Latest / Social Media Marketing with Fexingo: Instagram, TikTok, LinkedIn, and Platform Strategy / Why Brands Are Moving Ad Budget to Creators
Transcript
- Lucas: So there's this number that's been stuck in my head for a few weeks now. Gymshark — the athletic-wear brand — in 2025 moved about 70 percent of its digital ad budget away from programmatic display and search ads and into direct creator partnerships. Luna: Seventy percent? That's not a test — that's a full pivot. Lucas: It is. And the numbers they reported out of it are pretty striking. They said cost per acquisition dropped 34 percent compared to their traditional social ad campaigns. And their click-through rate was 2.1 times higher. Luna: Okay, I can see why that gets attention. But is this a Gymshark-specific thing, or is this a broader trend we should be talking about? Lucas: I think it's broader. A few other DTC brands have quietly done similar shifts — but Gymshark was the most public about the data. And honestly, if you look at the creator economy numbers overall, it lines up. eMarketer estimated that by the end of 2025, brand spending on creator content in the US hit about $8 billion. That's up from roughly $5 billion in 2023. Luna: So nearly 60 percent growth in two years. What's driving it? Better performance? Lucas: Better performance, plus a structural thing: the old model of running a display ad or a pre-roll on YouTube just doesn't grab attention the way it used to. People have trained themselves to skip or scroll past anything that looks like an ad. But a creator talking about a product in their own voice — that feels native. It feels like a recommendation from a friend. Luna: Right, the authenticity factor. But let me push back a little. If you're a brand spending millions, how do you measure authenticity? And how do you ensure brand safety when you're handing your message to someone who's not on your payroll? Lucas: Both fair questions. On measurement, the brands that do this well are using unique promo codes, affiliate links, and UTM parameters. They track direct sales attribution, not just engagement metrics. Gymshark, for instance, gave each creator a distinct discount code. So they knew exactly which sales came from which creator. Luna: And on brand safety? One scandal from a creator and your product is associated with it. Lucas: That's the risk. But I'd argue the risk isn't that different from traditional media. You run an ad on a cable news show and the host says something controversial — your brand is adjacent. Most brands mitigate it with vetting. They look at a creator's past 90 days of content, their audience demographics, their engagement style. Some even do trial campaigns with smaller budgets before scaling. Luna: So it's not just about the big influencers. Micro-creators with smaller but highly engaged audiences are part of this too. Lucas: Exactly. In fact, Gymshark worked with a mix: maybe a dozen mega-influencers with millions of followers, but also about 200 micro-creators with followings between 10,000 and 100,000. And the micro-creators actually had a higher average conversion rate. Luna: That makes sense. A micro-creator's audience is often more niche and trusting. Their recommendation carries more weight than a celebrity who posts five different brand deals in a week. Lucas: Right. And the cost is lower. A micro-creator might charge a few hundred to a couple thousand dollars per post, versus tens of thousands for a major influencer. So your return on investment can be dramatically better. Luna: I want to talk about the platform side. If brands move ad budgets away from platforms like Meta or Google and toward creators, does that hurt the platforms' ad revenue? Lucas: Short term, yes. But the platforms are adapting. Instagram introduced 'creator marketplace' tools to facilitate brand-creator partnerships directly within the app. TikTok has its 'creator rewards' program. YouTube has 'BrandConnect'. The platforms are trying to keep that spend inside their ecosystem by becoming the intermediary. Luna: So they're basically saying, 'Don't leave our platform; just use our tools to pay creators instead of buying ads.' Lucas: Exactly. And it works for them because they still take a cut. Meta reportedly takes around 5 percent of creator deals done through its marketplace. But for brands, it's a trade-off: easier management but less direct control over the relationship. Luna: What about the agency world? If brands are building in-house creator teams and using platform tools, are ad agencies getting squeezed? Lucas: I think they're being forced to evolve. Traditional media-buying agencies that just negotiated TV and display ad placements are losing relevance. But agencies that have built strong creator divisions — or specialist creator agencies — are growing fast. There's a firm called 'Obviously' that's become one of the biggest creator marketing agencies, and their revenue went from $50 million in 2023 to over $100 million in 2025. Luna: So the money is moving, but it's moving to new intermediaries. The creator economy is becoming more institutionalized. Lucas: Exactly. And that institutionalization brings its own challenges. As more money flows in, there's pressure for standardization: standard contracts, standard pricing, standard performance metrics. Right now, a lot of deals are still done ad hoc via email or DMs. That's inefficient. Luna: And it opens the door for fraud. Fake followers, engagement bots — that's a real problem when you're paying per post. Lucas: It is. The industry group 'CreatorIQ' estimated that about 15 percent of influencer campaigns have some level of fraud — inflated follower counts, purchased likes. Brands are starting to use third-party verification tools like HypeAuditor or SocialBlade to audit creators before they sign deals. Luna: So the sophistication is increasing on both sides. What about the listener who's a small business owner? Can they do this without a big budget? Lucas: Absolutely. The beauty of the creator model is that you can start small. Find 10 local micro-creators who align with your brand. Offer them a free product and a 10 percent affiliate commission. See what happens. You don't need a $100,000 budget. In fact, Gymshark started exactly that way back in the 2010s — sending free gear to fitness YouTubers. Luna: Right. It's not a new playbook. It's just being executed at scale now with more data. Lucas: And the data is what makes it compelling. When you can point to a 34 percent lower cost per acquisition, it's hard for a CFO to argue against reallocating budget. I think we're going to see more brands follow Gymshark's lead, not less. Luna: One thing I'm curious about: with all this creator spend, are we seeing any fatigue from audiences? Like, 'Oh great, another sponsored post'? Lucas: There's definitely a risk. But I think the fatigue is lower when the integration is good. A creator who genuinely uses and likes the product — and discloses the sponsorship clearly — that still performs well. The problem is when creators take any deal and the recommendation feels forced. Audiences can smell that. Luna: So the brands that win are the ones that find creators who are already fans. Not just hired guns. Lucas: Exactly. It's more like talent scouting than media buying. And that's a different muscle for marketing teams. Luna: Let's talk about the broader economic context. It's May 2026. Ad spending overall is growing modestly — maybe 4 to 5 percent year-over-year. But creator spending is growing much faster. What does that tell you? Lucas: It tells me we're in the middle of a structural shift in how brands allocate marketing dollars. The old model of 'make a TV ad, run it everywhere' is becoming less effective. Digital natives are now the primary decision-makers at many brands, and they grew up with creators. They trust this model. Luna: So what's the one concrete takeaway for someone listening right now? Lucas: If you're a marketer, start auditing your last 12 months of ad spend. How much went to programmatic display? How much to search? How much to creator partnerships? If creator spend is less than 20 percent of your digital budget, you're probably leaving money on the table. Run a small test with micro-creators, track the attribution, and let the data decide. Luna: That's a clean, actionable takeaway. And for our audience, we'll link to some of the tools we mentioned — HypeAuditor, CreatorIQ — in the show notes. Lucas: Great. I think the creator economy is still in its early innings. The brands that figure out the measurement and the partnership models now will have a real advantage.