FMCG companies ramp up influencer marketing spend amid coronavirus outbreak

85% of fast moving consumer goods (FMCG) companies have had their brand negatively impacted due to an association with a social media influencer, with 24% of these claiming to have been adversely affected multiple times.

25% report losses between $100,00-$250,000 from these experiences, according to a report by Duff & Phelps and Kroll.

The pair surveyed 917 marketing and brand managers across the UK, US, France, Germany, Ireland, Netherlands, Spain, Italy and the United Arab Emirates.

Despite the aforementioned risks, coronavirus lockdowns have resulted in two-thirds of FMCG companies either maintaining their influencer spending at pre-Covid-19 levels or increasing it slightly, while 19% have upped it significantly.

Consumer devotion to digital devices during the pandemic has boosted the influencer industry. By 2021, 46% expect to spend 31-50% of their total marketing budget on this space, up one-fifth compared to the average spent between 2018-2020, while 8% will stump up more than 70%.

Michael Weaver, Managing Director Valuation Advisory Services at Duff & Phelps, says: “Marketing teams once relied on securing the most expensive celebrity they could afford for a television campaign or billboard, but this strategy is increasingly obsolete in the digital age.”

“FMCG companies are satisfied with the return on investment from influencers and are diverting marketing spend away from other traditional advertising and marketing tactics to keep the momentum going.”

“We can’t deny that the lockdown and subsequent restriction measures have also played a part in boosting the industry. But regardless, we don’t expect influencer marketing to slow down post-Covid-19 either.”