angeles, giving her followers a close-up look at how
Fernish helps consumers as they move from city to city.
Lakkaraju also emphasized the importance of brand ambassadors
incorporating brand content into their everyday lives.
“[Ambassador] Chante Williams didn’t necessarily make the product
front-and-center in her posts,” she said. “Her posts would be focused
on her day-to-day life, like reading in her room or walking through town,
but Pandia’s product was always in the background or our website on a
computer screen behind her.”
Though it was a departure from Pandia Health’s normal content style, it
was very effective.
“Her posting drummed up loads of conversations in her comments and
produced some of the highest-performing ads of the influencers we
worked with,” said Lakkaraju. “And in a way, it got our messaging across
perfectly. Pandia’s goal is to make getting birth control easy, so we fit
seamlessly into the background of your everyday life.”
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3. Brand ambassadors make for more seamless optimization
and measurement
Longer partnerships with brand ambassadors enhance the
ambassadors’ content, but they also create a better feedback loop,
helping brands and influencers optimize campaigns, Angela Seits, head
of strategic planning and insights at PMG, said during our virtual summit
in December 2022.
“If you want conversion analysis, give your influencers the right tools
to give you those metrics,” said Lakkaraju. “Discount codes, UTM links,
etc., are great ways to connect social [accounts] to your conversion
numbers.”
This helps both the influencer see how they’re doing and gives the
marketing team a clear picture of what the influencer marketing funnel
looks like and where to optimize.
A win-win: It’s not just brands that benefit. Jane Ko, social influencer and
the blogger behind A Taste of Koko, said establishing long-term brand
relationships helps her to better understand the brand and deliver more
authentic content to her followers.
“I personally love longer-term partnerships and I am selective with the
brands that I do want to be in a long-term relationship with,” she said. “It
gives me more time to become familiar with the brand and authentically
integrate [it] into my lifestyle if I’m not using them already.”
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GET YOUR ADS IN GEAR FOR RECESSIONARY TIMES
This sponsored article was contributed by LTK.
Rodney Mason
Head of Marketing, Brand Partnerships, LTK
Seventy-two percent of the US population believe
the US economy is in a recession according to a
March 2023 national shopper study conducted
by LTK. The Conference Board’s Leading Economic
Index, a reliable source for identifying recessions, also
indicates US recessionary signals.
However, there is a silver lining in recessionary times for marketers. The
average span of a recession is just 10 months, with an average recovery time
of 57 months, according to The National Bureau of Economic Research. It’s
been proven that brands that maintain or increase their marketing investment
during a recession and reallocate to better performing media options, grow
most during and post recession.
A recently released 20 year recessionary study by Analytic Partners found an
average of 17% growth in incremental sales for brands that invested more in
advertising during a recession. The analysis also reveals that 60% of brands
that increased marketing spend during the last recession saw an increased
ROI improvement, and more than 50% of those brands saw increased ROI in
back-to-back years.
The same study also identified that brands that grew during a recession not
only maintained or increased marketing spend, but most often recalibrated
their ad investment to optimize for behavioral shifts in the market.
For brands targeting Gen Z and millennials, influencer campaigns offer a
significant opportunity to improve ad dollar spend in recessionary times.
LTK’s 2023 “Gen Z Shopper Study” found that millennials and Gen Z
trust creators more than ads or celebrities with 77% of Gen Z and 67% of
millennials shopping in-store based on creators’ recommendations.
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Additionally, a 2022 LTK study identified that Gen Z and millennials—the
two generations most aligned with creators—are least impacted by inflation
in part because their income rises more closely with the rate of inflation.
But creators are not only popular with Gen Z and millennials. LTK’s “Gen Z
Shopper Study” also identified that nearly two-thirds (63%) of the general
population shop creators online based on creators’ recommendations, and
79% have favorable opinions about creator content.
Creator shoppers in the “Gen Z Shopper Study” were three times as likely
to say their buying power is stable or improved and their intent to purchase
has increased YoY versus those who don’t shop through creators. Twenty
million people shop creator stores on the LTK platform each month. The
company’s Q1 2023 clicks and gross merchandise volume saw double-digit
growth over the year prior, in spite of economic headwinds.
Digital media buyers are following suit with consumer preferences by
investing more in creators. The Interactive Advertising Bureau released an
ad buyer study in May 2023 that found digital ad buyers are planning more
campaigns to run against creator-generated content than Hollywood-
produced content, with short-form video being the most planned format.
As recessionary trends continue, the proven smart strategy for brands is to
continue marketing investment at traditional or even increased levels, while
recalibrating a portion of advertising investment toward influencers, whom
Gen Z and millennials trust more than ads.
To learn more about the benefits of investing in creator marketing in a
tough economic climate, check out LTK’s webinar, “Creator Marketing for
Recessionary Times.”
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TIKTOK REMAINS SOCIAL’S DARLING, BUT
ADVERTISERS BEWARE OF A BAN

TikTok’s massive revenue growth over the past few years has begun to
slow down. But the app is nowhere near finished reshaping the social and
digital ad markets—which it will continue to do even if it gets banned.

• TikTok will generate more US digital ad revenues than Twitter,

Snapchat, and Reddit combined in 2023, per our estimates. And
it will account for 2.5% of all US digital ad spending. In 2019, TikTok
brought in less than $200 million in US ad revenues.

• Though its US ad revenues will grow only 36.0% in 2023, that’s

faster than what we expect from any of its social competitors.
Prior to this year, TikTok had recorded three consecutive years of
triple-digit US ad revenue growth. Even with more modest growth
projected for 2024, we expect revenues to rise 26.1%, to $8.62
billion.

• TikTok has drawn more advertisers onto its platform, but many
are struggling to master its nuances, according to several media
agency sources. Instead of learning to trust a new platform, brands
are instead having trouble doing what is needed to produce content
at the speed and volume required to scale up on TikTok.

• US lawmakers could potentially derail things. The possibility of

US government intervention stopping TikTok in its tracks is much
less remote than it was six months ago. While it’s hard to predict
what will happen, multiple government agencies and lawmakers are
set on either banning TikTok or radically altering its US business.

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GEN Z IS THE SOCIAL VIDEO GENERATION

Just as Facebook became the platform that defined millennials’ social

media experience, TikTok is cruising toward a similar status for Gen Z—
but it’s taking a different route.

• TikTok still trails some incumbents’ penetration rates of US

teen users. As of fall 2022, 83% of US teens were using TikTok
at least monthly, equivalent with Snapchat but behind Instagram
(87%), according to a September 2022 Piper Sandler survey.

• But TikTok crushes the competition in terms of time spent

among 16- to 25-year-olds. The amount of time the 16-to-25
age group spends with TikTok weekly is more than triple their time
spent with Instagram or Snapchat, according to September 2022
data from Measure Protocol. YouTube is TikTok’s closest competitor,
trailing by more than 6 hours. However, YouTube comfortably
surpasses TikTok in terms of user penetration of that age group
(93% versus 78%, respectively).

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Sources and Methodology Related Resources

This eMarketer Roundup features a compiled collection of
our forecasts and analysis from recently published articles
and reports.
Contributors and Production
Danielle Drolet - Content Director, Content Studio
Jen King - Studio Producer, Content Studio
Elizabeth O’Connor - Senior Director, Media Solutions & Strategy
Henry Powderly - Vice President, Content
Becky Schilling - Senior Director, Content
Laura Williams - Art Director, Content Studio
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