In the ever-evolving landscape of digital marketing, the creator economy has emerged as a powerful force, reshaping the way brands connect with consumers. A recent study conducted by LTK in partnership with Northwestern University’s Retail Analytics Council highlights the profound impact of creator marketing, an industry now estimated at $21 billion.
Brands and retailers are investing more than ever in creators because they are seeing the critical role they play in brand building across the entire marketing funnel, from awareness to consideration and conversion. Globally, marketers are expected to spend more than $32 billion on influencer marketing in 2024, and influencer spend is now outpacing traditional ad investment, with 80% of brands saying they increased creator budgets in 2023.
A whopping 92% of brands plan to increase their spending on creators in 2024, and 36% plan to spend at least half of their entire digital marketing budget on creators. When asked where their marketing dollars are shifting, creator marketing and connected TV shared the top position overall for investment growth, beating out channels like paid search and paid social.
The study also found that dollars are being moved from digital ads to creator marketing because the scale of creator marketing has proven to be more efficient when compared to side-by-side, all-cost measurement. In fact, 100% of big box and grocery brands said creators will take a higher percentage of the budget or an increased role in 2024 marketing strategies.
Creator trust is driving purchase decisions
Consumers across various industries have come to trust creators when making their purchasing decisions. A staggering 73% of Gen Z, 68% of millennials and 57% of the general population look to creators when making purchase decisions. Because of the significant trust creators have built with their communities, the majority of surveyed brands said consumers are turning to creators the most compared to social media ads and celebrities. When it comes to social media ads, 95% of CPG brands use creator-generated content.
Brands recognize creators’ full-funnel impact
Creators have evolved into valuable assets for brands, capable of driving substantial business impact. The study reveals that brands are leveraging creators to support various strategies, including increasing repeat purchases and basket size, boosting brand and product recognition, expanding consideration among new audiences, fostering loyalty and enhancing retention. With consumer trust in creators playing a pivotal role, more than half of fashion brands and 45% of beauty brands reported that creators have improved their brand perception.