The Rise of the Influencer Economy

The business of influencing is not frivolous. It’s serious.

Luxury brands used to speak in monologues. News about their latest collections1
flowed one way—from the boardroom, via billboards2 and editorial spreads3 in
glossy4 magazines, to the buyer. In the age of social media, the buyers are talking
back. One group, in particular, is getting through to fashion bosses: influencers. These
individuals have won large followings by reviewing, advertising and occasionally
panning5 an assortment of wares6. Their fame stems not from non-digital pursuits, as
was the case with the a-list stars who used to dominate the ranks of brand
ambassadors, but from savvy use of Instagram, Snapchat or TikTok. Their posts seem
frivolous. Their business isn’t.
For consumers, influencers are at once a walking7 advert and a trusted friend.
For intermediaries8 that sit between them and brands, they are a hot commodity. For
the brands’ corporate owners, they are becoming a conduit9 to millennial and Gen-z
consumers, who will be responsible for 70% of the $350bn or so in global spending
on bling10 by 2025, according to Bain, a consultancy. And for regulators, they are the
subject of ever closer scrutiny. On March 29th news reports surfaced that China’s

1
paternalistic11 authorities are planning new curbs on how much money internet users
can spend on tipping their favourite influencers, how much those influencers can earn
from fans, and what they are allowed to post. Taken together, all this makes them
impossible to ignore.
Few reliable estimates exist of the size of the influencer industry. One in 2020
from the National Bureau of Statistics in China, where influencers gained prominence
earlier than in the West, estimated its contribution to the economy at $210bn,
equivalent to 1.4% of gdp. As with many things digital, the pandemic seems to have
given it a fillip12, as more people were glued to their smartphones more of the time.
EMarketer, a firm of analysts, estimates that 75% of American marketers will
spend money on influencers in 2022, up from 65% in 2020 (see chart). Brands’ global
spending on influencers may reach $16bn this year, more than one in ten ad dollars
spent on social media. Research and Markets, another analysis firm, reckons that in
2021 the middlemen13 made $10bn in revenues globally, and could be making $85bn
by 2028. The ranks of firms offering influencer-related services rose by a quarter last
year, to nearly 19,000.

2
 The influencer ecosystem is challenging the time-honoured14 tenets15 of luxury-
brand management. Apart from being one-directional, campaigns have tended to be
standardised, unchanging and expensive. An exclusive group of white actresses with
the right cheekbones was supposed to signal consistency, as well as opulence16. The
same smile from the same photograph of the same Hollywood star would entice
passers-by to purchase an item for many years. Julia Roberts and Natalie Portman
have been the faces of Lancôme’s bestselling La Vie est Belle perfume and Miss Dior,
respectively, for a decade. Stars and brands alike are tight-lipped17 about how much
money changes hands, but the figures are believed to be in the millions of dollars.
One report put the amount spent by lvmh on the entire Miss Dior campaign at “under
$100m” in the past year.
Such star-led campaigns can feel aloof18 to teenagers and 20-somethings who
prize19 authenticity over timeless20 glamour. And influencers, with their girl- or boy-
next-door charm, offer this in spades—for a fraction of the fee of a big-name star. The

3
best ones are able to repackage a brand’s message in a way that is harmonious with
their voice, their followers’ tastes and their platform of choice (Instagram is best for
all-stars with over 2m followers and TikTok for niche “micro-influencers” with up to
100,000 followers and “nano-influencers” with fewer than 10,000).
Influencers are particularly adept21 at navigating22 social-media platforms’
constantly evolving algorithms and features. For example, when Instagram’s
algorithm seemed to begin favouring short videos (“reels”) over still images, so did
many influencers. As social-media apps introduce shopping features, influencers are
combining entertainment and direct salesmanship. Such “social commerce” is huge in
China, where it was invented. In October 2021 Li Jiaqi, better known as Lipstick
King, notched23 up nearly 250m views during a 12-hour streaming session in which
he peddled24 everything from lotions25 to earphones ahead of Singles’ Day, that
country’s annual shopping extravaganza26. He and Viya, a fellow influencer,
flogged27 $3bn-worth of goods in a day, half as much again as changes hands daily on
Amazon.
Many influencers manage their production in ways that traditional ambassadors
never could. They are video editors, scriptwriters, lighting specialists, directors and
the main talent wrapped into one. Jackie Aina, whose beauty tips attract over 7m
followers across several platforms, explains the importance of high-quality equipment
that can show texture, accurate colour grading—“Not to mention the lighting.” Ms
Aina’s 30-second lifestyle TikToks can take hours each to make.
This production value, combined with access to the influencers’ audiences,
translates into value for the brands. Gauging how much value, precisely, is an inexact
science. Launchmetrics, an analytics firm, tries to capture it by tracing a campaign’s
visibility across print28 and online platforms. The resulting “media impact value”
(miv) reflects how much a brand would need to spend to gain a given degree of
exposure—itself indicative of the expected return from a marketing drive. On this
measure, which brands use to see how they stack up against rivals, the three-day
wedding of Chiara Ferragni, an Italian with 27m Instagram followers, a fondness for

4
pink and a Harvard Business School case study, generated a total of $36m in miv for
brands including Dior, Prada, Lancôme and Alberta Ferretti, which made the
bridesmaids’ gowns. That compares with $25m for the more conventional—and
almost certainly pricier—video campaign for Louis Vuitton’s autumn/winter 2021
collection for which the fashion house enlisted29 bts, a hit South Korean pop group.
As well as new opportunities, influencers present new risks, especially for brands
whose luxury identities rely on price discipline and exclusivity. Influencer-led live-
streamed shopping events in China by Louis Vuitton and Gucci were ridiculed for
cheapening30 their brand. And full-time influencers’ large teams can run up quite a
tab31. Adam Knight, co-founder of tong Global, a marketing agency with offices in
London and Shanghai, notes how Lipstick King’s live-streaming success has fuelled
demand for his services among brands—but also his own kingly demands. Mr Li’s
fees, commissions and exclusive perks31 only pay for themselves if the event is a
smash hit32. Otherwise, Mr Knight says, the client’s profit “just completely erodes”.
There are more indirect costs to consider, too. A host33 of younger and more
unpredictable brand ambassadors is harder for brands to control than one or two
superstars on exclusive contracts with good-behaviour clauses. Though influencers’
shorter contracts make them easier to replace should they step out of line, untoward34
antics35 can be costly. Before the latest clampdown36 Chinese authorities had already
forced 20,000 influencer accounts to be taken down last year on grounds of “polluting
the internet environment”. Luxury brands are reportedly cutting their influencer
spending in China in response. Regulators around the world, as well as some social-
media platforms, are beginning to clamp down on influencers who do not tag their
content as advertorials37.
Such worries explain why some luxury houses are leery38 of influencers.
Hermès, the French purveyor39 of scarves and Birkin bags, maintains a social-media
presence that is conspicuously influencer-free. But more feel the benefits outweigh
the costs. Despite Louis Vuitton’s and Gucci’s live-streaming flops40, lvmh and
Kering, the brands’ respective owners, continue to rely on influencers to create social-

5
media momentum. To be a top-ten brand, says Flavio Cereda-Parini of Jefferies, an
investment bank, you have to know how to play the digital game. If you don’t, “you
are not going to be top ten for very long.”
(Extracted from The Economist, April 2nd 2022 Edition)

Notes:
1. collection n.
[countable] a range of new clothes or items for the home that are designed, made
and offered for sale, often for a particular season （常为季节性推出的）系列时装
（或家用品）
►Armani’s stunning new autumn collection
款式新颖靓丽的阿玛尼秋装系列
2. billboard n.
(BrE also hoarding) (especially NAmE) [countable] a large board on the outside
of a building or at the side of the road, used for putting advertisements on 大幅广告
牌
3. spread n.
[countable] an article or advertisement in a newspaper or magazine, especially
one that covers two opposite pages （尤指横贯两版的）文章，广告
►The story continued with a double-page spread on the inside pages.
这篇报道在报纸的内页有横贯两版的后续部分。
4. glossy adj.
smooth and shiny 光滑的；光彩夺目的；有光泽的
►glossy hair
光亮的头发
►a glossy brochure/magazine
用亮光纸印刷的小册子、杂志
5. pan v.
(informal) [transitive, usually passive] to severely criticize sth such as a play or a
film 严厉批评，抨击（戏剧、电影等）
~ sth

6
 ►The television series was panned by critics and viewers alike.
这部电视剧受到评论家和观众的一致批评。
6. ware n.
wares (old-fashioned) [plural] things that sb is selling, especially in the street or
at a market （尤指小商贩在大街上或市场里出售的）物品
►He travelled from town to town selling his wares.
他走乡串镇出售自己的货品。
7. walking adj.
(informal) [only before noun] used to describe a human or living example of the
thing mentioned 似人的；活的
►She’s a walking dictionary.
她是部活字典。
8. intermediary n.
[countable] a person or an organization that helps other people or organizations
to make an agreement by being a means of communication between them 中间人；
调解人
~ (between A and B)
►Financial institutions act as intermediaries between lenders and borrowers.
金融机构充当贷方和借方的中间人。
►All talks have so far been conducted through an intermediary.
到目前为止所有的谈判都是通过调停人进行的。
9. conduit n.
(formal) [countable] a person, an organization or a country that is used to pass
things or information to other people or places 中转人；中转机构；中转国
►The organization had acted as a conduit for money from the arms industry.
那家机构充当了从军工业向他处中转资金的渠道。
10. bling n.
(informal) [uncountable] expensive objects such as jewellery that are worn in a
way that is very easy to notice 闪亮风潮的穿戴
11. paternalistic adj.

7
 (sometimes disapproving) a paternalistic company or organization is one in
which the people in charge protect the workers and give them what they need, but do
not allow them to make important decisions
►a paternalistic employer
家长作风很强的雇主
12. fillip n.
(formal) [singular] a thing or person that causes sth to improve suddenly 起推动
作用的人（或事物）
~ (to/for sth)
►A drop in interest rates gave a welcome fillip to the housing market.
降低利率给房屋市场带来利好刺激。
13. middleman n.
[countable] a person or a company that buys goods from the company that makes
them and sells them to sb else 中间商；经销商
►Buy direct from the manufacturer and cut out the middleman.
直接从生产厂家购买，绕过中间商。
14. time-honoured adj.
(especially US -honored) respected because it has been used or done for a long
time 古老的而受到尊重的；历史悠久的；由来已久的
►They showed their approval in the time-honoured way.
他们以传统的方式表示同意。
15. tenet n.
(formal) [countable] one of the principles or beliefs that a theory or larger set of
beliefs is based on 原则；信条；教义
►one of the basic/central tenets of Christianity
基督教的基本、主要信条之一
16. opulence n.
(formal) [uncountable] a display of great wealth 富丽堂皇；富有
►the opulence of Ancient Rome
古罗马的富丽堂皇

8
 ►a life of opulence
富裕的生活
17. tight-lipped adj.
not willing to talk about sth 缄口不语的；守口如瓶的
►Despite the rumors, government officials remained tight-lipped today.
尽管有谣言，政府官员今天仍保持缄默。
►Diplomats are remaining tight-lipped about the negotiations.
外交官们对此次谈判保持沉默。
18. aloof adj.
[not usually before noun] not friendly or interested in other people 冷漠；冷淡
►He was a cold man, aloof and distant.
他是个冷漠严肃的人，令人难以接近。
19. prize v.
[transitive, usually passive] to value sth highly 珍视；高度重视
~ sth
►an era when honesty was prized above all other virtues
尊诚实为美德之首的时代
~ sth for sth
►Oil of cedarwood is highly prized for its use in perfumery.
雪松油可以用于制香水，因此十分珍贵。
20. timeless adj.
(formal) not appearing to be affected by the passing of time or by changes in
fashion 不受时间影响的；无时间性的；永不过时的
►her timeless beauty
她永恒的美丽
21. adept adj.
good at doing sth that is quite difficult 内行的；熟练的；擅长的
~ (at/in something) | ~ (at/in doing something)
►He became adept at getting even the shyest students to talk.
他甚至能使最害羞的学生开口说话。

9
 22. navigate v.
[transitive] to find the right way to deal with a difficult or complicated situation

正确处理，有效应对（困难或复杂的情况）
~ sth
►A solicitor will help you navigate the complex legal system.
律师会帮助你熟悉复杂的法律制度。
23. notch v.
(informal) [transitive] to achieve sth such as a win or a high score 赢取；获得
~ sth (up)
►The team has notched up 20 goals already this season.
这支球队本赛季已经攻进 20 个球。
24. peddle v.
[transitive] to try to sell goods by going from house to house or from place to
place 挨户销售；巡回销售
~ sth
►He worked as a door-to-door salesman peddling cloths and brushes.
他是一个挨家挨户兜售布和刷子的推销员。
►to peddle illegal drugs
贩卖毒品
25. lotion n.
[countable, uncountable] a liquid used for cleaning, protecting or treating the
skin 洁肤液；护肤液；润肤乳
►(a) body/hand lotion
护肤、护手乳液
►suntan lotion
防晒露
26. extravaganza n.
[countable] a large, expensive and impressive entertainment 铺张华丽的娱乐表
演
►a musical extravaganza

10
 一个音乐盛会
27. flog v.
(BrE, informal) [transitive] to sell sth to sb 出售（某物给某人）
~ sth (to sb)
►She flogged her guitar to another student.
她把吉他卖给另一个同学。
~ sth (off)
►We buy them cheaply and then flog them off at a profit.
我们低价买下这些，然后卖出获利。
~ sb sth
►I had a letter from a company trying to flog me insurance.
我收到一家公司的信，向我推销保险。
28. print n.
[uncountable] used to refer to the business of producing newspapers, magazines
and books 印刷行业；出版界
►the print media
印刷媒体
►print unions
出版业工业
29. enlist v.
[transitive] to persuade sb to help you or to join you in doing sth 争取，谋取
（帮助、支持或参与）
~ sth/sb (in sth)
►They hoped to enlist the help of the public in solving the crime.
他们希望寻求公众协助破案。
~ sb (as sth)
►We were enlisted as helpers.
我们应邀协助。
~ sb to do sth
►We were enlisted to help.

11
 我们应邀协助。
30. cheapen v.
[transitive] to make sth appear to have less value 使贬值；贬低
~ sth
►The movie was accused of cheapening human life.
有人指责这部电影贬低了人的生命价值。
31. tab n.
[countable] an amount of money that you owe, or a record of an amount of
money that you owe （待付的）账单，账款
►a bar tab
酒吧账单
►The tab for the campaign was nearly $500 million.
活动的费用将近 5 亿美元。
►I’ll put it on your tab and you can pay tomorrow.
我将记在你的账上，你可以明天支付。
►He ran up a $4,000 tab in long-distance calls.
他花了 4000 美元打长途电话。
32. perk n.
(also formal perquisite) [countable] [usually plural] sth you receive as well as
your wages for doing a particular job （工资之外的）补贴，津贴，额外待遇
►Perks offered by the firm include a car and free health insurance.
公司给予的额外待遇包括一辆汽车和免费健康保险。
►(figurative) Not having to get up early is just one of the perks of being retired.
不必早起只是退休生活的好处之一。
33. host n.
[countable] a large number of people or things 许多；大量
~ of sb/sth
►a host of possibilities
多种可能性
►Lavender oil can relieve a whole host of ailments.

12
 薰衣草精油可以缓解一系列的疾病。
34. untoward adj.
unusual and unexpected, and usually unpleasant 异常的；意外的；不幸的；棘
手的
►That’s the plan—unless anything untoward happens.
计划就这么定了，除非出现特殊情况。
►He had noticed nothing untoward.
他没有注意到有任何特殊情况。
35. antics n.
[plural] behaviour which is unreasonable or dangerous 荒唐行为；危险举动
►We’re all growing tired of his childish antics.
我们都对他幼稚的行为感到厌倦了。
36. clampdown n.
[countable, usually singular] sudden action that is taken in order to stop an illegal
activity 严禁，制止，取缔（非法活动）
►a clampdown on drinking and driving
严禁酒后驾车
37. advertorial n.
[countable] an advertisement in a newspaper or magazine that is made to look
like a normal article 社论式广告
38. leery adj.
(informal) careful in the way that you deal with sth or sb because you do not trust
them 猜疑的；谨防的；极力躲避的
~ (of sth/sb) | ~ (of doing sth)
►The government is leery of changing the current law.
政府对是否修改现行法律存有疑虑。
39. purveyor n.
(formal) [countable, usually plural] a person or company that supplies sth 提供
者；供应商；供应公司
►Hermès, purveyors of scarves and bags

13
 爱马仕，围巾和手提包的供应商
40. flop n.
(informal) [countable] a thing or person that is not successful, especially a film,
show or party （电影、戏剧、聚会等）失败，不成功
►This movie was a big flop at the box office.
这部电影的票房太惨淡了。
►The show was the biggest flop in TV history.
这个节目是电视史上最大的失败。

14