The Advertising Industry is Drastically Changing with the Emergence of AI Influencers: Who Will Take the Lead?

1. Advertising Budgets at a Crossroads

Amid global high interest rates and recession concerns, many companies are reassessing their advertising expenses. Kenny Gold from Deloitte Digital points out, "Even if the total marketing budget is cut, expenses related to creators are still increasing."taipeitimes.com. U.S. company Unilever plans to allocate up to 50% of its advertising budget to social media and expand the number of influencers it employs by 20 times.taipeitimes.com.

2. The Saratoga Incident—An Ice Water Dive Leads to a Sales Boom

In March this year, fitness influencer Ashton Hall introduced Saratoga Spring Water, which was relatively unknown, through his "morning routine of plunging his head into ice water." The video surpassed 3 million views, rapidly increasing brand awareness. During the earnings call of its parent company, Primo Brands, the CEO himself commented, "He is our savior."taipeitimes.com.

On social media, comments like "I skip TV commercials, but I watch my favorite's routine till the end" (X user @kenbiz) and "It's cleverly enticing without feeling like an ad" (from a TikTok post) are circulating, once again visualizing the correlation between UGC and purchasing behavior.

3. Reading the "Creator Economy" Through Data

• Global Market: Estimated at $33 billion by Statista, a 36% increase from the previous yeartaipeitimes.com

• Japanese Market: ¥86 billion, a 16% increase from the previous year (CyberBuzz/Digital InFact)cyberbuzz.co.jp

• Corporate Awareness: 70% of domestic companies anticipate an increase in the importance of SNS marketing (Meltwater survey)meltwater.com

• Investment Allocation: Last year, an average of 25% of advertisers' social investments globally were spent on influencer feestaipeitimes.com

These figures indicate the reality that UGC is not only standing shoulder to shoulder with existing media but is beginning to surpass it.Kate Scott-Dawkins of WPP Media asserts that "this year, ad revenue from UGC platforms will surpass professionally produced content for the first time"taipeitimes.com.

4. The Reality of Social Media Use and "Buzz" in Japan

X (formerly Twitter)/Instagram/TikTok/YouTube/LINE—the five major social media platforms have a total of 110 million users (estimated by the Ministry of Internal Affairs and Communications). Particularly on TikTok, product-specific hashtags like "#CoachCherry" and "#TabbyBag" garner tens of millions of views in a week. In examples of posts related to Coach Japan, review videos such as "The cherry-patterned Tabby has arrived! The capacity is amazing" are proliferating, strongly stimulating purchasing desires, especially among Generation Ztiktok.com.

A column by Hotto Link concludes that "user 'oshi-katsu' videos are more persuasive than PR statements"hottolink.co.jp.

5. Case Study: Winning Strategies by Genre

6. The Trap of Scandals and Fake Followers

• Scandal Example: Adidas Forced to Terminate Contract with Kanye West (2022)taipeitimes.com

• Fake Followers: 15% of Global Influencer Marketing Budget Leaks to Fake Accountsen.wikipedia.org

Selecting Tools and Reputation Management are Key to Risk Reduction. The 72% Adoption Rate of Social Listening (Meltwater) Reflects the Growing Need for Scandal Detectionmeltwater.com.

7. A New Dimension: AI Influencers

Meta and Japanese Startups are Introducing AI-Generated Creators One After Another.Ruben Schreurs from Ebiquity explains, "The risk of scandal is close to zero, making it attractive from a brand safety perspective." However, it remains unknown how "human touch" impacts conversion rates, and accumulating empirical data is urgently needed. 8. Five Actions Japanese Companies Should Take Setting KPIs by Objective: Segmenting phases into awareness/purchase/UGC generation Optimizing Micro-Influencer Engagement: Testing multiple accounts at an average of 30,000 to 50,000 yen per post Data-Driven Selection: Scoring follower quality and brand compatibility Commerce Integration: Implementing a "one-stop purchase experience" through TikTok Shop and Instagram Checkout Guideline Development: Ensuring compliance not only with the Pharmaceutical Affairs Law and the Act against Unjustifiable Premiums and Misleading Representations but also with the stealth marketing regulations (effective October 2023) 9. Future Outlook As indicated by the M&A rush of Publicis and Stagwell (2024), major agencies are rapidly internalizing "influencer-specialized" functions. A scenario where UGC accounts for half of the total advertising budget is not far off. Domestically, there is a high possibility that major advertising agencies will shift to aggressive acquisitions, forcing small and medium-sized casting companies to choose between partnership or specialization. Social Media Reactions Reference Articles Influencer marketing gains momentum as global ad budgets tighten Source: https://www.thehindubusinessline.com/info-tech/influencer-marketing-gains-ground-as-global-ad-budgets-tighten/article69694188.ece