Brands boost influencer marketing as ad budgets shift in 2025

Brands are shifting their advertising budgets away from traditional ad spend and towards influencer marketing as revealed by new research from Kolsquare.

The 2025 Kolsquare Budget Report indicates a marked change in how companies approach their marketing investments, with funds increasingly being directed toward influencer-led campaigns across a variety of sectors. The report highlights that influencer marketing, once considered a supplementary tactic, is now central to many brands' overall strategies.

According to the report, marketing budgets overall are not increasing, remaining at around 8% of company revenue as reported by Gartner for 2025. However, despite this stagnation, influencer marketing is taking a larger share of that fixed spend. The report notes that for some organisations, influencer marketing now accounts for up to half of their total marketing budget. Several Chief Marketing Officers (CMOs) identified influencer marketing as the only aspect of marketing where they plan to increase spending in the coming year.

The report also points out that as top-tier influencers and creators seek higher compensation, brands are beginning to focus on building long-term collaborations with smaller, so-called micro-creators. This shift allows companies to forge more sustainable and impactful partnerships while managing costs.

Shifting budgets

One of the key findings laid out in the Kolsquare report is that social media and influencer-led activities are absorbing significantly greater investments from brands. For example, Unilever is cited as allocating 50% of its global advertising expenditure to creator partnerships, underscoring the industry-wide move away from more traditional advertising models.

Another significant trend is the rising fees commanded by influencers. As demand grows faster than supply, rates are increasing and, in some cases, have doubled compared to previous years according to industry benchmarks. This has led to increased competition among brands seeking to associate with creators perceived as both influential and authentic.

Marketers are also reporting stronger performance metrics from influencer marketing. Key indicators including return on investment, engagement rates, and brand affinity are said to be exceeding those of traditional advertising, particularly when looking to influence Gen Z and Gen Alpha consumers. Influencer partnerships are credited with having a measurable impact on these buyer groups.

Role of technology and data

The report states that technology integration is crucial for brands seeking to optimise their influencer marketing strategies. Platforms equipped with artificial intelligence, analytics dashboards, and customer relationship management capabilities - such as those developed by Kolsquare - are described as essential for marketing professionals who must demonstrate campaign effectiveness and manage influencer partnerships in a coordinated manner. Precision in campaign execution is highlighted as a requirement to ensure every unit of currency delivers tangible value.

Brand examples

The report offers several case studies illustrating the current transformation. Berocca, a well-known vitamin brand, revamped its identity by engaging influencers to better connect with younger consumers. Its 'Keep The Rhythm' campaign, anchored in authentic storytelling, involved an investment of GBP £116,000 and yielded an Earned Media Value (EMV) of GBP £1.4 million.

Similarly, Filorga, a skincare brand, focused its campaign on partnering with credible social media figures and skincare experts to support its expert positioning in the market.

Paulmann Lighting, seeking to broaden its reach, leveraged Kolsquare's technology to collaborate with lifestyle and interior design creators. These collaborations generated 81,000 engagements across 27 posts and reached over 1.13 million unique accounts, facilitating the brand's entry into new markets.

Industry viewpoint

"Influencer marketing has become a vital part of marketing strategy across the board," said Kolsquare's CEO Quentin Bordage. "2025 is the year when CMOs stop buying impressions and start building relationships. The brands winning right now are those who see creators as cultural partners who drive relevance and growth."

The report argues that the shift is driven by diminishing returns on traditional advertising, with consumers showing signs of so-called 'ad-blindness'. Creators, by contrast, are seen as establishing the sort of engaged communities and authentic conversations that brands are keen to access. This has encouraged marketers to rethink their mix, emphasising influencer marketing to pursue better returns and connect with target audiences more effectively.

Implications for marketers

For marketers facing the dual challenges of efficiency and effectiveness under budget constraints, influencer marketing is described as offering both. The report states that influencer marketing occupies a "growth engine at the intersection of culture, commerce, and credibility," positioning 2025 as the year in which it transitions from a tactical component to a core strategic focus for brand-building efforts.