“Swipe up to get this exclusive product and use my code for 20% off”—are influencers maximizing their marketing potential?
Unless you’re extremely naive, you’ve probably come across these social media calls to action: Influencer marketing has carved out a huge niche for itself in the digital marketing space, projected to become a $38.2 billion industry by 2030 thanks to influencers using platforms like TikTok, YouTube, and Instagram to influence consumer choices.
But a new trend is emerging: influencers are no longer just promoting other brands’ products, they’re also launching their own products.
The magnetic power of influencers
To understand why influencers embark on brand building, it’s important to first acknowledge their enormous influence.
Influencers are the new celebrities of the digital world. They have immense power to influence consumer behavior through their posts, stories, and videos. With the number of social media users worldwide expected to swell to 5.85 billion by 2027, influencers are changing the rules.
Unlike brand ads that scream “buy me,” influencer recommendations often seem more sincere and authentic, or at least they seem that way, and feel like trusted advice from a friend. This sincerity, coupled with a savvy engagement strategy through DMs, comments, and livestreams, means followers are happy to open up their purse strings.
But there’s only so much influencers can do. With brand deals arriving in their DMs, some influencers are turning to influencer marketing platforms to connect with brands (and vice versa) and further their careers.
One example of such a platform is Thailand-based SHOUT!. SHOUT! matches influencers with brands, saving both parties time and streamlining campaign operations. To ensure that both parties are a good fit for each other, SHOUT! gathers insights from influencer accounts and suggests campaigns that fit their niche. Influencers can choose to work with brands they like, at set rates and terms. Agencies like SHOUT! can leverage their industry experience to help influencers advance their careers, landing them exclusive partnerships and collaborations that independent influencers don’t have access to.
The fact that over 75% of brands allocate their budget to influencer marketing is a testament to the power of influencers in the modern world. Clearly, the opportunities for influencers to collaborate with brands are huge. However, some influencers, realizing their influence and reach, are dreaming even bigger and targeting another field: launching their own brand or product.
Next chapter: Influencers become brand owners
The leap from endorsing products to launching a personal brand is nothing new. Creator brands have been popping up since the early days of social media. Consider Ipsy, which was founded in 2011 by original beauty blogger Michelle Phan and reported $500 million in annual revenue in 2019.
Fast forward to now, the influencer sphere has exploded, with 64 million influencers on Instagram in 2023. With a growing number of social media users (from 2 billion in 2015 to almost 5 billion in 2023), relatively low marketing costs, and high engagement with loyal followers, more influencers are poised to turn their passion projects into profitable businesses.
Unlike traditional sponsorship deals, having their own label allows influencers to deeply incorporate their own style and ethos into their products. They share a part of their world with their followers and earn a significant income in return.
Some of the most popular influencer brands include: Chiara Ferragni Brand Chiara Ferragni (2016 earnings: US$20 million) Kylie Cosmetics Kylie Jenner (projected to earn $360 million in 2024) Skims Kim Kardashian (projected to earn $750 million in 2023) Huda Beauty Huda Kattan (Reporting US$200 Million Revenue in 2023) Sweat Workout App by Kayla Itsines (sold for $400 million in 2021) Mr. Beast Burger MrBeast ($100 million in revenue in its first year after launch) I drew James Charles and Item Beauty By Addison Rae.
Challenges and opportunities
Despite the allure of starting their own brand, the transition to brand mogul hasn’t always been smooth sailing for influencers. Influencers face the same hurdles that entrepreneurs face: product development woes, supply chain nightmares, and quality control woes. Influencers-turned-industry-insiders must also grapple with the steep learning curve and financial risks of running a business. And since influencers themselves are fronting brands, maintaining their authenticity is paramount.
Social media, despite its benefits, is risky territory to tread. One wrong step and the digital court of public opinion could be turned against you. The risks are therefore much higher for influencers, as their influence can become a burden for their own brands. Lose trust and brand loyalty and your sales will plummet.
Case in point: beauty influencer James Charles and his brand “Painted” were “cancelled” following allegations of sexual misconduct (resulting in the end of his partnership with Morphe in 2021) and allegations that his brand’s products violated FDA regulations. When he launched “Painted” in 2023, netizens were divided on the brand, with some stating that they would not support it due to his grooming allegations.
That being said, the opportunity to monetize their personal brand and engage directly with their audience remains an attractive proposition for influencers. The direct-to-consumer model facilitated by social platforms offers influencers a unique advantage in promoting and selling products while avoiding traditional retail barriers and fostering a direct connection with their followers.
Market research shows that influencer-launched brands have the potential to be successful, especially among younger consumers: Nearly one-third of U.S. adults have already purchased a product from an influencer brand, with that number jumping to 53% for Gen Z adults and 47% for millennials. Many (80%) were satisfied with their purchase and would buy again, and nearly half reported a shopping experience that surpassed that of traditional brands. This trend highlights new opportunities for influencers to leverage their followings to launch successful brand ventures.
Will influencer brands be a big success?
The future looks pretty bright for influencer brands that have their finger on the pulse of consumer behavior: The explosive growth of influencer marketing provides fertile ground for the expansion of influencer-launched brands, especially among Gen Z consumers who rely heavily on influencer recommendations for purchasing decisions.
As influencers venture into the world of brand ownership, the question isn’t whether they’ll succeed, but how far will they go. The digital market is vast, and for an aspiring influencer, the possibilities are endless.
Header image from iStock
