In recent years, influencer marketing has evolved at breakneck speed to become a billion-figure business across the world – and has yet to unleash its full potential. In June of this year, with the aim of gauging the current mood on the German market, DMEXCO asked 10 leading influencer agencies based in Germany for their perspectives on how influencer marketing is developing. In addition to budget-related questions, the survey explored the growth potential of individual influencer size categories and segments, while also delivering insights into the collaboration between advertisers and influencers and both current and future trends. The results of the expert survey are available as part of an influencer marketing special on the DMEXCO website and as a whitepaper.
More demand and more budget for 2023 and 2024
7 of the 10 agencies are seeing more demand for influencers in the advertising sector this year. Only 1 of the 10 agencies has received a smaller budget from its clients this year compared to 2022. The agencies expect the positive trend to continue in 2024. 8 of the 10 agencies predict that the budget allocated to influencer marketing will grow by 20 percent on average. Björn Wenzel, founder and CEO of Lucky Shareman, points out: “The budgets are increasing, but so are clients’ expectations. They’re demanding greater quality and performance – from reliable projections to long-running implementation. Gone are the days of simply quickly shooting a video.” The U.S.-based “Influencer Marketing Hub” projects that 21 billion U.S. dollars will be spent globally on influencer marketing this year.
Fewer followers, more homogeneous target groups, more targeted messages
In influencer marketing, the content creators aren’t just being differentiated by topic, but also based on various size categories. According to the experts surveyed, influencers with fewer than a million followers, known as nano-, micro-, mid-tier, and macro-influencers, can expect to receive more business going forward. Josef Raasch, CEO of WLO.SOCIAL, explains the phenomenon as follows: “There are a range of reasons: these influencers focus more on communicating the relevant message than concerning themselves with the number of views. Their group of followers is smaller and therefore more homogeneous, meaning that advertisers can reach their audience in a more targeted way. What’s more, the interaction between the target group and influencers is more private. As a result, product recommendations come across as authentic. Last but not least, a lot of companies need to spend their media budgets even more wisely against the backdrop of inflation and weak consumer spending. That’s where micro-influencers come in.”
By far the biggest budgets are still being allocated to the beauty and fashion segments, but the influencer agencies predict that the fields of finance, health, and pharmaceuticals will grow in the future.
Being a good product fit and having the right target group are more important than shared values
When choosing suitable influencers, the advertisers (8 of 10 of the agencies) prioritize those who can identify with the product or service and can reach the right target group. That said, shared values between clients and influencers and the authenticity of the content creators definitely do enter the equation. “While there are still purely performance-oriented activations, the industry is focusing more on content and values – and I think rightly so: the term ‘authenticity’ has been used a lot over recent years. It’s time for it to get its meaning back,” says Tobias Koppenhöfer, Managing Director of tkCommunications. Claudia Freitag, CEO of KABU Artist Management, also confirms the shift toward collaborating on an equal footing: “Consumers are becoming increasingly critical when it comes to influencer advertising. It’s therefore never been more relevant for creators to be totally behind the products they’re promoting and to authentically present them to their community through long-term storytelling. Otherwise, the creators’ credibility and advertising impact will suffer.”
In contrast, sustainability and diversity currently hardly play a role in practice and rank the lowest on the rating scale.
Trends: TikTok, stronger communities, and longer-term partnerships
Nearly all of the agencies believe that TikTok offers the greatest potential for growth, but YouTube, Twitch, and LinkedIn are also mentioned. Helge Ruff, CEO of OneTwoSocial, explains this trend: “Influencer marketing is irreversibly moving away from traditional Instagram influencers and toward content creators. The trend of building entire stories around products comes from TikTok. This creative staging in the form of videos is simply much more exciting for users.” However, Freitag stresses: “The most important thing is not the potential for growth on individual platforms, but rather building and strengthening the creators’ communities across platforms.” According to Marie Walowsky, COO of lookfamed, that’s something that’s still being achieved by “short videos that focus more on storytelling and creativity. As a result, user-generated content is becoming more and more relevant.” Another key development is the “shift toward long-term partnerships where influencers work with advertisers over a long period of time to incorporate products or product portfolios into their content. Overall, advertisers value collaborations that produce authentic brand stories,” adds Raasch. Katharina Frömsdorf, managing director of Studio71, summarizes that “clients are demanding reliable reach planning and expecting their investments in creator content to translate into business success.”
When it comes to the hot topic of artificial intelligence, the influencer scene is still relatively restrained. “AI and AR are innovative topics that many providers on the market are wanting to incorporate. However, aside from the typical acceleration processes, such as text optimization and influencer matching, these technologies have yet to be applied in a tangible way. Automation and scaling, on the other hand, are being implemented. Brands are thinking about these topics on an operational level and will want to see solutions in the next two years,” says Jan Homann, CEO of EQOLOT. While most of the agencies (6 of the 10) say that advertisers have little or no interest in virtual influencers, Studio71 and We Are Social are already marketing influencers that only exist in digital form.
Thomas Mosch, DMEXCO Conference Director: “Content creators have proven that they can build a stronger connection between brands and their target groups through authenticity and creativity. However, in the currently challenging market environment, brands are demanding credible proof of the effectiveness of their collaborations. We’ll be discussing these and other current trends during numerous presentations and masterclasses at DMEXCO – especially during our “social talk” scheduled to take place in the afternoon on September 21.”
Prof. Dominik Matyka, Chief Advisor of DMEXCO: “Influencer marketing is now a billion-figure business across the world and is becoming increasingly differentiated. The majority of influencers can’t make a living from it alone, but the top content creators have built their own brands and/or media businesses. In addition to traditional publishers, these independent content creators are now a credible and extremely efficient addition to the marketing mix of many advertisers.”
Dirk Freytag, President of the German Association for the Digital Economy (BVDW): “Influencer marketing is now undisputedly one of the standard tools for content marketing. Especially when it comes to addressing young target groups, we’re seeing how influencers can effectively complement and enhance traditional digital channels. Thanks to the work of many digital agencies, this part of the digital ecosystem is noticeably also becoming increasingly professionalized, even though the spending volume is modest compared to display advertising.”
About the survey
To gauge the current mood on the market and explore how influencer marketing has evolved compared to last year, DMEXCO conducted a survey in June 2023 among experts from 10 German-based agencies that specialize in marketing products and services with the help of influencers and content creators. The survey participants comprised (in alphabetical order): EQOLOT, KABU Artist Management, lookfamed, Lucky Shareman, OneTwoSocial, Studio71, The Influencer, tkCommunications, We Are Social, and WLO.SOCIAL. The results are presented in detail in our whitepaper on influencer marketing.