THE STATE OF INFLUENCER 2020

SPECIAL FOCUS ON FASHION, LUXURY AND BEAUTY INDUSTRIES

$25K

$20K

$15K

$10K

$5K

$0K

More than $100K 10.8%

Between $50K and $100K 11.7%

Less than Between $5K per year $20K and $50K THE STATE OF INFLUENCER INDEX MARKETING 2020 03. Intro Letter from our CEO 05. Influencer Marketing Effectiveness

SPECIAL FOCUS ON 06. Investments and Budgets FASHION, LUXURY AND BEAUTY INDUSTRIES 09. Relatability Matters

11. Popular and Emerging Channels

12. Consumer Generation Profiles

13. Influencer Marketing Challenges and Measurement

14. Influencer Challenges and Motivations

20. Covid-19: A new Industry Climate 2020 26. Predictions for the Future 28. Report Methodology The State of Influencer Marketing 2020 3

BUILDING CUSTOMER-CENTRIC STRATEGIES IS MORE 2020. A year in which the direction of influencer marketing seemed clear after years of evolution and IMPORTANT THAN stabilization. And suddenly, the Covid-19 crisis changed everything - causing not only the EVER BEFORE largest health crisis of recent years but also a heavy blow to the competing very closely with the fashion, luxury and beauty United States. This corresponds industries whose futures are still with a recent study published by uncertain. Boston Consulting Group stating that revenue from Asia will The fact that almost 95% of these represent 41% of the sector in 2025. industries work with influencers, or that the main objectives covered Generation Z has also grown as a through these types of campaigns target for in their aspiration are awareness or is not to reach the consumer of tomorrow, surprising. who will soon have a much greater Investments in influencer Share of Wallet. Consequently, marketing programs in 2020 TikTok has established itself as a key continue to grow - increasing by platform in the influencer marketing between approximately 10% and spectrum. This , (with 30% this year. But, when asked 46% of users between 16 and 24 which markets are the primary years old), is already a new channel targets for such investment, we to exploit in their actions with discovered with some surprise that influencers for 42% of brands within despite the fact that Europe the industry. continues to lead the investment objectives of most brands, the Micro influencers with niche Asian market is in second position, followings continue to be the most

www.launchmetrics.com The State of Influencer Marketing 2020 4

BUILDING CUSTOMER-CENTRIC STRATEGIES IS MORE IMPORTANT THAN EVER BEFORE effective for brands whose main At Launchmetrics, we are launching objective is a greater connection and the sixth edition of our annual closeness with their audiences. Influencer Marketing Report in the Perhaps more than ever, the key to a midst of an uncertain time, with the successful influencer marketing future outlook of the industry raising strategy is relatability. Building a many questions. At the same time, as relationship with the consumer that Einstein said: "in the midst of difficulty, goes far beyond fashion or the lies opportunity." It is time for brands to product itself, and which is 100% rebuild direct relationships and customer-centric is essential. We see relevancy to their consumers. To this trend, for example, through the analyze and measure what their finding that 56% of brands in 2020 needs are in order to maximize the say that they use their consumers result of each and every as influencers and 'User Generated action. And in this evolution, we must Content' (UGC) is positioned at the observe how influencers elevate their forefront of many strategies now. role to be part of this redefinition of the industry. Since the beginning of this crisis, brands are evolving from a I hope you find our State of Influencer product-focused communication Marketing Report 2020 insightful for line to reinforcing the intangible your business, and that it helps you to values of their brand. Influencers' start envisioning the new future for sponsored content has slowed in the your brand. CEO, LAUNCHMETRICS past two months and authenticity is now translated into valuable, transparent content that is much closer and responds better to consumer needs right now.

www.launchmetrics.com The State of Influencer Marketing 2020 05 // INFLUENCER MARKETING EFFECTIVENESS

Asos Insiders: Driving Products via Influencers

94%FIND INFLUENCER MARKETING Although Asos’ marketing initiative - EFFECTIVE FOR DRIVING SALES 'Asos Insiders' - has been running for a few years already, its results are still remarkable. It's not just about The effectiveness of influencer building brand value and gaining marketing for driving sales increased by 18% compared to 2019 visibility through Key Opinion Leaders (in the past year this campaign offered Asos $8 Million in Raising Awareness 95.8% MIV®), but also about creating an authentic community of brand Driving Sales 94.0% ambassadors driving users directly towards points of purchase. Supporting Digital Strategy 91.4% The "Insiders" are a group of about 20 trendsetters from different corners of $8M in MIV® 0 50% 100% the globe that can be found on the Is the overall value obtained by the Asos Insiders campaign in the past year. 85% was ASOS Insiders website page. Each accumulated via . influencer uses his or her accounts (mainly Instagram, but also Almost $3M in MIV® Pinterest and YouTube) to promote Is what the Influencer Voice generated for this The three main goals brands are achieving via influencer clothes, accessories and/or beauty campaign, representing 31% of the global MIV®. marketing programs include; raising awareness (an increase of products that are available to buy on almost 5% compared to last year) and supporting the digital ASOS.com and whose code they strategy of those companies. always list in the caption of every publication they post. Ari Fitz, @asos_ari Was the best performing influencer of this campaign in the last year contributing almost 18% of the MIV®. www.launchmetrics.com ASOS The State of Influencer Marketing 2020 6 // INVESTMENTS AND BUDGETS

BRANDS ARE STARTING TO FAVOR ASIA AS A TOP MARKET FOR INVESTMENT BRANDSIN INFLUENCER MARKETING CAMPAIGNS. Europe is the continent where brands USA EUROPE are investing 18% 51% the most in ASIA influencer 18.5% marketing, followed by Asia and USA.

The relevance of the luxury and fashion industries’ presence in regions such as France or Italy as well as the emerging consumption of luxury products in countries such as Russia, is probably the reason why budgets for influencer campaigns are concentrated in Europe. However, it is interesting to see that brands are favouring Asia second, and very slightly above the United States, this is likely because Chinese consumers are set to make up 46% of luxury goods purchases by 2025. www.launchmetrics.com The State of Influencer Marketing 2020 7 // INVESTMENTS AND BUDGETS

MOST PROFESSIONALS HAVE INCREASED BUDGETS BETWEEN 10% AND 30% COMPARED TO 2019

$25K $20K INFLUENCER MARKETING INVESTMENT $15K

BUDGET$10K 39% of $5K More 2020 professionals $0K than $100K 10.8% claim that Between $5K and $20K their brands Between 31.5% $50K and $100K invest more 11.7%

than $20K a $2.3K year in $5.1K influencer >>$8.5K Less than Between $5K per year $4.9K programs. $20K and $50K 29.5% 16.5% 44% Say they will increase budgets in the next year due to the growth in Brands in the fashion, luxury and beauty sector have increased overall influencer their budgets dedicated to campaigns with influencers this marketing activations. year. Most of them have increased budgets by between 10% 18.2% say it is due to and 30%. The percentage of professionals investing more than increasing collaborations $10K increased by 10% compared to 2019. with influencers in new markets.

www.launchmetrics.com The State of Influencer Marketing 2020 8 //INVESTMENTS AND BUDGETS

INDUSTRY INSIGHT WITH ARNE EGGERS, SENIOR VICE PRESIDENT, KARLA OTTO ASIA

In other markets KOLs tend to be used on them – a successful campaign will as an additional element for a marketing usually be following an integrated campaign, whereas in Asia they are approach that includes ATL, BTL, PR and usually at the heart of it. Influencers are offline activations. Marketing activations used to amplify almost every event or involving KOLs tend to follow different campaign and help brands to spread strategies compared to Western their message to wider audiences. With markets. In China, KOLs are now large and engaged audiences many increasingly engaged to do direct-sell KOLs in Asia are extremely effective at live-streaming for brands within this, so it would be rare to see a brand ecommerce platforms such as Alibaba’s Most brands would treat plan a campaign without keeping them Tmall. Hence, brands in China may also KOL partnerships as an top of mind. Most brands would treat have to develop strategies on KOL partnerships as an “always on” identifying the right KOLs to serve “always on” strategy to strategy to maintain awareness and specific purposes, from pushing sales to maintain awareness and engagement with target consumers. image building to storytelling etc., and But while influencer activations will play on which platform. engagement with target a key part in the marketing strategies for consumers. all of our clients, no brand will solely rely

www.launchmetrics.com ASOS The State of Influencer Marketing 2020 9 //RELATABILITY MATTERS

RELATABILITY 42.9%

Find Micro MATTERS 20k-100k Influencers most effective.

The success of relatable relationship with their channels when it comes to engaged followers. And, influencer marketing is clear, creating relatable content isn’t 56.3% THE TOP THREE but the way both brands and just important for brands and REASONS? creators communicate this is consumers - it’s something Of brands have leveraged 1. They are cost-effective continuously evolving. We that influencers are also their consumers as 2. They are more authentic have seen an influx of brands, paying attention to. 48% of influencers. 3. They have a better particularly in the beauty influencers would work with relationship with target industry, leveraging their a brand for free if they really consumers customers as influencers - loved them, and are conscious 56.3% of brands this year. Not in the content they present to only does this method of audiences. If there is an influencer marketing bring inauthentic match between companies closer to their brand and influencer, creators customer, it also provides may run the risk of alienating visual, real from their audience, and brands the very consumers they are may not see return. trying to attract. This is also reflected in the ever-growing popularity of 48% Micro Influencers who tend to +10% From 2019 have a more niche following, Of influencers would and therefore a strong work with a brand for free if they really loved them.

www.launchmetrics.com The State of Influencer Marketing 2020 10

A trend that has become particularly BRAND STORY: prominent in influencer marketing – specifically within the beauty industry – is utilizing customers as influencers. "Leveraging customers as GLOSSIER’S USE OF 56.3% of brands have leveraged their influencers is great, because consumers as influencers in 2019, and as a consumer I like to see CUSTOMERS AS INFLUENCERS this number is only increasing, with the products in action on other likes of digitally native brands like customers – I feel like they are Glossier paving the way for successful being honest." user generated content strategies.

Glossier was born out of Into The Gloss – who started out by just posting their a beauty website and blog developed products on her Instagram, she noted by Emily Weiss “devoted to people that “personally I feel that leveraging sharing products they love”. The brand customers as influencers is great, makes products designed with “real because as a consumer I like to see beauty routines in mind”, and has an products in action on other customers – I army of Glossier reps, who started out as feel like they are being honest.” superfans of the brand. Glossier has built their cult social media following off of Throughout 2020 it is likely that the content storytelling, directly from their prevalence of customers as influencers consumers which has built both trust for beauty brands will increase, as and legitimacy: “I’d say it does impact companies try even more so to on trust when you can see that lots of incorporate storytelling in to their people who have bought the product content, rather than just product are loving it and want to talk about how promotion. By putting customers at the good it is” says Amber, a customer who forefront of a social media strategy, the has been featured on Glossier’s people who have purchasing power can Instagram in the past. Grace, A.K.A. legitimize the brand via personal @damselflavored is a rep for the brand, testimonials.

www.launchmetrics.com The State of Influencer Marketing 2020 11 //POPULAR AND EMERGING CHANNELS

THE THE PRESENT FUTURE What channels do you use 42% to create content? Instagram is still the most Although Instagram is still the of brands plan to include TikTok in their influencer marketing popular channel for creators number one platform for Instagram strategy. 97.8% when it comes to the content influencer marketing, TikTok is Blog 63.2% they produce. Brands also making a big play when it favour Instagram as the comes to capturing Millennial 60.3% number one platform for and Gen Z consumers. Of the Twitter 44.3% collaborations (42%), brands investing in new Pinterest 40.9% specifically seeing the most channels, specifically TikTok, 55% results via Stories. The popularity 55% say it is because they say the number one reason for YouTube 37.4% of Instagram Stories as a want to engage with a new this is to reach new consumers LinkedIn 23.6% medium of collaboration has consumer. The channel is TikTok 23.2% increased since 2019, as creators designed for users to create are willing to be more flexible fun, viral moments and take Other 6.9% with content that doesn’t live part in challenges that forever in their feeds. This means everyone can get involved in, 0 50% 100% 11% partnerships can also potentially making it increasingly popular, said the main driver was to generate higher volumes of especially in today’s current leverage nano influencers content, if there is an option for climate. Brands have started to both feed posts and Stories. notice this growth, with the likes of Tommy Hilfiger, Burberry and Calvin Klein paving the way with TikTok campaigns. 23% of influencers name TikTok as one of their main channels

www.launchmetrics.com The State of Influencer Marketing 2020 12 //TARGET AUDIENCE

CONSUMER This year, Millennials remained the number one target group for brands in the fashion, luxury and beauty industries. However, Gen Z has continued to grow as a GENERATION consumer group, increasing by 9% as compared to last year. Congruently, Gen X has slightly decreased in terms of PROFILES consumer profiles that brands are targeting today.

GEN Z MILLENNIAL GEN X BABY BOOMERS

15% 67% 17% 1% of brands surveyed name of brands surveyed name this of brands surveyed name this of brands surveyed name this this group as their target group as their target group as their target group as their target consumer consumer consumer consumer

Whilst Gen Z consumers don’t Millennials currently represent Gen X still hold a large Share of Baby boomers represented the currently have the largest the largest demographic for Wallet, especially when it smallest percentage of the Share of Wallet, they are fashion, luxury and beauty comes to higher ticket items current target audience. increasingly on the radars for brands. Millennials bridge the from luxury brands. However, Because this group connect brands as future consumers gap between Gen X and Gen Z this figure is slowly decreasing with influencers less in their day and creators. in terms of what they expect as Gen Z continues to rise.. to day life, they are usually from brands today reached using a limited number of traditional channels. Key values: transparency, Key values: relatability, Key values: commitment, authenticity, accountability trust, commitment to quality, reliability Key values: accessibility, change Key channels: Media consistency, tradition Key channels: Social Key channels: Social outlets (physical and media: TikTok, Instagram, media, blogs, digital digital), blogs, some social Key channels: Magazines, YouTube articles media online media

www.launchmetrics.com The State of Influencer Marketing 2020 13 //CHALLENGES & MEASUREMENT

OF PROFESSIONALS CONSIDER MEASUREMENT AS THEIR MAIN 25% CHALLENGE WHEN MANAGING INFLUENCER PROGRAMS

BRANDS' MAIN CHALLENGES WHEN 25%What metrics do WORKING WITH INFLUENCERS professionals use? Measurement: Creating and tracking the right KPIs to assess the performance of influencer programs The number one way that brands measure the 3.2% 8.4% effectiveness of their influencer marketing ROI Justification: Demonstrating the value influencer campaigns offer our brand to the C-Levels in my company 25.0% campaigns is via social media engagement (30.85%). 9.7% 25.21% look at the impact on sales and 22.55% look at Strategy Development: Understanding the most effective influencer marketing strategies the increase in website traffic.

Content: Creating unique content to help differentiate my 16.6% brand from competitors Once again, measurement is the primary challenge for brands - 19.8% Identification: Accessing reliable data to know which maintaining a similar percentage compared to 2019. It is interesting influencers are relevant to target 17.2% to also observe how other challenges have increased in the last Scalability: Managing relationships with a large number of year, such as “ROI Justification: Demonstrating the value influencer influencers at the same time campaigns offer our brand to the C-Levels in my company” or “Strategy Development: Understanding the most effective Legal: Managing monetary and contract issues with influencers influencer marketing strategies”. And, although creating unique content occupies a fourth position with 16.6% of professionals Budgets have increased in 2020, which considering it their biggest challenge, we can say that implies that the need to understand the understanding and demonstrating the effectiveness of return on investment of this type of influencer initiatives has become the main concern in 2020 for campaign is increasingly crucial. fashion, luxury and beauty brands. Michael Jaïs, Launchmetrics CEO www.launchmetrics.com The State of Influencer Marketing 2020 14 //INFLUENCER CHALLENGES & MOTIVATIONS

THE INFLUENCER PERSPECTIVE

We also surveyed creators and monetary compensation and influencers about their current valuable content for their view on the state of influencer community. The lowest marketing today. Interestingly, motivation is the number of CHALLENGES but perhaps unsurprisingly, the followers they may receive as a biggest pain point for result of a collaboration, making influencers is still ‘unclear it important to reiterate that 56% 35% 35% of influencers say too many also say lack of creative briefs’ (56%) followed campaign partnerships have to say the guidelines transparency in number one communication by ‘too many guidelines’ (35%) make sense. Creating valuable challenge is and ‘lack of transparency’ (35%) content for an influencer’s unclear creative briefs when it comes to collaborations community requires that said and partnerships. It is clear that content really resonates with there is a real need for an their audience. Careful and increase in more open considered matches between communication between brands brand and influencer are and influencers, in order to form therefore fundamental in MOTIVATIONS more fruitful partnerships. Trust making a win-win situation, and transparency is key in a fairly where brands reach engaged Growth in 56% followers new industry that is still evolving. audiences, and creators are of influencers 37%say valuable is the lowest able to remain in line with their say the content for motivation number one their for On the other side of the coin, the brand tone of voice. motivation is community influencers monetary top two motivations for working compensation with brands in the first place are

www.launchmetrics.com The State of Influencer Marketing 2020 15 //INFLUENCER CHALLENGES & MOTIVATIONS

TIERS OF INFLUENCERS

MICRO INFLUENCER MID-TIER INFLUENCER MEGA INFLUENCER ALL-STAR INFLUENCER

20k-100k 100k-500k 500k-2M > 2M

Laura Sarah Barlondo Xenia Tchoumi Mariale Marrero theblondehills sarahbarlondo xenia mariale

"The main challenge is “I think authenticity, “I try to use my platform “My followers know me simply to satisfy the consistency, and quality to educate both men so well, so they would brand, whether in terms over quantity is what and women on the know if I partnered with of content creation or can make an influencer prejudices females still a brand and it wasn’t post-campaign impact, successful.” face.” genuine. I make sure while remaining every brand I work with authentic." Sarah Barlondo, Actor, Xenia Tchoumi, Digital is a brand I really use Influencer and Director of Fashion Creator and and love.” Laura, Travel and Style The White Flamingo Entrepreneur Creator Agency Mariale Marrero, YouTuber

www.launchmetrics.com The State of Influencer Marketing 2020 16 //INFLUENCER CHALLENGES & MOTIVATIONS

EMERGING INFLUENCERS

VIRTUAL INFLUENCER MAKEUP ARTIST CUSTOMER

Shudu Camille Thompson Starr Clare Tania Syan shudu.gram killahcamz starr_clare taniasyan

“I think virtual "Today we have “I get most of my modelling “Seeing everyday people influencers are opening Instagram which is an jobs through social media choose to purchase and brands' eyes to the amazing platform to now, and I see a lot of other enjoy using Glossier’s possibility of different broadcast the art of models doing this and going products gives a sense ways of social media makeup. People love freelance. Instagram is kind of trust that seems marketing.” watching me transform of like a little agency in itself genuine- you know they my clients.” - brands can check people’s are sharing it because Cameron James Wilson, profiles and decide whether they want to.” CEO of The Diigitals Camille Thompson, they fit the brief.” Makeup Artist Tania Syan, Glossier Starr Clare, Content Creator & customer and Founder of Model Olive and Piper www.launchmetrics.com The State of Influencer Marketing 2020 17 //INFLUENCER CHALLENGES & MOTIVATIONS

THE INFLUENCER PERSPECTIVE: It’s also been so successful for you because you have been honest in how AN INTERVIEW WITH you communicate with your followers and share your life at home. LEONIE HANNE I feel like this might be the next step. Leonie Hanne is a German All-Star How have you balanced being able to Currently, a lot of high-end brands work Influencer and entrepreneur with produce content with the change of with the people they think are cool - they always just show how amazing over 2.1 million followers on her the influencer marketing climate as a influencer relationships are with brands L Instagram alone. Leonie mainly result of Covid-19? but they don’t actually communicate creates content around the luxury fashion with people. I think this is now the industry, also running a successful blog, Ohh In the beginning during the first week I can still post when everything got serious, I had to massive difference – I can still post Couture which covers all things fashion, think. Normally, I post fashion content fashion, but I need fashion, but I need to incorporate lifestyle and travel. Starting as a strategy and work with high end brands and I was storytelling, it’s all about consultant, Leonie has three degrees under to incorporate thinking “what can I post without being communicating. We realise it also her belt, beginning her career as an influencer insensitive?” So, over the first few days, I storytelling, it’s all matters how you communicate. We by selling clothes on Kleiderkreisel - was monitoring what was going on and about have an assistant and someone that Germany’s biggest platform for re-commerce then I saw that people at home actually communicating. helps us with the website and and fashion. Ambitious and highly missed things that got their heads out of sometimes, they write things and I say to numbers-driven, Leonie quickly learnt how to being bored. Whatever it is that them: “I really like it, but at the moment strategically post content according to the entertains people, even if it's fashion, it’s we need to communicate differently.” It's algorithm of the platform, from there, building still something that people enjoy - these more about the message, and at the moment we all need to be really smart up a dedicated follower-base who migrated days magazines can’t produce and about how we communicate. with her to Instagram. brands can’t produce, but I can still try to provide creative fashion content – and people seem to really appreciate it.

www.launchmetrics.com The State of Influencer Marketing 2020 18 //INFLUENCER CHALLENGES & MOTIVATIONS

>> THE INFLUENCER PERSPECTIVE:AN INTERVIEW WITH LEONIE HANNE

You’ve also started investing more DNA of the brand but it’s also our DNA. time into TikTok. Could you talk a bit I’m not a billboard - they can’t send me more about the transition from something and say “please post on your Instagram to TikTok? Instagram” - but it’s also because I’m very clear on who I am as a brand, and I feel like a lot of influencers now are what brands I want to work with. I’ve It’s so important asking why their followers from never in the history of blogging worked for brands to Instagram aren’t migrating to TikTok - with a brand where I feel like it didn’t trust people they but it’s a different audience. Whatever really fit, or I was in for easy money. channel you are using, it’s all numbers work with. work and it’s about having a different strategy. This is how I started, and this is So, you prefer to have longer term how it works. Online is so fast, so you relationships with brands. so important for brands to trust people can’t rest, you always need to they work with. What people forget is understand each channel at that Yes, for example, I have a great behind every brand I post especially at moment and be smart about it. relationship with Dior. It's more of a fashion week, there is a long term partnership as we work collaboratively, relationship that needs to be taken care sometimes I’m educating them on the of. A lot of people think about a logo, but 56% of influencers surveyed said one processes from my perspective. For when I post I think about the people I of the biggest challenges when they people that still struggle with this topic, I know from the brand. work with brands is unclear creative think the smartest advice is to always Vuitton girl.” But they took a chance with briefs. When you work with brands ask: “what kind of content are you me. I tried hard to create content I never what do you expect? looking for, and can you go to my Talking about brands, you’ve had before. And this worked - they said Instagram, and send me 3 links of what mentioned Dior, is there any particular all the content I made was more like I think it depends so much on the brands you had in mind?” Because, if they look brand that you would say is doing it what the team would produce there, you work with, and how much closely at your feed, they will see that right in influencer marketing? in-house. So, we won their trust and they experience you have. For me and my they have to translate to your audience also realised that even if I’m not their partner, Alex, it’s very different. and how you would actually For me, relationship-wise, I’m happy and ‘typical look,’ I’m still selling. Everything is two-sided and brands communicate. proud of our relationship with Louis don’t force you to work with them - It’s a Vuitton. In the beginning Louis Vuitton I think that this is an amazing example of relationship. When we talk about There’s not one brand that would invite contacted me and said “we love you but a two-sided relationship. For me when I projects, we always make sure it’s the me to a show without knowing me. It’s I’m not sure whether you are a Louis know I produce for TikTok or Instagram,

www.launchmetrics.com The State of Influencer Marketing 2020 19 //INFLUENCER CHALLENGES & MOTIVATIONS

>> THE INFLUENCER PERSPECTIVE:AN INTERVIEW WITH LEONIE HANNE

even in lockdown, I’m always making Saddles and they wanted to take a sure to include Louis Vuitton. But I never picture with me, afterwards using the think about whether it's paid or not, I hashtag #DiorSaddle in their posts. In know it’s a relationship and I see how the Dior boutique in London, the store they reciprocate that when it’s the other manager came to me when I was there way around. for the first time and she showed me a picture, where I was wearing a Dior Another good example was Amazon bathing suit and she told me they sold Fashion. When we launched The Drop out of this bathing suit because collection for them it was really exciting everyone came to the shop with this as we had 15 international magazines picture. And this is something you can’t who wrote about it, including Vogue. We usually see online or show in numbers. produced a collection made on demand so there were no samples produced, I also know that I’m influencing other people bought the items, and they influencers. I can see what people would look at the numbers and produce respond to because a lot of people will accordingly. They said to me that they copy it. Even if they are not working with wouldn’t sell out, and from my 11 items 7 the brand or getting paid, it shows that I sold out immediately, even those that to am not only influencing my audience, me they said weren’t possible. but other industry leaders.

How do you communicate your value, or the ROI you offer to brands? It’s a relationship. When There’s so many sides to what we do which makes it more difficult to we talk about projects, we measure. An example was when I was always make sure it’s the here for the Dior exhibition and some DNA of the brand but it’s girls came up to me in a coffee shop where I was with the PR team. The girls also our DNA that came up to me were wearing Dior

www.launchmetrics.com The State of Influencer Marketing 2020 20 //COVID-19: A NEW INDUSTRY CLIMATE

THE NEW INDUSTRY CLIMATE

While the state of influencer marketing has undergone a drastic shift from the time we launched this annual survey until this moment, we felt the key takeaways and themes coming through from the survey data connected quite relevantly to those we believe will be critical in this next period. With that in mind, we wanted to take a moment to share a deeper analysis of what is slowly becoming “The New Industry Climate.” Our aim is that this, alongside the other data in this report will help each of you as you evaluate how you adapt your plans around influencer marketing as well as answer some of the questions many of you have about how your brands should be responding during this fragile moment.

www.launchmetrics.com The State of Influencer Marketing 2020 21 //COVID-19: A NEW INDUSTRY CLIMATE

SPONSORED CONTENT FROM INFLUENCERS HAS GONE FROM AN AVERAGE OF 35% TO 6% DUE TO THE COVID-19 CRISIS

The recent Covid-19 crisis has become not only customer whose last priority is consumption, an average of 35% of all influencers' publications, the world's greatest health threat, but also a brands and content creators face a much bigger to 4%. The question right now is: Will the industry dangerous enemy for a fully globalized industry. challenge: playing a social and responsible role to evolve to a much more customer-focused COVID-19Most of the brands in the fashion, luxury and satisfy their consumers’ needs now. And this is strategy? Probably, yes. What we are seeing beauty sector have seen their stores close all over done by sharing the best of themselves through during this new climate is that building a the world, keeping exclusively - and in some their transparent and sincere content and stories. relationship - far beyond the product - became a cases not even - their e-commerce stores open. priority for brands. And as part of that evolution, The digitization processes have had to be The key fact demonstrating this change: influencers became a key tool for reaching out to accelerated, to respond to the needs of a influencers' sponsored content has experienced consumers through authentic and relevant consumer whose only window of access to the a significant decrease week after week since stories. It’s not about fashion itself anymore, it’s world is the internet and online channels. mid-February when the crisis emerged. about elevating the role influencers are playing as However, in the midst of this crisis, and with a Sponsored content has gone from representing part of the industry to continue being a key part of this new scenario.

All posts Sponsored Posts

WEEKLY WEEKLY % OF INFLUENCER SPONSORED POSTS POSTS

2/23 3/8 3/22 4/5 2/23 3/8 3/22 4/5

www.launchmetrics.com The State of Influencer Marketing 2020 22 //COVID-19: A NEW INDUSTRY CLIMATE

BRANDS AND INFLUENCERS: HOW ARE THEY ADAPTING THEIR STRATEGIES DURING COVID-19?

Here, we look at the brand and influencer response to the Covid-19 crisis, impacting almost every corner of the globe. With thousands of stores closed and a considerable decrease Customer communication should focus COVID-19in sales, brands and Influencers have had to squeeze their on community-building efforts and creativity and content production capacity to help society in addressing consumers’ changing needs different ways. Here are some forward-thinking examples. and concerns.

A conglomerate of Inditex, European Fashion retailer, Pretty Little Thing is Italian luxury fashion house Gucci has As one of the first beauty brands to adopt a clothing brand, Oysho, has used their already known for their presence on taken to their Instagram to craft engaging TikTok strategy, e.l.f. were quick to create a platform to partner with influencers for Instagram via their plethora of influencer content for their audience in the wake of campaign that encouraged viewers to workshops, workouts and more. With partnerships. In response to Covid-19, the Covid-19. The brand has partnered with wash their hands and stay safe during much of the global population working brand hosted an ‘at home’ awards featuring influencers of all walks of life, to give them Covid-19. With some of the top influencers from home, and unable to resume their some of the top influencers and celebrities a platform to share snippets from their from TikTok on board such as Loren Gray, typical routines, Oysho has brought yoga today. They have also introduced an IGTV at-home life - featuring anything from the trend quickly went viral and was shared classes, bread baking tutorials and DJ series: ‘#StayHomeWithPLT’ where the musical performances to advice from across multiple social platforms, encoura- sets with some of the top names in the brand partners with influencers who Korean star and celebrity - Kai. ging users to make a video of their own. industry straight to our screens. showcase what they get up to whilst isolating.

www.launchmetrics.com The State of Influencer Marketing 2020 23 //COVID-19: A NEW INDUSTRY CLIMATE

IN GOOD AND BAD TIMES, WHY DO WE FOLLOW INFLUENCERS?

COVID-19For many fashion, luxury and beauty brands, the idea of ambassadors about their favorite products, services, brands and more. As already or celebrities toting products is not novel. However, with the recent mentioned in this survey, the connectivity and relatability these shift in consumer behavior away from a product-centric world to a digital tastemakers offered their communities is what made (and renewal of value-based marketing, we ask ourselves - how did the makes them) successful. phenomenon of influencer marketing gain its traction to begin with, and why do consumers continue to follow these digital creators The excitement of this new phenomenon quickly spurred something today? that was originally a simple two-way dialogue into a multi-million dollar industry where brands were ready to pay-for-play and a price Influencer marketing has existed since the beginning of time, it’s just could be made for nearly any type of activation. That said, since the the “influencers” who have changed. Before, it was royalty and onset of Covid-19, a renewal in the spirit of influencer marketing has religious figures, then celebrities became the the faces pushing reverted to resemble more of its origin - the authentic conversation products and representing brands around the world. More recently, between creator and community - with influencers returning to a with the rise of digital media, new content creators arose amongst a focus on content that truly adds value to the lives of their followers as shift from push marketing, to pull. This shift was fueled by the desire well as the wider world in general. Today, in this new climate we for consumers to be part of the dialogue and not just on the receiving explore the question, why do we follow the influencers we love? And end, marking the inauguration of inclusive communities where key what value do influencers provide to their followers? opinion leaders would create two-way conversations with their fans

www.launchmetrics.com The State of Influencer Marketing 2020 24 //COVID-19: A NEW INDUSTRY CLIMATE INFLUENCERS:COVID-19 OFFERING GREATER VALUE DURING QUARANTINE

ENTERTAINMENT EDUCATION ADVICE @queenofjetlags @iamamyjackson @thestylebungalow

Noor, A.K.A. @queenofjetlags is one of the many There has been a huge uptick in the accessibility to Many creators have been utilizing their platform in a influencers embracing fun and viral challenges online courses, such as live workout sessions or positive way to give advice on how they are getting online. To marry fashion with humor, she took part in cooking classes, and influencers that fit within a through isolation, from a more personal the #pillowchallenge, where creators convert their specific niche are getting involved. Amy Jackson, perspective. Stephanie Hill is a great example of pillows into dresses to create a pseudo-high fashion for example, has posted at-home workouts to this, as she has created a new branded hashtag: look. This, alongside the #fliptheswitch challenge educate her audiences on the best tips and tricks for #AtHomeWithTSB where she shares the best ways and more have been shrounding audiences' feeds staying fit at home, as well as allowing them to to relax and stay busy. Hill gives daily updates, book especially via TikTok and Instagram, as influencers participate alongside her when she does her daily recommendations, interior inspiration and more to try to provide comic relief during an otherwise workout routine. her 212k followers on Instagram. potentially stressful time.

www.launchmetrics.com The State of Influencer Marketing 2020 25 //COVID-19: A NEW INDUSTRY CLIMATE INFLUENCERS:COVID-19 OFFERING GREATER VALUE DURING QUARANTINE

SOCIAL RESPONSIBILITY INSPIRATION SELF-EXPRESSION @chiaraferragni @Nikki_Makeup @jessicawang

Italian All-Star Influencer, Chiara Ferragni, has Celebrity makeup artist, Nikki Wolff has been Jessica Wang has created an #athomeseries getting creative with her platform and how she been incredibly vocal on her platform in light of getting creative with her platform and how she where she shares engaging and artistic images utilizes it during this time. As she typically the impact Covid-19 has had on Italy, raising €4 utilizes it during this time. As she typically of her life at home. Jessica pairs beautiful creates slick makeup looks on celebrities, Nikki photography with her styled looks, to create million for relief efforts. The digital entrepreneur has started live tutorials on her Instagram, visually stunning content to keep her followers has also adapted her content to share an honest, starting with a walkthrough featuring Elsa engaged. The creator has also incorporated a behind the scenes look at her life at home, Hosk. Nikki has also been sharing her tips and story highlight in her feed which shares a more partaking in more candid TikTok challenges, and tricks for video conference makeup and has personal look behind the scenes of her speaking directly to her fans and followers. done well to evolve her content to remain isolation lifestyle. relatable to her makeup=loving audience.

www.launchmetrics.com The State of Influencer Marketing 2020 26 //PREDICTIONS FOR THE FUTURE PREDICTIONS FOR FUTURE INFLUENCER MARKETING STRATEGIES

1. Brands will start to use smarter metrics Looking only at Engagement as a metric for determining success is no longer a reliable indicator for brands. When you analyze engagement numbers in comparison to overall reach, it is clear that the potential value of an influencer for a brand is not reflected in the engagement rate shown. Brands need smarter metrics to really evaluate success and ROI, which can only be done via a holistic campaign analysis, using fine-tuned data-driven metrics.

2. Consumer connections will strengthen Now, more than ever, consumers are looking to brands and influencers who they can connect with and relate to. The content that is being produced as a result of this will become less product-focused, and will start to tell more of a story, that sheds light on how brands fit in to creators’ lives. Those that recognize and empathise with the situation that many of their followers are in, whilst remaining honest with their audiences will win out.

3. Influencer marketing will no longer be top-down The influencer marketing industry will make a shift from being a solely top-down approach, to being more bottom-up. Content development for brand-creator collaborations will be influenced more directly from creators themselves, as they try and develop more entertaining content for their existing audiences. The shift away from product-led activations will allow the direction to land more significantly in to the influencer’s hands.

www.launchmetrics.com The State of Influencer Marketing 2020 27 //PREDICTIONS FOR THE FUTURE PREDICTIONS FOR FUTURE INFLUENCER MARKETING STRATEGIES

4. Brands will diversify their strategies Whilst Millennials are still the largest target when it comes to brands in the fashion, luxury and beauty sectors, brands are slowly moving away from Gen X, and towards Gen Z who will hold the largest Share of Wallet in the future. Brands need strategies to meet the needs of all consumer generations, and because of this, the channels that they activate really matter. Retailers will look to the channels, Voices and platforms that are needed to engage each generation - be it Influencers or beyond.

5. Branded content will become more creative With less opportunity for in-person events, brands will need to become their own content creators. Previously, a brand could host an event or show, and have hundreds of opportunities for content creation just in the front row. But, with no option for live events, brands have to fuel their own content engine with the right Voices to amplify their message and continue to build brand momentum whilst increasing brand performance.

6. The physical will become digital Covid-19 has forced everyone to become more global, by transforming digital channels to reach people around the world. The landscape will become less regional, and digital will connect brands with consumers better than ever before. This is why creating a digital engagement strategy is key. Whilst it is hard to tell what globalization will look like, it is clear that digital has become a ‘must’ in just one month for the fashion, luxury and beauty industries.

www.launchmetrics.com The State of Influencer Marketing 2020 28 //METHODOLOGY

SURVEY ANSWERS BY REGION REPORT US/UK METHODOLOGY 52.9%

Europe 47.1% This report is based on a survey that was sent out between the 13th of January and the 21st of February 2020. A total of 600 professionals in marketing, communications and PR from the fashion, luxury and beauty industries completed the survey, as well as 300 Key Opinion Leaders in AREA OF EXPERTISE LEVEL OF SENIORITY both, Europe and United States.

PR & Communication 31.0% Senior Management 31.0% On the following pages you will find a breakdown of General Marketing 30.0% Middle Management 27.7% the profiles of the participants. 11.6% Other 15.1%

Social Media 11.4% C-Level 14.7%

Influencer Marketing 9.3% Entry Level 7.9%

Content Marketing 6.7% Trainee/Intern 3.4%

www.launchmetrics.com The State of Influencer Marketing 2020 29 //METHODOLOGY

REPORT WHICH COMPANY TYPE DO YOU WORK FOR? Agency Brand 31% METHODOLOGY 58.6%

Media Part of this report’ data to analyze the current impact of specific 10.5% campaigns or marketing activities was gathered with the use of Launchmetrics' proprietary Media Impact Value™ algorithm (MIV®).

About Media Impact Value™ (MIV®): Launchmetrics’ proprietary WHAT INDUSTRY DOES YOUR COMPANY OPERATE IN? Machine Learning algorithm provides brands with a unified currency to measure the value of all marketing activities across Voices, Channels, and Markets by assigning a monetary amount to every post, Beauty interaction, and article. Finely tuned to specificities of Fashion, Luxury, Fashion 19.3% and Beauty, the algorithm was trained on actual media rates and 5+ 56.6% years of FLB specific campaign data. It analyzes more than 100 quantitative and qualitative attributes including audience engagement, industry relevance, source authority, and content quality, to create a highly accurate method of measurement. MIV® Luxury offers a unified way to calculate how brand equity is being created and 24.2% which strategies create the most ROI.

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