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In the ever-evolving landscape of digital marketing, the creator economy has emerged as a powerful force, reshaping the way brands connect with consumers. A recent study conducted by LTK in partnership with Northwestern University’s Retail Analytics Council highlights the profound impact of creator marketing, an industry now estimated at $21 billion.
Brands and retailers are investing more than ever in creators because they are seeing the critical role they play in brand building across the entire marketing funnel, from awareness to consideration and conversion. Globally, marketers are expected to spend more than $32 billion on influencer marketing in 2024, and influencer spend is now outpacing traditional ad investment, with 80% of brands saying they increased creator budgets in 2023.
A whopping 92% of brands plan to increase their spending on creators in 2024, and 36% plan to spend at least half of their entire digital marketing budget on creators. When asked where their marketing dollars are shifting, creator marketing and connected TV shared the top position overall for investment growth, beating out channels like paid search and paid social.
The study also found that dollars are being moved from digital ads to creator marketing because the scale of creator marketing has proven to be more efficient when compared to side-by-side, all-cost measurement. In fact, 100% of big box and grocery brands said creators will take a higher percentage of the budget or an increased role in 2024 marketing strategies.
Creator trust is driving purchase decisions
Consumers across various industries have come to trust creators when making their purchasing decisions. A staggering 73% of Gen Z, 68% of millennials and 57% of the general population look to creators when making purchase decisions. Because of the significant trust creators have built with their communities, the majority of surveyed brands said consumers are turning to creators the most compared to social media ads and celebrities. When it comes to social media ads, 95% of CPG brands use creator-generated content.
Brands recognize creators’ full-funnel impact
Creators have evolved into valuable assets for brands, capable of driving substantial business impact. The study reveals that brands are leveraging creators to support various strategies, including increasing repeat purchases and basket size, boosting brand and product recognition, expanding consideration among new audiences, fostering loyalty and enhancing retention. With consumer trust in creators playing a pivotal role, more than half of fashion brands and 45% of beauty brands reported that creators have improved their brand perception.
Brands have built multifaceted creator programs average 3.8 different goals for their partners. Brands report the top four most important goals for creators are generating content, driving loyalty, creating awareness and driving sales.
Leveraging creators in retail media networks
Retail media networks (RMN) are still expected to grow but a little slower than anticipated, in part because the digital aspect of retail media was so quickly adopted. More than 80% of brands have fully or nearly completely integrated retail media networks with their other digital channels and practices.
However, retail media is not meeting the expectations of brands in large part because of reporting. Most say they measure performance based on ROAS because that’s all they can access, but brands actually listed ROAS lowest among all measurements. Brands want to grow their audiences and loyalty and look at longer-term, big-picture performance metrics. This is where creators can help given their full-funnel impact.
How to win with creators in 2024
Creator content is more essential than ever in the marketing mix. An impressive 98% of brands are using creator content for channels beyond just social media, highlighting its versatility and reach. Creator investment is also growing at an astonishing rate, outpacing other digital channels. Brands with winning creator strategies are investing in creators to maximize their impact across various channels and are focusing on achieving full-funnel impact by driving three key metrics: audience growth, awareness and increased sales.
As we move into 2024, creator marketing is fundamental shifting how brands engage with consumers. The world of marketing is evolving, and those who embrace the rise of creators will find themselves at the forefront of this transformative wave. The time to invest in creators and their unique ability to influence, engage and build trust with consumers is now.
The reported data is from a brand survey conducted by LTK in collaboration with Northwestern University’s Retail Analytics Council in August 2023 among 164 marketing decision-makers that have invested in creator marketing in the last 12 months. More than half of the global brands were valued at more than $1 billion and included top retail, fashion, beauty and health, CPG, tech, entertainment, auto, travel and service industries. The full study is available for download here.