Bud Light debacle
Edition 102 | Creator trust spans generations
Issue #102 | Your reading time this week is 8 mins. 05 secs.
Don’t jinx it. But our sector appears to be buoyant. Goldman Sachs reports that the Creator Economy could double within four years to become worth half-a-trillion dollars. This week we also look at the Bud Light controversy and ask how it might have been avoided. We see how the UK government plans to take on Big Tech. And, we note that creator trust spans generations
Creator economy could hit $½ trillion by 2027
The creator economy could nearly double in value by 2027 hitting $480 billion from today’s $250 billion. This is according to a new report by Goldman Sachs.
Today creators earn 68.8% of their revenue through influencer marketing brand collaborations. The second highest revenue stream is a share of advertising revenue from platforms. This, however, contributes just 7.3% of the average income earned by creators.
UK advertising exports worth £15 billion
The UK exported £15bn in advertising and market research services in 2021, according to the latest Office for National Statistics (ONS) data as reported by The Advertising Association.
The UK retained an overall trade surplus of advertising and marketing services in 2021, contributing a net £3bn to balance of payments.
The US takes top slot in receiving UK exports at £3.9bn worth of advertising and market research services.
Germany takes second spot with £1.36 billion of UK exports.
Ireland takes bronze position receiving UK exports worth £894 million.
Interestingly Australia receives exports worth £538m and takes 7th position.
Influence is King
Global M&A activity steady in Q1
Global Merger & Acquisition deal activity in tech, digital, media and marketing fell just 3% in Q1 2023 compared to the same period last year despite significant geo-political and economic headwinds according to Ciesco.
61% of deal activity came through digital services, adtech/martech and content & production sub-sectors.
The PR & Communications activity jumped 117% over Q1 2022.
The USA and the UK were the most active M&A markets in Q1 2023, representing 49% of all global deals.
New bill takes on big tech
The UK’s Competition and Market Authority (CMA) has welcomed draft legislation which, if passed, would give it more power to tackle big tech via its Digital Markets Unit.
The Digital Markets, Competition and Consumers (DMCC) Bill zooms in on three areas:
Consumer protection: The basic right that people should be able to shop without fear of being ripped off and fair-dealing businesses should be able to compete without being disadvantaged by those who break the rules. This means clamping down further on creators who post fake reviews. To help enforce this CMA will be able to fine offending businesses up to 10% of their global turnover. Currently the CMA has to take each case to court.
Digital markets: The bill establishes a new, targeted regime built for the digital age, overseen by the Digital Markets Unit (DMU) in the CMA – that will use a proportionate approach to hold digital firms accountable for their actions. The bill is designed to enable all innovating businesses to compete fairly. It will set rules that will prevent firms with Strategic Market Status from using their size and power to limit digital innovation or market access.
Competition: Bolstered investigative and enforcement powers will mean the CMA can conduct faster and more flexible competition investigations, which identify and stop unlawful anticompetitive conduct more quickly.
Creator trust spans generations
Over half of surveyed internet users in the U.S. say they’ve bought a product after seeing it being used by an influencer. This is according to a new study by IZEA. The biggest uptick in creator trust comes from the 45-60 age group where 53.8% say they were persuaded to buy having seen creator content. The percentage was just 39% last year.
18-to-29-year-olds turn to TikTok ahead of asking family and friends for recommendations or searching YouTube when it comes to researching a product/service before making a big purchase.
Creator content tops the list of mechanisms most likely to make survey respondents try out a new product. Across 18-60 yo, 35% said influencer posts are the No. 1 way to get them to try new products. TV ads came in second at 30%. Paid social ads came in third at 12.9%.
The 35% average rises when looking at 18-29 age group. Here 44% say seeing an influencer post is the most likely to get them to try a new product.
62% of respondents say they are more likely to trust a sponsored post from an influencer over an A-List celebrity.
Top factors creators consider in brand collabs
According to a new Emplifi survey of 165 creators, influencers from
various industries rank the following factors in order of importance ahead of selecting a brand for a collaboration.
Personal interest in the brand
Budget / payment
These factors shouldn’t come as a surprise in an industry which prizes authenticity so highly.
Other stats from the Emplifi The 2023 State of Influencer Marketing Report:
7% of influencer content is sponsored.
90% of influencers are active on Instagram and 66% on TikTok, but only 4% of the influencers look to Twitter or Pinterest as a platform for potential brand partnerships.
Comparing influencers of different audience sizes, Emplifi data shows that the larger the influencer, the less frequently they share sponsored content on Instagram. On average XS influencers (10,000 followers or less) post 67% more sponsored content than XL influencers (1 million followers or more) and L influencers (100,000 - 1 million followers) on Instagram.
Dupes and the legal risks of frugal flexing
You’ve probably seen the TikTok trend of ‘Dupes’ - short for duplicates, the Gen Z abbreviation for knock-off versions of more expensive items. If not, Bella Hales wrote a good overview for THE FIFTH last month.
Driven by cost of living concerns consumers, notably GenZ, are seeking out cheaper alternatives to legit luxury labels. Chris Beer, data journalist at GWI refers to this as “Frugal flexing” - saying a key element of the “dupes” trend is showing off of products or lifestyles that look much more expensive than they actually are. #dupe has clocked up 3.8 billion views on TikTok #dupes has 2.1 billion views.
NOTE OF CAUTION: Promoting knock-offs is a risky business for creators. “In the UK, promoting any infringing product will very often amount to an infringement itself,” Nick White, partner at law firm Charles Russell Speechlys, tells the Financial Times.
When copied brands seek redress it’s often easier for them to target influencers than it for them to target Chinese companies manufacturing counterfeit goods. White explains in the FT “Brands will consider all angles when trying to strangle the trade in counterfeits and they may feel they are more likely to have success pursuing creators based in western jurisdictions.”
TikTok’s community guidelines, too, are clear on the app’s treatment of counterfeit goods “We don't permit the purchase, sale, trade, or solicitation of counterfeit goods on TikTok.”
Instagram to close its London hub
Just eight months after arriving in London Adam Mosseri has told local Instagram employees that the London hub is to close. According to the FT, Meta plans to cull 10% of its UK workforce. Mosseri brought his family to the UK in a bid to make Instagram a little less US-centric. Mark Zuckerberg’s ‘Year of Efficiency” has put pay to that aspiration for now.
Irish government staff advised to remove TikTok from work devices
Ireland's National Cyber Security Centre has recommended that government staff should not use TikTok on official devices according to Reuters. Interestingly Dublin houses several of TikTok’s European operations including data privacy and protection. Ireland is also home to a group which leads content moderation for the short-form video app.
YouTube launches Product Drops to drive creators’ sales via live shopping
Currently, if an influencer wants to promote products during her livestream she has first to upload offers in advance before going live.
The offers are visible to viewers before they're live. Not great if that creator wants to keep new products or offers under wraps so as to build excitement, and announce a product at a specific moment during a stream.
Enter Product Drops. With this new feature, creators will be able to release products for the first time during a livestream without disclosing them before the drop moment. Creators with connected Shopify stores or direct access to the Google Merchant Center of their connected stores will be able to set up Product Drops on YouTube using the Live Control Room. Watch the Creator Insider video for all the details.
TikTok shares top tips for creator collab content
TikTok has released a guide to help creators and brands make better content that drives business results. “Content that ditches the script, finds a natural hook, is strategic with trends, and picks the right
community will be the most impactful.” The video app analysed 300+ top TikTok Creator Marketplace videos to find common threads and teachable moments.
Bud Light debacle: corporate courage low point
CATCH ME UP QUICK: Anheuser-Busch-owned beer brand Bud Light worked with Dylan Mulvaney, a 26-year-old American actress, singer and content creator, on an influencer marketing campaign. Mulvaney is transgender. Old-guard fans of the beer didn’t like this. Ted Nugent declared it “the epitome of cultural deprivation.” Aged rocker Kid Rock filmed himself shootin’ up some beer cans in protest.
In March Alissa Heinerscheid Bud Light’s Marketing VP at the time (she’s since been put on leave) told the Make Yourself at Home podcast:
This seems clear: Bud Light entered its relationship with Mulvaney with its eyes wide open. They had both the mandate and the commercial imperative to go with this approach. Anyway, what could go wrong? After all, Mulvaney recently met U.S. President Joe Biden and only last month got a letter from Vice President Kamala Harris congratulating her on her 365th day of being a girl.
Insight into Gen Z behaviour also backs the decision. Consumers increasingly seek out brands that share the same values, beliefs and worldview as themselves before they become customers.
More than any other generation, Gen Z places high importance on inclusivity and attention to social issues. Heinerscheid’s quote above shows Bud Light’s motivation driving its decision to work with Dylan Mulvaney wasn’t to court controversy. It wasn’t to band-wagon LGBTQI+ attention. Heinerscheid’s words showed the beer brand was prepared to lead with passion and purpose.
No corporate bravery
But then controversy hit. Worst still, the bottom line was hit. Bud Light sales fell 17%. Volume plummeted by over a fifth (21%) in the week ended April 15. Rather than taking a stand on its values and beliefs Bud Light went silent. The beer company stopped posting to socials. Then silence turned to retreat. The CEO of parent Anheuser-Busch released a non-statement statement, writing, “We never intended to be part of a discussion that divides people.” The statement both goes against the strategy outlined by Heinerscheid and throws Mulvaney under the bus.
This week Heinerscheid, and her boss, Daniel Blake, were placed on leave following the Mulvaney furore.
At its best purpose-led influencer marketing humanises the brand, helps it remain relevant, and works towards achieving sustained long-term profitability. But purpose-led influencer marketing can’t be faked. Actions and words must be consistent. They are the foundations on which trust is earned.
In choosing to work with Mulvaney Bud Light sought to position its brand as one both inclusive and appealing to women as well as to men. However, they didn’t have a plan to counter controversy nor the bravery to stand by their brand ambassador.
In the past, we've seen brands take short-term hits for longer-term gains by living their values. Nike's tie-in with NFL player Colin Kaepernick back in 2018 is a good example. At the time social media became very noisy with videos of people burning their Nike trainers. This was picked up by mainstream media. However, the campaign resonated with Nike's target audience. Social media engagement rose. Brand equity rose. Crucially, sales rose (by circa 30%).
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