Unilever’s big bet on micro-influencers carries real risks

As a giant of consumer goods with over 400 brands from Marmite to Magnums and Dove to Domestos, when Unilever announces a major shift in how it markets and sells its products, the industry listens.

The company’s new CEO, Fernando Fernandez, said last week that its customers are now so suspicious of messages created by brands, it plans to scale back traditional ad spending, replacing it with a greater focus on influencers that would now account for up to half of its total advertising budget.

Fernandez suggested that consumers are much more likely to be swayed by messages delivered by third-parties, including influencers, celebrities and TikTokers, and said he wanted to create a huge network of influencers.  

“There are 19,000 zip codes in India. There are 5,764 municipalities in Brazil. I want one influencer in each of them,” Fernandez said. “In some of them, I want 100.”

Fast-growth

Influencer marketing has been growing quickly for years. According to Statista, the global influencer marketing market has more than tripled in size since 2020. 

And while traditional celebrity endorsements are still common, micro-influencers – those with smaller, highly engaged followings – have become more and more important. 

For brands, micro-influencers provide access to targeted communities where trust has already been established. They are cost-effective and can deliver higher engagement rates at the fraction of the price of a celebrity or macro-influencer. The idea is also that micro-influencer content, often focused on niche topics, blends more seamlessly into the influencer’s social media feed, making it a more subtle channel than, for example, traditional digital advertising, which faces challenges from ad-fatigue and ad-blocking technology.

Brands such as Gymshark have built their marketing success on the back of micro-influencer networks, successfully using everyday enthusiasts as powerful brand advocates. But while consumer-facing businesses need to understand how to introduce and sell to their audience via social media tastemakers, they also need to understand the risks. 

Reputational risks

The relatively short history of influencer marketing is littered with cautionary tales. 

YouTube star PewDiePie lost brand deals with Disney and YouTube in 2017 after being linked to controversial content. Adidas was threatened with legal action and calls for a boycott after it featured Bella Hadid, a vocal supporter of Palestine, in an ad campaign which referenced the 1972 Munich Olympics, where the Palestinian group Black September had carried out a terrorist attack. Chinese fast-fashion giant Shein suffered a major online backlash after paying for influencers to visit its “innovation centre” in China in 2023, aiming to improve its image following criticism of unethical labour practices. 

These examples mostly involve major, high-profile individuals. With a high number of much lesser-known micro-influencers, the lack of control is heightened and is inherently risky. Unlike carefully curated celebrity partnerships, influencers operate independently and their personal opinions, past behaviour and future actions can very quickly become a liability.

With the numbers of micro-influencers Unilever is talking about, if it hopes to carefully vet those it plans to work with, which would be wise, it will need to allocate serious resources to manage this effectively.

There will also be compliance complications. In the UK, influencers must make it clear if they have received payment or product samples in return for reviews. But rules and regulations differ across different countries, and brand owners will need to make sure all their influencers are operating within the appropriate local regulations.

And while micro-influencers are seen – certainly by Unilever – as a more trusted deliverer of messages, this can’t be taken for granted. The perceived authenticity that helps influencers build their followings in the first place can be quickly lost if they become overly commercial. 

Managing risks

Companies embarking on a micro-influencer strategy like Unilever can achieve great results if they execute it well, but they must take steps to protect their reputation.

They should conduct background checks on influencers before embarking on a partnership, including reviewing past content, assessing potential controversies and ensuring the influencer’s values are aligned with their own. 

Checks should also look at whether they are already talking about your products on social media. Consumers are getting better at spotting insincere endorsements, so choosing partners that have a genuine interest and appreciation in your product can be a lot more effective than forcing a collaboration.

And of course, brands should make sure they are prepared for any potential fallout if things turn sour. Though traditionally influencer partnerships have been managed by marketing or consumer PR teams, they can have such an impact on brand and corporate reputation, involving reputation management specialists from the outset can save a lot of pain and brand damage later on.

Micro-influencer partnerships are not going away, and these signals from a consumer brand giant like Unilever will only make others sit up and consider their own strategies.

But they must do so with careful planning and a close eye on the reputational risks. The regularity with which companies shoot themselves in the foot through ill-conceived marketing and advertising campaigns never ceases to amaze me. Following the micro-influencer approach only increases this risk, and the chances of being associated with a huge range of potential pitfalls.