In 2025, over 50 per cent of brands plan to increase budget spend on creators, according to a study by LTK and Northwestern University. How should they allocate their inflated influencer marketing dollars?
What exactly this spend will be will depend on the brand and its priorities (drive sales versus raise awareness, for example), experts say. The main thing is that spend is increasing, says James Nord, founder of influencer marketing agency Fohr. “It’s growing and is pushing towards a place of more prominence and centrality in the marketing mix,” he says. “The big thing is scale.” Nord puts a high influencer marketing budget at about 20 per cent of a brand’s marketing spend.
Some brands are planning to go bigger. It makes up 30 per cent of intimates brand Cou Cou’s budget (which includes product and content collaborations). Newly launched pilateswear brand Olivia Rose Pilates also dedicates 30 per cent to influencer marketing, as does jewellery brand Pdpaola (though the brand considers this low). Australian resortwear brand Hope and May also dedicated 30 per cent of its marketing budget to influencer marketing in 2024 — and plans to up this to 50 per cent or more for 2025 as it preps for its US launch this summer.
“While ROAS (Return on Ad Spend) from Meta and Google paid advertising has declined, performance metrics for influencer marketing have shown a significant upward trend,” says founder Tahlia Maguire of Hope and May’s 2024 results and learnings.
Budgets aren’t just getting bigger — they’re shuffling as brands hone their influencer marketing strategies. In 2025, refillable bodycare brand Wild is shifting more budget toward newer channels like YouTube Shorts and TikTok Shop. “They offer strong engagement and direct conversion opportunities,” says Lauren O’Reilly, Wild’s US influencer marketing lead.
With bigger investment in influencer spend comes risks. The future of TikTok in the US is up in the air, as a potential ban of the app is slated for 19 January, meaning brands are figuring out plan B if the app were to go away. Influencers themselves can also be risky investments, prone to backlash or cancellations. But their gravitational pull counterbalances these potential challenges, especially as marketers say Gen Z and millennial consumers increasingly identify with authentic marketing campaigns.
As we enter 2025, here’s what’s changing about best-in-practice influencer marketing.
Storytelling: Upping the ante
In 2024, video took centre stage. In 2025, brands are doubling down, prioritising storytelling-focused content.
Brands are increasing their investment in long-term paid influencer campaigns, says Julianne Fraser, founder and CEO of influencer marketing agency Dialogue. These engage creators for up to six months and span various platforms and narratives. It’s a means for breaking through an increasingly competitive and saturated influencer marketing landscape, she says. “Brands are finding it increasingly more important to establish genuine and authentic creator relationships, achieved by long-term campaigns.”
Cou Cou plans to invest more budget into content collaborations including creator travel features and the brand’s Cou Cou Talks series. For Australian ready-to-wear brand Asta Resort, activities that go beyond a tag in a single grid post is a priority, including brand trips and events. Brands across the board are also prioritising investment in long-term partnerships with influencers, ditching one-off spon-con posts. Pdpaola wants to use video content to bring consumers into its newly opened Manhattan flagship, so it is bringing creators in to make content in the space.
Brands need to be wary of leaning too far into longer-form content, cautions Xavier de Baillenx, CEO at creator ads platform Ramdam. He flags that short-form videos are 2.5 times more engaging than long-form.
Instagram content
Macro vs micro influence
Traditional celebrity budgets would typically have been handled separately from influencers. Now, Nord says, Fohr is starting to get more celebrity budgets. “[They] are moving to super macro, celebrity level influencers,” he says, expecting that this consolidation will continue in 2025.
With the US launch in mind, Hope and May is planning on securing celebrity placements as part of its influencer marketing budget. “We see celebrity collaborations as a key strategy for boosting brand awareness and reaching our target audience effectively in all markets,” Maguire says. Celebrities are now also integrated into Pdpaola’s influencer marketing budget, comprising 20 per cent.
It’s a logical shift. Celebrities from Hailey Bieber to Kylie Jenner are often crowned the ‘top influencers’ in terms of reach and media impact value (MIV) alongside traditional influencers. The top five beauty influencers of 2024, for instance, were Hailey Bieber, Ariana Grande, Kylie Jenner, Selena Gomez and Rihanna — not a ‘traditional’ influencer in sight.
That said, micro- and nano-influencers should be a top priority this year, especially given the strained economic conditions, de Baillenx says, as they also inspire up to 60 per cent more engagement than big influencers. “They offer authentic engagement at a lower cost. This strategy enables scalability while also leaving budget to invest in paid media to amplify influencer content,” he says.
Micro influencers are the priority for newly launched Olivia Rose Pilates. They’ll make up 50 per cent of the brand’s influencer marketing budget. “Their authenticity and engagement rates align well with our brand values,” co-founders Jessica and Lucie Nelson agree. “We are really pushing to work with these influencers for our 31-day challenge [that started] 1 January 2025.” (Nano will make up a further 10 per cent for smaller campaign challenges and niche, highly engaged communities.)
It’s a strategy that’s proven fruitful for Cou Cou. The brand’s marketing split is about 15 to 20 per cent is macro/celebrity; 75 to 80 per cent nano/micro/mid. “We see someone with 1,000 followers as an influencer if she aligns with the values, passions and interests of the Cou Cou girl,” she says. “Someone who’s in the world, someone whose taste people in their real day-to-day lives respect and appreciate, is actually likely to have more impact than an ‘influencer’ (in the typical sense of the word) that has 50,000 followers — but might not actually have much impact on those around them.”
It’s about capturing this longtail, Nord says, by working with smaller creators and influential customers as well as the “digital one percenters”. There’s a way to go, he says: “Brands aren’t yet getting into like all the nooks and crannies of the internet that we need to reach into.”
Instagram content
AI investments
To reach these creators — and their audiences — this is the year influencer marketing will get techy, experts agree.
There’s value in backend AI solutions, especially for smaller influencers, Nord says. “When you get down to, say, sub-25,000 followers, you need the ability to do stuff at scale — gifting, larger paid campaigns that are less complex. The effort it takes to execute a campaign should increase as the size of the creator increases.” AI can help alleviate this effort at the lower end.
Brands are interested but are proceeding with caution. Wild recently partnered with a gifting agency that incorporates AI into their process. But it’s not going all in. “We prefer to manage all our paid campaigns in-house with our talented team to maintain full control over strategy and execution,” O’Reilly says, noting that she’s to see how AI can complement the brand’s approach. Oliva Rose Pilates is working with predictive analytics platforms, and platforms like LTK and Shop My to track analytics and give back to influencers posting their products.
This year, Pdpaola aims to integrate AI to improve backend efficiencies. In the third and fourth quarters, it will prioritise new tech to provide insights into the US market and consumers. “As we are still relatively new in the US market, this will be a critical focus,” says US brand director Carolina Perez Aleman.
Asta Resort, meanwhile, is evaluating the opportunity. “We have explored AI tools and automation processes to understand if there are certain efficiencies we can build into our influencer marketing programs,” says founder Helena Ammitzboell. “However, we remain cautious about automating relationship-driven aspects of our strategy, as authenticity is core to our approach.”
TikTok watch
Though a TikTok ban in the US is indeed on the cards, brands aren’t changing their strategies and investments just yet as we wait to see what happens. If a ban does come into effect this year, the majority of their TikTok spending buckets should reallocate to other video socials like Instagram and YouTube Shorts, Nord says.
It could mean a shift in which creators brands invest in, though. “Ideally, if the creator has a similar following on another platform, we’ll just jump over there. But that’s not gonna happen every time,” Nord says. In this case, he’d source talent replacements.
Though he agrees brands don’t need to downsize their TikTok spend just yet, de Baillenx does recommend diversifying budgets. This mitigates risk and also drives brands to effective channels and formats, he says, noting that platforms like Instagram Reels see reach increases of up to 892 per cent for smaller accounts. “Despite the platforms brands choose to advertise on potentially changing, short-form video content and algorithm-driven content discovery will remain critical to capturing and maintaining audience interest.”
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