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The end of the influencer? Social media stars hit hard by COVID-19 crisis

Newshub logo Newshub 29/04/2020 Matt Burrows
Simone Anderson posing for a picture: The economic turmoil caused by COVID-19 has left some influencers out of work. © Instagram / @jaydenicole / @ralineshah / @simoneanderson The economic turmoil caused by COVID-19 has left some influencers out of work.

The billion-dollar influencer industry has been decimated by the coronavirus outbreak, as companies across the globe pull social media campaigns while they navigate the economic turmoil wreaked by COVID-19.

Some of the world's biggest social media stars have seen large swathes of their income slashed in recent months, with brands taking their time adjusting to the far-reaching financial and logistical impacts of the pandemic.

Globe-trotting travel bloggers are confined to their homes thanks to lockdowns and closed borders, while bans on non-essential freight and dramatic revenue reductions have seen companies tighten their purse strings markedly.

The effects have been so sudden and extreme that some industry insiders are now questioning whether they could spell the end for the Instagram influencer.

However those in the know are hopeful the industry can be salvaged in New Zealand, as the outbreak eases and economic activity returns to a degree of normality following a month in lockdown.

'It's pretty significant': Kiwi influencers feel the pinch

Mike Hewitt, managing director of PR agency Darkhorse, says alert level 4 has caused brands to pull influencer campaigns and reconsider their business activity.

However he's expecting social media marketing to click back into gear now that the lockdown period is over.

That's welcome news for people like India Heath, an Auckland-based content creator with 22,000 followers who relies on Instagram to make a living. She uses the platform to market her fitness classes and preset filters, as well as participate in brand partnerships.

While sales for Heath's FEELFIT workout classes have increased during lockdown, it's the brand partnerships - which make up a third of her total income - that have suffered.

Heath told Newshub she'd had just two companies approach her for paid sponsorship deals in the month since lockdown started - a sharp decline from the three or four approaches a week she was getting before the COVID-19 crisis.

Another Kiwi influencer, who did not want to be named, told Newshub every single one of her paid partnerships with brands had been pulled during the alert level 4 lockdown.

She explained it would've been a stressful time but for the full-time marketing job she does alongside her social media collaborations. Most of her partnerships should get the green light at level 3, she said.

Heath says while the drastic drop in paid partnerships was scary, she too is grateful it's not her sole source of income.

"I'm counting my lucky stars that I do other things [than partnerships], because otherwise right now I'd be feeling really stressed and definitely feeling the pressure," she told Newshub.

"It could potentially be a half-year hit for some [influencers]... People don't want to be putting money out there right now.

"In New Zealand especially, we're slightly smaller when it comes to influencer advertising, so we're not the first port of call like those in Australia, in the US and the UK."

The end of the road for influencers?

While it's true there are undoubtedly more lucrative markets for brands than New Zealand, influencers overseas aren't necessarily in a better position.

The likes of the US, Europe and the UK have seen COVID-19 spread rapidly, and cases of the disease are unlikely to drop to manageable levels for many months.

That's in stark contrast to the New Zealand Government's response which, while curtailing business activity in the short-term, has seen us bring the disease mostly under control, and business activity can begin to return to normal levels here.

Heath says the pandemic serves as a warning to those in the industry not to put all their eggs in one basket.

"When I started my filters business, that's when I started doing [influencing] full-time because I knew I had two forms of income - the promotional stuff and the filters," she said.

"If you work full-time and do [paid partnerships] on the side, then it's just your side income that might be affected."

Darkhorse's Hewitt believes influencers will remain "part of the marketing mix" going forward. He thinks the industry will bounce back and most social media content creators can stop fearing for their futures.

"At this stage we're seeing no signs that would point to the end of the influencer," he said.

"What we are seeing is more considered approaches and we expect to see more scrutiny in all areas of marketing spend going forward."

Influencers now need to prove 'solid results'

However Hewitt warns the financial opportunities might not be quite as lucrative or as frequent as they were before - and that means quality and engagement levels will need to be higher than ever.

"Now that New Zealand is through the worst of COVID-19, we can expect that brands will need their marketing spend to work harder," he explained.

"It will mean that more than ever, brands will need solid results from influencers to commit their marketing spend to them.

"We can expect a heavier level of scrutiny when engaging with new influencer partnerships and a focus on effective influencers who create great content and have an engaged following."

Hewitt says as businesses come out of the coronavirus pandemic, many will have to cut their marketing spend. As for whether or not this will disproportionately affect the influencer market, Hewitt says we are yet to see.

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