Consumer giants shift ad spending to influencers as Gen Z competition intensifies

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Consumer giants shift ad spend

Highlights

Unilever and L'Oréal each expanded influencer partnerships to about 500,000 creators in 2024, up sharply from previous years.
U.S. creator advertising spending doubled to $29.5 billion between 2021 and 2024 and is projected to reach $43.9 billion by year-end.
Established brands like P&G and Unilever are using AI tools for influencer vetting and content monitoring amid rising market share pressure from direct-to-consumer brands.

Influencer budgets rise across consumer brands

As reported by Financial Times, large consumer goods companies are expanding creator partnerships at speed as traditional advertising loses traction and social media becomes a more important channel for reaching younger audiences.

Unilever, under chief executive Fernando Fernandez, now works with about 500,000 influencers, seven times the number it used two years ago. For the Fifa World Cup alone, the Dove maker had more than 52,000 creators promoting deodorants and shampoos.

L'Oréal, the world's largest beauty group, also works with about 500,000 influencers, up from about 140,000 in 2024. Across the sector, companies including General Mills, Nestlé, Procter & Gamble and Coca-Cola are increasing spending on TikTok and Instagram campaigns to reach consumers who spend hours each day on their phones.

Industry data points to the scale of the shift. The Interactive Advertising Bureau says U.S. spending on creator advertising doubled between 2021 and 2024 to $29.5 billion, and its report published in November last year estimates spending reaches $43.9 billion by the end of this year.

Market share pressure and brand risks

Established household names are responding to years of pressure from direct-to-consumer insurgent brands that connect more effectively with younger shoppers. Bain says these brands account for 40 per cent of growth in the U.S. consumer goods industry despite holding less than 2 per cent market share.

Executives and advisers say the spending shift reflects where attention and trust now sit, but it also creates reputational and operational challenges. AB InBev's Bud Light campaign with transgender influencer Dylan Mulvaney in 2023 triggered a backlash and boycott from which the brand has not recovered, underscoring the risks of handing more marketing power to creators.

Unilever chief marketing officer Leandro Barreto says the greater danger is irrelevance, arguing that the industry is paying the price for playing safe for too long. He describes the move into influencer marketing as a systemic change, while James Denton-Clark of Stagwell Europe says brands must balance clear rules on values and messaging with enough freedom for creators to sound authentic.

Companies are increasingly using AI to identify, vet and brief influencers, then monitor the content they produce. P&G chief information officer Seth Cohen says generative AI tools alert the company when influencers, which it calls key opinion leaders, are not on message, while Unilever says its monitoring system is governed by human judgment.

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