What Happens to Social Media Influencers When Inflation Hits?

At first glance, Jacquelyn Mengel’s TikTok looks like any other influencer video.

She stares straight into the camera, holding up branded makeup products and discussing how she feels about each one. It’s a familiar scene on social media: someone trying to sell you something.

Only this time it’s not like that. She tells you what not to buy.

“Another influence video,” explains Mengel, 20, “so we can all save some money.”

The web personality walks her viewers through a handful of different beauty products that she doesn’t think are worth the price: a disappointing shampoo and conditioner, a $20 (RM87) makeup sponge. It’s hardly anti-consumer – Mengel suggests a cheaper alternative to every overpriced item – but the belt-tightening talk seems to have struck a chord with fans. Her video has over 750,000 views.

It’s all part of a trend that’s taken TikTok by storm in recent weeks — “disinfluencing” — with social media creators calling out trending products that aren’t worth the money during times of economic turmoil. And viewers who want to save a little money gobble it up: videos with the tag #deinfluencing have already been viewed 125 million times cumulatively.

That might not be what you’d expect from influencers who — posing on the prow of a yacht or a posh rooftop deck, dripping with designer jewelry and haute couture — aren’t known as the typically thrifty bunch.

But things could change if the economic headwinds change. America is in the midst of a financial slowdown that some experts say could spell a recession, and the influencer economy is little exempt. The third-party brands that keep the industry afloat are cutting their advertising budgets. Social media companies have started downsizing. And the content people post online is changing, too, as influencers promote imitation designer brands and tech workers document their own layoffs.

But the rise of influencer videos is perhaps the darkest omen of all: a blatant rejection of social media’s typically conspicuous consumption.

“It’s what people need to hear now,” Mengel, who lives in Salt Lake City, said in an email. She reports that she makes $3,000 (RM13,072) to $10,000 (RM43,575) a month from the app — about 70% of her income.

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“I definitely think the ‘de-influencing’ trend was triggered because of the recession that seems to be coming,” she explained. “Switching my focus to ‘disaffecting’ or offering more affordable options has actually grown my account tremendously over the past week.”

Mengel isn’t the only influencer taking her content in a more commercial direction.

Lauren Rutherglen, a Calgary-based TikToker who reviews outfits and beauty products, recently posted a de-affecting video of her own criticizing overpriced makeup. It has 205,000 views.

“Online consumers… want to pay for products that work for them, especially in our current economy,” Rutherglen said.

Influencers say the trend started sometime in the past few months, reaching critical mass in January, fueled by macroeconomic stress as well as a long-running backlash against pay-to-play product reviews. (A scandal in TikTok’s makeup community involving claims about false lashes added even more fuel to the fire.)

“There’s an issue of overconsumption when it comes to social media and I think people are starting to realize how damaging it is to our wallets and the environment,” Karen Wu, another de-influencer, said in one E-mail. “Add the economic downturn and … consumers are starting to tire of the rhetoric that they need every viral product they see.”

If disfluency is a sign of the times, it’s not the only one.

“Dupes,” or counterfeit versions of designer fashion products, have become similarly popular over the past month. TikTok videos tagged #dupe have totaled 2.7 billion views, with creators recommending, for example, $35 (RM152) Amazon sweatpants for their $128 Lululemon counterpart (557 RM) to replace.

“The whole ‘dupe’ trend… it’s just people offering options for higher value items that not many people can afford in the circumstances of the economy,” said Valeria Fridegotto, a TikToker who is both an influencer and dupe videos.

Current trends in online aesthetics, like leaving hair color natural or rocking logo-free merchandise, are similarly recession-friendly, say influencers.

The rise of viral trends that appeal to viewers with a little less spending money is partly a product of supply and demand. Influencers find out what their fans want and then make it for them; if you don’t do that, you fall behind.

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But the market downturn could also force influencers to curtail their own lives. Brand deals — the linchpin of for-profit social media — have dried up, according to some digital developers.

“It feels like there’s been a shift somewhere in the last (12) months as paid opportunities seem to have slowed down,” Los Angeles-based TikTok comedian Leo González said in an email. “Having that in mind changed my financial planning.”

Scarlett Bloom, who until recently was a porn actress on subscription-funded adult site OnlyFans, said she’s also noticed a sharp drop in her earnings since the summer.

“I’ve definitely had subscribers tell me straight out that they’re going to be unsubscribing for a while because of financial difficulties,” Bloom said in a Twitter message.

Media industry experts are forecasting slower growth for the advertising industry in 2023. Investment in creator-economy startups fell by a count of 79% year over year in the most recent quarter. Social networks are cutting back in the name of austerity creator programs. And layoffs at Snapchat, YouTube, Twitter, Pinterest, and Meta (which owns Facebook and Instagram) paint a portrait of a struggling industry, though some of that burn-off can be attributed to overzealous hiring during the pandemic.

Alyssa Kromelis, owner of boutique digital marketing agency XO Social, said many of her clients are withdrawing their influencer marketing campaigns. The pandemic has been a boom time for her, she explained, but conditions have worsened since the summer.

“When a dozen eggs are $8 (RM34) people can’t spend $45 (RM196) on a highlighter,” Kromelis said. “It doesn’t make economic sense.”

Marketing firm Social Currant, which focuses on connecting influencers with nonprofit and political brands, has also seen a decline.

“We’ve had a couple of clients (with) impacted budgets around, like, ‘Hey, we’re on pause for Q1 spending and want to continue in Q2,'” said Ashwath Narayanan, founder and CEO of Social Currant. But other clients, he added, are using influencers as a way to diversify their marketing strategies at a time of heightened stakes.

Representatives from several influencer management firms said reports of an industry downturn were exaggerated, and suggested social media marketing can offer a higher return on investment than more traditional ad buying, even as advertising budgets are cut elsewhere.

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“Our developers are busier than ever,” said Brian Nelson — co-founder of Network Effect, which works with short video creators on TikTok, Instagram and elsewhere — in an email.

Some creators are also optimistic. Mariale Marrero and Stephanie Ledda, two influencers who make content about makeup and beauty products, said business remains resilient, thanks in part to the latest product they’ve launched: a makeup collection by Marrero , a perfume by Ledda.

Kimberly Duman, chief executive of Marrero and Ledda’s management firm TalentX, said she didn’t see the price tag for brand deals shrinking — but there was a drop in the number of influencers a given brand is partnered with.

“Even when the economy is bad, people play more video games at home; they cook more for themselves; they do more for themselves; they’re streaming more entertainment,” Duman said. “We encourage our clients to think about these things… and how to incorporate that into their content.”

Indeed, a recession could offer new opportunities for some influencers.

Julia Belkin, who runs an account called “Freebies and More” on TikTok and Instagram, is as well positioned for that eventuality as a content creator can be.

your niche? Deal hunting videos.

“Since, I would say early January, my viewership has gone through the roof,” said Belkin, who currently has 63,000 followers on Instagram and a million followers on TikTok. “People love free stuff right now.”

Starting out as an extreme couponer, Belkin has been posting free and discounted products on social media for eight years now. In that time, it’s seen two periods of strong growth: once at the start of the pandemic and now as viewers seek home improvement hacks, gig economy side hustles, and of course, free merch.

“During times of uncertainty, no matter what that uncertainty is, people tend to be really inclined to find deals,” Belkin said.

“I’m in a relatively recession-proof, quote unquoted industry.” -Los Angeles Times/Tribune News Service