Over the past years, influencers have become one of the top choices for social media marketers, providing brands an opportunity to reach millions of potential users practically overnight. The rising popularity of influencers has boosted the total spending in this market to record highs.
According to data presented by OnlyAccounts.io, brands have spent a whopping $90bn (£71bn) on influencer ads in the past five years.
Ad Spending in the Influencer Market Skyrocketed by 400% Since 2017
Marketers use influencer advertising because it is effective. The strong bond between influencers and their followers helps them to raise brand awareness, increase reach, traffic, and sales and improve engagement. At the same time, precise targeting and performance monitoring bring a higher investment return for each campaign. The State of Influencer Marketing 2023 report showed that most brands, or around 40%, work with up to 10 influencers.
With budgets growing fast and marketers seeing strong returns and increased customer trust, the total ad spending on this type of ad skyrocketed in the past five years. According to a Statista survey, brands and companies spent roughly $6bn (£4.7bn) on influencer advertising in 2017. Three years later, this figure jumped to over $16bn (£12.6bn). Statistic show 2021 saw the biggest year-over-year growth, with the annual spending on influencer ads jumping by almost 40% to $22.3bn (£17.6bn).
Last year, companies and brands spent another $26.3bn (£20.7bn), despite market growth slowing down. Statista expects this figure to grow by 17% to $30.8bn (£24.3bn) in 2023, showing a massive 400% increase since 2017. By 2027, the total ad spending in the influencer market will touch almost $48bn (£37.8bn).
Chinese, US, and UK Brands Make Two-Thirds of Total Ad Spending
Although brands worldwide use influencer ads to promote their products and services, most ad spending comes from only three countries. China, the world`s largest and fastest-growing influencer advertising market, has the biggest share in total ad spending. Between 2017 and 2022, Chinese brands spent a whopping $49bn (£38.6bn) on this type of advertising, far more than any other country. Statista expects this figure to grow by a further $16.7bn (£13.2bn) in 2023.
Total ad spending in the US influencer advertising market, the second-largest globally, is expected to hit nearly $5bn (£3.9bn) in 2023 after brands already spending $15.7bn (£12.4bn) in the past five years. The UK follows with $2.8bn (£2.2bn) in five-year spending and another $1bn (£7.9m) worth of influencer ads expected this year.
Statistics show the three countries generate two-thirds of total ad spending in the influencer advertising industry.
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