Earlier this month, the D’Amelio family, famous for having a combined 200 million-plus followers on TikTok, announced the launch of D’Amelio Brands, a venture that will build off the family’s experience marketing to consumers to create brands of their own. The family — Marc, Heidi, Charli and Dixie — said they’re slated to launch two brands by the end of this year, with plans to expand in 2023.
"I would be concerned if I were in any category that the D'Amelio's decide to go after with their new brand development fund,” said Dylan Conroy, chief revenue officer at The Social Standard in an email. “They have a combined audience of 300M viewers across social media, that's 3x the size of the Super Bowl audience every time they post. Brand building takes time, but they have a massive advantage in any category they launch into."
The D’Amelio family’s ability to create a business, which has recruited execs including Apple’s senior vice president of services, Eddy Cue, is a far cry from the family’s media presence just a few years ago. The marketing machine that is the D’Amelio’s began with Charli and Dixie, both who joined TikTok in 2019, taking to the Byte Dance-owned platform to film dancing tutorials and lip-syncing videos. Over time, they’ve repped brands including Prada, Hollister, Dunkin’ and Amazon, to name a few. Before long, posts that were earning them about $50 rose to six figures a piece, according to details Marc D’Amelio shared with CNBC.
In 2021, Charli and Dixie earned $17.5 million and $10 million in branding and endorsement deals, respectively — making the two the highest earning TikTok creators in the world. In exchange, brands unlocked key customer insights from their following.
But as the D’Amelio’s lay the groundwork for other influencers to perhaps round out their efforts via namesake enterprises, marketers run the risk of losing access to the data points that so often make influencer marketing worth the steep spend — a total predicted to reach $5 billion, a 28% growth from the year prior, according to Insider Intelligence.
There’s no one reason the D’Amelio’s have become so successful, but their ability to relate to and connect with an audience has certainly never hurt. As the sisters and other influencers began taking to social media around the COVID-19 timeframe, a period that begged empathy across the board, influencer marketing took a shift away from standard marketing scripts and instead relied on forming relationships.
Followers and likes have increasingly mattered less, with marketers instead looking at the revenue creators are generating for them. The shift has made it vital for influencers to center in on the interests and desires of their following, and for marketers, it’s meant ditching the script, said Nicolette Trebing, director of influencers and talent partnerships at agency Movers + Shakers.
“What actually resonates much better with audiences is if you come to the influencer, and you're saying, ‘We know you're a fan of our brand, we'd really like to build something with you, here's our ideas, what do you have in mind?’” Trebing added.
The competitive edge of relatability is clear — 73% of consumers age 18-40 in the U.S. trust product reviews from people who “seem like them,” according to a study by Whalar. Further, 70% of consumers enjoy and feel loyal to creators.
Following the trend, brands are increasingly forming entire collaborations around influencers who have managed to capture the eyes of their target audiences. In March, e.l.f. Cosmetics and Dunkin’ created a themed makeup collection and enlisted creator Mikayla Nogueira, a makeup-obsessed influencer with 13.5 million and 2.4 million followers on TikTok and Instagram, respectively, at the time of publication. A native of Massachusetts, Dunkin’s home state, Nogueira had previously posted about loving the chain on her own. To date, the campaign has made over one billion impressions.
Similarly, Nature Valley enlisted sustainability-driven influencers Stephen “tWitch” Boss and Allison Holker-Boss to help boost their #ReTokForNature challenge, which invited users on TikTok to share their sustainable efforts using the hashtag for a chance to win free back-to-school gear from like-minded brands.
Fueling the creator economy
Despite the buoyancy of the creator economy, the social platforms that support influencer marketing are facing losses. In the second quarter this year, Meta, owner of Facebook and Instagram, saw its first-ever revenue downturn. Pinterest also reported in August its slowest growth in two years.
But influencer marketing remains a bright spot: Instagram is set this year to maintain its spot as the top platform for influencer marketing, with marketers set to spend $2.23 billion to activate the tactic on the platform, per estimates by Insider Intelligence shared with Marketing Dive. Behind it is Google’s YouTube at $948 million and $774.8 on TikTok, the platform expected to overtake Facebook this year and YouTube by 2024, per the estimates.
Of the most expensive platforms to activate influencer marketing, Instagram is the front runner, and influencers frequently have lower rates for content produced for TikTok, Conroy said.
“Instagram is still ten times more expensive than TikTok. And there's no good reason,” Conroy added. “Other than the fact that it’s been around for awhile, it’s people’s aspirational lives versus their more authentic lives — which I think TikTok provides.”
The platforms are changing, even if the consumer wants something different from them.
Senior strategist, PSFK
Despite seemingly holding its own, Instagram has increasingly taken tricks from TikTok’s playbook. Most recently, it received scrutiny for copying TikTok with more video-driven tools, including a change to its algorithm that deluged users’ feeds with videos — a feature it rolled back after criticism. Still, it kept its Reels platform despite the backlash, having recently expanded its time limit to 90 seconds versus 60. The move showcased how brands may be less receptive to consumer commentary as they shift to what is most popular.
“The platforms are changing, even if the consumer wants something different from them,” said Lauren Lyons, senior strategist at research company PSFK. “We're already so ingrained on that platform that we're going to change with it, whether we really want to right now or not.”
However, Instagram Reels is no match for TikTok, seemingly. A document recently reviewed by The Wall Street Journal revealed Instagram users cumulatively spending 17.6 million hours each day watching Reels, a vast difference compared to the 197.8 million hours TikTok users are spending on the app per day.
Reels and other shoppable content formats have seen a lean-in by marketers as they pull in influencers to show off products via video and livestream and reach target millennial, Gen Z and Gen Alpha communities.
Brands have seen success using influencers to promote partnerships from their own page, said Trebing, and then the brand will often use their own page to host a live stream tied to an event with a shopping link tied below the live feed, offering both the brand and influencer a chance to expand their reach.
Subsequently, various platforms have taken a few more tips from TikTok and its success with short videos. For example, Facebook in October will shut down its live shopping feature in favor of short-form video, while YouTube added a short-form video offering in June. TikTok also added three new shopping formats in August.
Everybody can be an influencer
No matter the platform, partnering with a major influencer tasks advertisers with restructuring their budgets. To become more cost efficient, they’re increasingly relying on the use of micro- and nano-influencers. Spend on nano-influencers, or those with fewer than 5,000 followers, makes up the fastest growing segment of spend on influencer marketing this year with an increased spend of 220.5%, per Insider Intelligence findings. The research company has previously noted that micro influencers have between 1,000 to 10,000 followers, though others have defined the category as having between 10,000 to 100,000 followers.
Besides being more cost effective than hiring an influencer with a much larger social following, a micro- or nano-influencer offers the opportunity to tap into niche audiences with higher odds of actually relating to their small but dedicated following, which is more likely to be family and friends, friends of friends, or people who feel a connection based on shared interests. Marketers may also have more power with such partnerships, Conroy said.
“Micro-influencers tend to be a little bit more willing to give brands the ability to either own the content that they create from an influencer campaign outright, which is an extremely important asset nowadays,” Conroy added. “If you run a campaign and take $100,000 that would normally go to one influencer, and you pay $1,000 to 100 influencers, you get much more engagement and return on investment.”
In an attempt to strengthen relationships with influencers, some brands are even creating educational resources to help influencers grow their following and learn how to market themselves better. Of course, funding such an effort also unlocks the potential to have readily available influencers who already know the brand.
In its Influencer Marketing Landscape report, PSFK called out Nivea, a lotion brand that created an influencer marketing academy in India for college-aged students, particularly women, looking to get into the career, Lyons said. The program offers educational courses, resources, and a one-year ambassadorship with the brand.
“It's things like this that are going to get us closer to that true partnership,” she added.
Virtual characters aren’t faultless
As with partnering with any human, influencers can be a liability risk for brands if there’s a misstep or troubled history. In response, some are utilizing virtual influencers to craft the ideal image of what the influencer would look like and what they would support. Fifty-eight percent of people follow at least one virtual influencer, according to a survey by agency The Influencer Marketing Factory. However, only 35% of those surveyed reported having purchased something promoted by one. For instance, Pacsun recently collaborated with top CGI influencer Miquela to support its back-to-school and holiday campaigns.
Virtual influencers may let brands control what consumers see, but they face skepticism for their lack of authenticity. For example, Miquela, created by software company Brud, caught criticism for sharing a vlog about being sexually assaulted, with many arguing that the real-world issue shouldn’t be scripted in a virtual world. Some influencers also support social causes, like Black Lives Matter, but leave consumers wondering how and in what ways.
“There has rightly been some pushback about like, how is this authentic?” Lyons said. “They say that they support certain things, but there's no real person behind it. It can get a little bit murky as far as how authentic or how personable you can really be with these types of influencers.”
Still, gaming and the metaverse offer emerging opportunities for virtual influencers, Trebing said.
“We have a lot of interest in brands to open spaces in Meta and have influencers attend events or visit a location,” Trebing said. “So there is sort of an opportunity there to take real influencers and place them in virtual worlds. I'd say right now that's more the trend rather than creating fictional characters or even inviting existing virtual influencers into spaces.”