Front Burner - The Billion Dollar Influencer Economy

Episode Date: November 15, 2024

There are a reported 13 million full time influencers in the U.S. today. According to Goldman Sachs, the influencer economy is worth around $250-billion, a number expected to double by 2027. Despite its quick rise, the influencer economy remains a nascent industry that, in many ways, has no meaningful oversight or standard and practices. We're joined by Emily Hund, author of 'The Influencer Industry: the quest for authenticity on social media' to better understand one of our quickest growing cultural and economic sectors, and the need to professionalize the industry, before it's too late. In this episode, we refer to a previous installment of Front Burner, which you can find below:The Dark Side of Family Influencers Apple/SpotifyFor transcripts of Front Burner, please visit: https://www.cbc.ca/radio/frontburner/transcripts

In the Dragon's Den, a simple pitch can lead to a life-changing connection. Watch new episodes of Dragon's Den free on CBC Gem. Brought to you in part by National Angel Capital Organization, empowering Canada's entrepreneurs through angel investment and industry connections. This is a CBC Podcast. Hi, I'm Jamie Poisson. Every era has its defining industry. 1950s America was dominated by industrial workers and the automotive industry, for example.

But now, nearly halfway through the 2020s, it appears as though the influencer economy may be our next defining frontier. As of today, there are reportedly 13 million full-time influencers in the United States. That is a remarkable 7% of the American workforce concentrated in a field of work many know little about. It feels like very quickly the term influencer transitioned from something ephemeral and negatively stigmatized, socially as unserious, to an international force that could go on to define the future of our economic and social lives. Social media I feel like is like our new media outlet nowadays. I absolutely believe my content is making it to undecided voters. I would look at TikTok influencers in the fitness industry and kind of like feel like that's the kind of life I wanted to live. So first,

what does the term influencer even mean? Are these simply micro celebrities manipulating strangers to buy things? Are they selling a lifestyle, advertising dollars, and who is their largest constituency? And have we officially entered an era predicted by the artist Andy Warhol half a century ago, who said, in the future, everyone will be famous for 15 minutes. Emily Hund is the author of The Influencer Industry, the quest for authenticity on social media. And she's written for The Atlantic, The New York Times, and more about the influencer economy and the need to professionalize the industry before it's too late. Emily, hi, thanks so much for being here. Hey, thank you for having me. Let's start with the simple stuff. A lot of our listeners will recognize terms like influencer and creator from their own lives.

And I understand that these terms are kind of amorphous by nature. These are people often making content that can include everything, right? From getting ready with me videos to prank videos to mommy blogging to whole style videos after a day of shopping. But is there a central definition of what an influencer actually is? So for my purposes, I have always for my for the purposes of my research, I should say I have always thought of an influencer as a person who is creating content for social media in a strategic way in hopes of getting either financial or reputational gain from it. So these are people who are like intentionally cultivating audiences, you know, usually with the hope that they'll attract brand deals or other professional opportunities.

I am currently in Ohio with Hollister. I thought it would be really fun to film a day in my life on a brand trip so that you guys can kind of see what it's like and just like see the whole rundown. We got some packages, let's unbox them. Always open your packages with respect. Okay, let me chill. Got some slippers. First ones we got are shoe boxes. These look goofy, but they mad comfy. Everyone and their moms are talking about the Patrick Ta eyeshadow palettes. These are $57 where I live. Not even Kylie Jenner, I've seen her talk about this, but she has a $24.

It's called a Wet Shimmer Quad. And I want to see if it's the same exact dupe. There was a lot more, I guess I should say, coalescence around this definition earlier on in the earlier years of the industry. Because there was such optimism and sort of fixation on this idea that was sort of new at the time of digital influence and the idea that we could measure like how influential someone was and then correlate that to money. And so that is kind of where that term, I think, first got legs. And then over the last decade or so, it has become a little more slippery because the types of content people are creating has diversified so much, the platforms available, the ways

people are getting paid. It's just become a lot less precise in some ways. And there has been this sort of push push both from some people on the inside, as well as from platforms, I think, to reconceptualize these people as creators, which is a little less, I think it kind of obfuscates the strategy behind it a little bit and works to centralize this idea that, you know, we're just like passionate people doing what we love, having fun, connecting with people. And it kind of also, I think, encourages more people to, you know, potentially see themselves under that umbrella.

One thing I wanted to ask you about, you've written that this entire industry is really an outgrowth of the 2008 financial crisis and a holdover from the blogging era of the early aughts. And essentially then in 2008, millions of workers have been laid off and we're now at home and many found their way on social media. And just talk to me a bit about this moment and how it is many ways responsible for today's landscape. Yeah. So so prior to the financial crisis, like you mentioned, blogs had been gaining steam. What's happening for them? You know, there really weren't a lot of good viral videos out this week. So I had to use some of last week's rejects, starting with this skater guy who does an amazing rail slide

ouch now let that be a lesson to you forum emo hair is not a good substitute for a safety helmet um never they were never you know as you know they never had the audiences that you know social media would later bring but um there was this sort of like slowly growing idea that um you know, social media would later bring. But there was this sort of like slowly growing idea that you could go online to publish your thoughts, opinions, reporting, creative production, you know, whatever that may be on a blog and that you could find audiences there. And then, on the audience side, there was this sort of growing idea that bloggers were interesting and cool and, you know, had maybe had like a perspective to offer that you weren't getting from other, you know, major mainstream outlets. And then when the financial crisis happened, that was a huge,

it was a huge moment, like a pivotal moment of both material change. So like you mentioned, millions of people lost their jobs, people were at home, especially in the creative industries, there was a huge amount of pressure, I think, for people to turn to the internet to try to like keep themselves professionally afloat when they, you know, while they were navigating their next steps. And then, you know, even people outside the creative industries as well, you know, this idea of like, oh, maybe I could create content for the internet and find my way out of this financial and professional situation that I'm in. So there was that moment of like material pressure, as well as like a pivotal moment, I think more like existentially for people where the, you know, an economic crisis of that magnitude really forced, you know, many people to rethink their relationship to their work. You know, there, it was a moment

of rupture as far as public trust in institutions and sort of the traditional modes of doing things. You know, people understandably, you know, when you're unceremoniously laid off or you lose your home or, you know, all of these things are understandably, you know, when you're unceremoniously laid off or you lose your home or, you know, all these things are understandably, you know, they grow suspicious of these these sort of narratives that they had previously believed, whether it was, you know, what it meant to have a stable career and that sort of thing. And so it was it was this moment where there was, you know, financial pressure to figure out your way out. And also, I think people began to be more open in that moment to receiving that type of non-traditional content. I would imagine that the pandemic might have also served as a pretty significant historical period in the arc of, you know, the story of the influencer. Would you agree with that?

Just intuitively, I would think that. Yeah. Oh, totally. And you can see this over like the sort of arc of the short-ish history of the influencer industry over the last, you know, 15 plus years or so. So we have like these major moments, like the 2008 financial crisis, and then, of course, the pandemic. And in between, there are moments that are not quite as severe, but other moments where the industry has faced challenges. You know, for example, like another sort of easy one to point to is in the late 2010s, when there started to be a lot of public discussion suddenly about Facebook and, you know, in the wake of like Cambridge Analytica, and then the whole festival fiasco, you know,

there all of a sudden, there were like a few things happening in the public eye that started to sort of cause people to say, like, what is going on here, and other moments, other moments like that. But every time over the course of the history of the industry, that there has been a sort of like challenge, whether like an economic challenge or cultural challenge to what was happening, the people working within the industry find a way to like expand and they find a way to like continue to grow, continue to be successful even in the face of these challenges. And so that of course is what we saw happen in 2020. Again, this moment where lots of people are at home, of course, under very different circumstances, deep uncertainty, you know, moment of, again, existential uncertainty, material pressures, and the introduction of

new platforms like TikTok. That's when TikTok really started to, you know, explode. And these moments of uncertainty almost always lead to the industry growing and becoming more successful. And I think it's because, I mean, there are a multitude of reasons for that, but in the most like meta sense, I think it's because the industry promises and has promised like since its founding that like, this is a way to feel in control of your life. This is a way to feel secure and find fulfillment. Let's fast forward to this, to today. There are 13

million full-time influencers in the United States alone. That is 7% of the American workforce. According to Coleman Sachs, the influencer economy is worth around $250 billion, a number expected to double by 2027. And just, you know, this is an industry already several orders of magnitude larger than the music industry. And how do you see these numbers? Do they strike you as tenable? Does this feel like a bubble likely to burst? That's a good question. I sort of resist that narrative of like a bubble about to burst only because like I mentioned the industry you know there's been moment many moments before where people have thought okay this is going to be it like we can't you can't keep going and like we you know the industry finds a way to keep going

and so it's like I don't think that yeah we can keep going yeah right. And so I don't think it's it is going anywhere, especially, I guess, to be more precise. The thing that I don't think is going anywhere is this practice of people cultivating audiences online through strategically produced content and then using those audiences, you know, leveraging the eyeballs that they get for financial and reputational gain. So that very basic practice of being an influencer or a creator, I don't think is going anywhere. Now, the platforms, you know, might change, the formats might change. But this practice, I think, is here to stay for-changing connection. Watch new episodes of Dragon's Den free on CBC Gem. Brought to you in part by National Angel Capital Organization. Empowering Canada's entrepreneurs through angel investment and industry connections.

Hi, it's Ramit Sethi here. You may have seen my money show on Netflix. I've been talking about money for 20 years. I've talked to millions of people, and I have some startling numbers to share with you. Did you know that of the people I speak to, 50% of them do not know their own household income? That's not a typo. 50%. That's because money is confusing.

In my new book and podcast, Money for Couples, I help you and your partner create a financial vision together. To listen to this podcast, just search for Money for Couples. This is still a pretty nascent industry, right? Which hasn't really had the time to mature or professionalize and lockstep with all of that growth. And mature or professionalize and lockstep with all of that growth. And because of that, this is all kind of a wild west where there's little regulation, oversight, standardization. And I know that you've written that the industry is a global force that, quote, sometimes behaves like a ramshackle startup with little professional cohesion and inconsistent consequences for unfair play. And just talk to me a bit about what you mean by that and what you think should happen.

So the most obvious example of like the uneven consequences are the ways in which, you know, particularly in the United States, which that's where I'm based and that's where my research was done. So that's, again, for better or for worse, where most of my examples come from. But for example, you know, this idea that the FTC tends to target like super celebrities, mega influencers when they run afoul of transparency regulation. So we've seen, you know, people like Kim Kardashian get targeted multiple times. Lindsay Lohan, you know, people like that recognizable names that, you know, they'll go after these people and, you know, make a public example of them, I think, in hopes of the fear then trickling down to, you know, less famous influencers and to sort of like remind them

like, oh, you know, there are regulations that, you know, you need to be transparent when you have a material relationship with a brand and, you know, and things like that, because it's just impossible to to actually oversee all of this content that's flooding social media every day. Like, you know, I don't even know how you would do that. So there's, so that's what I mean by the uneven consequences. And sorry, and just for clarity, like when you say they're running afoul of regulations, like, can you just give me an example? Yeah. So, so basically there is, you know, there are regulations in place that require people to make their material

relationships with brands. It has to be clearly and conspicuously clear. This post is sponsored by Skims. Yes, exactly. And the line is clear and conspicuous. So you have to be really upfront about the fact that this brand has paid you or this brand supplied, you know, this outfit you're wearing. And so anything that's vague, like just like a hashtag thanks or like that kind of thing that does not pass muster. And so and so yeah, but it's,

you know, it's really impossible to oversee all of that. And so the industry is really reliant on, you know, brands wanting to make it a priority because, you know, maybe they're afraid of, you know, the FTC targeting them. And influencers don't really have, you know, there's it's not like there's professional onboarding when you become an influencer. And so they're like, here's the HR department. This is right. And so influencers, especially because a lot of these people are young, they're not always like informed about the fact that there actually are rules that they're supposed to be following.

And so a lot of influencers just aren't informed or, you know, it's very easy to, you know, be informed, but just choose not to comply because it is unlikely unless you are very famous. It's unlikely that you're going to get called out. And I I often think back to like prior media industries, you know, it's, you know, industries like, you know, newspapers, television, the advertising industry, there was a time in history where all of these industries were new and, and audiences, you know, people, the citizens, as well as the professionals who were creating these industries, like there had to be negotiations really about what do we want this to be? What is this role?

And how are we going to, you know, try to make that vision a reality? And I think that's, it's well past time that the influencer industry do such a thing. I mean, it's interesting to hear you talk about that as something that I've thought about a lot. We've talked about it a lot on this team, this idea that these influencers are the vanguard of this new moment in media and journalism, one where people might feel like disillusioned by the mainstream press and they seek their news from influencers whose voice they trust as opposed to from people like me, right? And there are real implications to that. Yeah, I mean, I do have to follow a lot of rules as a journalist. I cannot take really anything, be paid for anything outside this job.

I think there are good reasons for that. But there have been examples in the influencer industry that have really created a lot of problems, right? I wonder if you could tell me about the one with Sheehan, just to kind of illustrate this point. Yeah, so that was a big kind of hullabaloo about a year or so ago, where Shein, which is the massive fast fashion retailer based in China, they sell items for like beyond bargain basement prices. Like, you know, we're talking like five dollars for a shirt kind of thing. And social media is like a huge driver of sales for them. And and they've seen, you know, tremendous growth in North America in the last few years. And but, you know, there has been a lot of criticism of Shein saying, you know, questioning,

you know, their pricing and how are these goods actually being made? You know, what's the labor conditions in the factories? Like what's really going on here? And and so they decided to sponsor an influencer trip. China trip has been one of the most life changing trips of my life. Getting to see the whole process of Shein clothing from beginning to end with my own two eyes was so important. I was really excited and impressed to see the working conditions. I guess takeaway from this trip is to be an independent thinker, get the facts and see it with your own two eyes. They paid for a bunch of influencers to come over. You know, they gave them a tour of some of their buildings. Again, like you said, it was a factory tour and all this and everything was beautiful and the workers were happy and all of that. But and so and then the influencers post all this content. Look at what's this, this, this is amazing. But then, then there was, you know, understandably, a huge backlash to this influencer trip and people saying, like, you just got taken for a ride, you know, they, this was staged, like, you know, people were, you know, not buying what the influencers were saying. Although I do worry that it's still out there, right? This is the kind of stuff that I guess gets me more as a journalist, that people still saw it.

You know, we talked about how this is, what, 7% of the American workforce now. And I really want to talk to you about the fact that this is especially so for school-age children. There is a lot of data out there which shows that a huge percentage of American youth desire to be YouTubers or influencers. I would imagine it's not very different in Canada. it's not very different in Canada. And it has gotten to the point where parents are now sending their children to so-called creator camps where kids can learn the skills necessary to become successful online creators. And what do you make of the appeal that all of this has on children? And what might you say to parents that feel, you know, very uncomfortable about all of it. Yeah. So on, you know, on the one hand, I think it's totally understandable why kids are attracted to this.

Again, this is an industry that since the beginning has portrayed itself as being all about like fun, following your passions, getting paid for it, you know, getting all this great free stuff. But the difference is, you know, I all this great free stuff. But the difference is, you know, I think with prior generations, like the hurdles were higher and more obvious. So, you know, if a kid was like, Oh, I want to be a rock star, like, the parents would be like, Okay, yeah, sure. You know, good luck with that. And let me tell you about all the reasons why I think that's a bad idea. Yes. And in this case, it's kind of like grab a cell, grab your iPhone and a ring light, and you're good to

go. Right? Yeah. Yeah. Like, well, I guess we could give it a try. Like, you know, you never you never know. And I think also, you make one video that goes viral. You know what I mean? Yeah. Yeah. Yeah. And so, so I understand I understand like the pressure that parents might feel too, where it's like, Oh, my kid is telling me this is, you know, his or her dream. And like, what if it, what if they could really do it? Um, who am I to stand in the way maybe or something? But, um, I will say that I think, you know, over time, most adults have become pretty well versed in the pitfalls of being a child star, whether, you know, working in Hollywood or a musician or, you know, things like that. People have become aware of the problems associated with that. And I would like to

like, you know, I think it's worth saying that there are a lot of similar risks of, you know, trying to make it as an influencer as a child, if not heightened risks, because, again, you there's very little barriers. And so, you know, the feedback that you're getting from the audience is immediate and delivered to you personally instead of your manager in Los Angeles or whoever, you know? And, and so the, the perils I think are heightened and much more apparent. And we also don't have, like our laws haven't caught up to this as a form of labor. don't have, like our laws haven't caught up to this as a form of labor. And so, you know, in the US, and I think in many countries, there are laws protecting, you know, child performers, you know, requiring they only work a certain amount of hours, making sure that they're getting tutored or, you know, attending a certain amount of schooling, protecting their financial interests, a certain

amount of their earnings have to go into a trust, that sort of thing. We just don't have that. It's coming along, like some states in the US have started to pass laws and I know there are discussions happening. Yeah, but few and far between, right? I'll just note for our listeners, we did an episode looking at the harms that have been caused by this, you know, children who have really struggled with it. And I'll drop that link in our show notes if people want to go back and listen. It was really interesting. Final question for you, Emily. We've talked about what influencers are, the need to professionalize this nascent industry.

But, you know, I wanted to end this conversation by asking you about something else that I have been thinking about, we've been thinking about a lot, is what do you think our abiding need for influencers, the fact that this industry even exists at all, say about us as a people, right? What does this desire for a more personalized entertainment experience, say, about the moment that we find ourselves in today, about the way our consumer or viewer habits have changed? I think that people are overwhelmed. And I think this has been apparent to me for years, you know, in the course of doing my research. years, you know, in the course of doing my research, it's been apparent for a long time that I think people are really overwhelmed in today's world. Like it's information overload. It's like everything overload. And so I think in some ways, influencers solve like a very practical problem for people which is again that like that shopping

aspect yes um where you know when you are just like inundated with so much advertising so many choices for every you know you can spend your whole life trying to decide like what toothbrush to buy yeah or you can listen to someone who's great at toothbrushes tell you or you think is great at toothbrushes tell you what toothbrush or what sweater from Zara to buy. Yes, I get that. if I can find a person out there who seems kind of like me, who I feel like I relate to, and they can tell me what toothbrush they bought and like what boots they bought for winter. And I'm just going to copy their choices because it's going to make my life easier. And so I think that's part of it. And then, you know, again, it speaks to like these timeless themes of like human existence of like our need for connection, our need to feel safe and secure, and our need to feel like we have some measure of control over our lives.

I think the industry like really speaks to all those things, because even as, you know, inauthentic or surface level as these relationships can be at times, they offer a feeling that a lot of people are missing in their, in their everyday lives. And so I think it just really speaks to like these really time, yeah, timeless human needs. And, you know, the, the industry has just found a way to sort of give people what they're yeah like tap into what people desire um emily this is great i really enjoyed this conversation thank you so much for coming by thank you it's my pleasure All right. That is all for this week.

I'm Jamie Poisson. Thanks so much for listening. Frontburner was produced by Joytha Shankupta, Matt Almha, Matt Muse, Ali James, Kieran Oddshorn,

and Aja Sautter. Sound design was by Mackenzie Cameron and Marco Luciano. Music is by Joseph Chabison. Our senior producer is Elaine Chao. Our executive producer is Nick McCabe-Locos. Have a great weekend, everybody, and we'll talk to you on Monday.

Thank you.