iOS privacy changes mean less paid ads, more influencer marketing

When Apple’s iOS’s privacy changes came in like a wrecking ball last year, Nycole Kelly worked with multiple brands in its path. Luckily, she found a solution: influencer marketing.

When the update hit, The Outloud Group’s VP of client strategy told Marketing Brew advertisers had no idea how much it would push up costs on metrics like CPCs and CPAs.

Influencers, Kelly said, can give brands some control back. She even told us that privacy concerns are “a big piece of the fuel” for the influencer marketing industry’s recent growth (the sector grew to $13.8 billion in 2021, up from $9.7 billion the year before).

She’s not alone—many influencer marketers think that Apple’s privacy changes have given influencer marketing a leg up, and that the industry’s growing focus on privacy may have helped to spur the sector’s recent growth. As data privacy concerns increase, some argue that influencer marketing can be a less invasive channel than traditional paid social ever was.

It’s raining displaced ad dollars

James Nord, the founder of Fohr, an influencer marketing service, told us that the month after iOS 14.5 rolled out, brands reached out to his company multiple times a week explaining that their paid ads weren’t performing as well anymore, and that they wanted to diversify their spend into influencer marketing.

Fohr’s business saw bookings increase 129% between Q1 of 2021 and Q1 of 2022, which the team attributes, at least in part, to privacy concerns and iOS 14.5’s impact on paid social advertising. It’s worth noting that Meta said Apple’s changes could end up costing it $10 billion in lost sales this year.

Diverting money from Meta and other performance channels into influencer marketing, Nord said, has very much been “a trend” over the past year or so. Grace Murray, Fohr’s VP of strategy, told Marketing Brew that she estimates about 20% of Fohr’s clients—which include companies such as Estée Lauder, Sephora, and Kohl’s—at least considered reallocating some of their paid social spend toward influencer marketing.

After all, if a brand has gotten familiar with running Instagram ads and likes the ecosystem, but doesn’t want reduced ad performance, using influencers on Instagram makes sense as a solution, Nord said.

One brand’s founder told us the same. Laura Burget, co-founder of beauty brand Three Ships, told us that because “digital paid channels have become less effective in the post iOS world,” she thinks brands are looking for other channels—like influencer—to spend on.

And while Nord clarified that the “vast majority” of brands are still heavily invested in running paid ads on platforms like TikTok and Instagram, he said Apple’s update “leveled the playing field quite a bit” between paid ad performance and influencer activations.

Two is better than one

Ali Fazal, VP of Marketing at influencer management platform Grin, also told us that his company is seeing its customers pull money out of paid social and put it toward influencers, because “it reduces their customer acquisition cost.”

That could be partly because influencer marketing seems like a channel that respects a user's privacy. Tim Sovay, chief BD & partnerships officer and chief operating officer at influencer marketing software platform CreatorIQ, described it as a “double opt in” situation. First, consumers typically choose to follow an influencer, opting in to seeing their content. Then, the influencer opts into working with brands.

According to Gaz Alushi, Whalar’s president of measurement and analytics, while Gen Z understands that companies use their data (probably for selling them cheap cut-out leggings, among other things), what they care even more about is consent.

“I think that’s been the evolution of the privacy conversation,” the creator commerce company exec told us.

Fazal explained that with influencer marketing, in many cases, “you as a brand are completely safe, because you’re only reaching people who have opted into hearing from a particular creator. You’re not violating anyone’s privacy, you’re not reaching them unsolicited. And you’re not betraying their trust as consumers.”

In other words, “It’s like fully consensual marketing,” he said.