5 Influencers Reveal How The Coronavirus Has Hurt Their Business

As the economy tanks due to the COVID-19 pandemic, influencers are facing a drop in paid content and affiliate commission rates, forcing them to pivot.
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A data analysis published at the end of April forecast a drop in retail spending of nearly $550 billion dollars in 2020 due to coronavirus impacts, and many major fashion retailers are predicted to declare bankruptcy in the wake of store closures. Consumers are also feeling the squeeze, with over 33 million Americans filing for unemployment since March.

This drop in spending and discretionary income will hit many parts of the economy — including the influencer marketing model, which is already seeing the impacts.

Below, five influencers talk about how their businesses have already been affected by the pandemic, and how we can expect to see their business models shift in the months to come.

Consumers’ tolerance for paid content has changed since the pandemic

At a minimum, partnerships between influencers and brands will look very different post-quarantine. Moving forward, brands and influencers alike will need to take extra care in the messages they send to audiences. Prominent influencers have faced backlash as the divide between the “haves” and “have nots” grows larger in an uncertain economy.

“I went from making around $2,000 a month in advertising to $100 a month because advertisers aren’t paying as much.”

“In the early days of the crisis, we noticed some criticism of influencers who were moving forward with paid posts,” said Carrie Larson, the director of brand partnerships at Creator Lab, an online platform that connects brands with creators. “While consumers originally viewed these as insensitive, there’s been a shift in sentiment [throughout the coronavirus pandemic] of the general public and a better understanding that influencers are also people who need to pay rent.”

But the days of hawking five-figure designer goods and concierge travel services may be long gone. “Luxury goods are nearly impossible to promote on Instagram without followers seeing it as tone-deaf,” cites full-time fashion influencer and photographer Jenny Stumme. “Luxury ‘giveaways’ of designer bags that were popular before are now seen as grotesque in this economy.”

As consumer spending stalls, advertisers pay even less

Wired reported that there has been a 75% increase in shopping sessions on the LikeToKnowIt app — which allows followers to shop influencers’ recommended products and brands — during the pandemic, but display ad revenue for many influencers is way, way down.

“I went from making around $2,000 a month in advertising to $100 a month because advertisers aren’t paying as much to publish ads,” said Jennifer Aspinwall, a full-time influencer based in Los Angeles. “My rate per 1,000 views went from around $15 to $5.”

Influencers are also seeing a cut in affiliate commission rates (the amount of money an influencer makes when a consumer completes a sale). “Most of the affiliate programs I use on my site have either temporarily closed or dropped their rates significantly,” Aspinwall told HuffPost. “For example, Amazon dropped their commission rates to 1-3% on many items that used to be 8% commission.”

“Brands will absolutely invest in influencer marketing when this is over, but they will have a higher level of scrutiny as it relates to who they partner with and what they promote.”

Ad revenue and affiliates on our blog are down by over 40%,” said Nadia Whitney, one half of popular Instagram duo Couple Travel The World. Whitney said that, due to COVID-19, a brand pulled out of a campaign one day before it went live. The couple was unpaid for the work they’d already done to get the campaign off the ground.

Even if brands don’t cancel influencer activations (as they’re known in the industry), it’s unclear when business will return to normal, leaving many influencers in a holding pattern regarding future partnerships. Kachet Jackson-Henderson, an influencer and content creator, had a fashion brand postpone a partnership until all of their retail stores reopen nationwide.

Certain products and services are thriving during the pandemic, and influencers are turning in that direction

There is some good news for influencers: While fashion and beauty retailers may be in limbo, Larson said many brands on her platform are seeing an uptick in business, especially those that focus on DIY projects, home entertainment, food and grocery delivery, and group communication. Influencers will survive, provided that they pivot to products and services that make sense for the “new normal” of a quieter life at home.

While the future of traditional retail is in question (and arguably has been for years), brands of all shapes and sizes will still need to rely on influencers for marketing. “With little to no ad spending happening, brands ― especially direct-to-consumer brands ― are leaning into influencer marketing more now than ever to boost engagement,” said Lana Powers, founder of Powers PR, a boutique public relations agency that works with influencers. “Influencers are the ones who can eloquently and organically convey messaging without sounding tone-deaf.”

Larson agreed, saying, “The influencer marketing business model could be particularly well-suited in this time of at-home filmed content.” And, according to Larson, companies will eventually look to influencers to provide examples of when it’s safe to return to businesses, events and stores. “We’ll need influencers telling their followers, ‘Hey, it’s OK and safe to be out in public again.’”

But this time in lockdown isn’t without lessons for online business owners. Brand managers and influencers interviewed for this story all said diversification will be the one way to survive in changing times. Helen Owen, a mega influencer with over one million Instagram followers who previously traveled a lot, plans to expand her Youtube channel in response to changes wrought by COVID-19. Jackson-Henderson started hosting business accountability circles for aspiring entrepreneurs, and Aspinwall added new home and gardening content to her blog to further “recession-proof” it.

This pandemic has shown influencers that the traditional beauty, lifestyle and retail markets can no longer be their bread and butter,” said Nicole Jerick, who owns a PR consultancy. “Brands will absolutely invest in influencer marketing when this is over, but they will have a higher level of scrutiny as it relates to who they partner with and what they promote.”

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