Home >Companies >News >FMCG companies shift ad spends towards influencer marketing

Marketing promotions for fast-moving consumer goods (FMCG) firms are gradually shifting towards digital forums as these firms are increasingly focusing on employing social media influencers in their campaigns. This is largely because consumers have been spending a lot of time on digital devices following the coronavirus outbreak and this has supercharged the influencer industry.

During lockdown implemented to contain the spread of the virus, two-thirds of FMCG companies globally have either maintained their influencer spending at pre-covid-19 levels or increased it slightly, while nearly a fifth (19%) raised it significantly, stated a report by advisory firm Duff & Phelps and its division Kroll.

By 2021, nearly half of FMCG companies (46%) are expected to spend 31-50% of their total marketing budget on influencers, up 20% from the average spent between 2018-2020, according to the report. About 8% will spend more than 70%.

The Face Value Report highlights the results of a survey of more than 900 marketing and brand managers within the FMCG sector across nine global markets, excluding India. It provides insights into the value of influencer marketing, as well as the financial and reputational impact of negative influencer experiences.

The average amount spent per influencer among FMCG companies globally is $22,151 per year. However, the UK spends $18,602 on average and boasts a high sales increase to expense ratio at 73%, which is above the all countries average of 46%.

FMCG companies will typically spread their spending across dozens of influencers. About 45% of companies stated they usually work with 51-100 at a time and this could rise as the influencer method of marketing becomes more entrenched. UK companies appear to use the fewest number of influencers at around 66, compared to the global average of 81.

In India, FMCG firms such as Hindustan Unilever Ltd, Nestle and PepsiCo have actively started collaborating with influencers for a variety of brands categories including skincare (Ponds), instant noodles (Maggi) and snack (Lay’s) across social media platforms.

Influencer marketing also comes with certain risks. Around 25% of FMCG firms report losses between $100,00-$250,000 from a negative influencer experience.

“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," said Michael Weaver, managing director, valuation advisory services at Duff & Phelps.

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