“Time to Face the Influencer Pay Gap,” a new study released on Monday, offers a crucial yet disturbing perspective on racism in the U.S. influencer marketing industry.
Public relations agency MSL partnered with The Influencer League, a digital platform focused on educating and empowering a diverse group of influencers, to conduct this study on the racial divide in influencer marketing.
The findings were staggering, while not exactly surprising. The study found that a 29% pay gap currently exists between white and Black, Indigenous, and People of Color (BIPOC) influencers, and an even higher pay gap of 35% exists between white and Black influencers.
This means that if a white influencer is making $135 on a brand collaboration, a Black influencer working with the same brand would only make $100.
“There have been rumors of a racial pay gap for years, but no one in our industry has quantified it until now,” said D'Anthony Jackson, Digital and Influencer Strategist at MSL, in a recent statement.
According to the United States Bureau of Labor Statistics, the 35% pay gap in influencer marketing far exceeds racial pay gaps in other U.S. industries –– 8% in education, 16% in business and finance, 19% in construction, and 16% in media sports and entertainment.
MSL’s report -- which compiled expert interviews, feedback from over 400 U.S. influencers, and findings from MSL’s proprietary influencer marketing platform, Fluency -- was conducted between February and September 2021. It highlights specific reasons why Black influencers are not being paid as much as their white counterparts.
The report found that 77% of Black influencers fall into the nano- and micro-influencer tier (having under 50,000 followers), compared to 59% of white influencers. Compensation in these tiers averages out to $27,000 a year.
In contrast, only 23% of Black influencers are in the macro-influencer tier (over 50,000 followers), where they make around $100,000 -- almost double the amount (41%) of white influencers inhabiting this space.
The report also shows almost half (49%) of Black influencers state that their race influenced brand offers below market value. Thirty-six percent of BIPOC influencers reported the same occurrence.
In addition, the majority (59%) of Black influencers, along with 49% of BIPOC influencers, reported negative financial impacts when they posted on issues of race, compared to only 14% of white influencers.
MSL’s findings suggest that the inequity found in influencer marketing goes beyond the causes of pay gaps in other industries.
While the influencer industry is young and unregulated, largely dependent on connections and affluence –– a trend seen in other high-paying industries –– racist social media algorithms fuel the fire.
However, the industry’s lack of pay transparency is what MSL’s report shows playing the biggest part in this racial pay gap. When respondents were asked to name one thing that might eliminate the racial pay gap, 92% of responses focused on pay transparency.
Forty-five percent of Black influencers said the most challenging element of agency and brand collaborations was “managing the financial process,” with only 27% of white influencers reporting the same.
“If I could solve one thing in this industry that hurts BIPOC influencers, it would be pay transparency,” says Brittany Bright of The Influencer League. “The absence of a pay standard disadvantages BIPOC influencers at every turn.”
Furthermore, 48% of Gen Z and 43% of Millennials are BIPOC.
“Together these two generations account for the largest and most important sector of the consumer market today,” read MSL’s recent statement. “By the middle of the next decade, they will be the most economically powerful generation of all.”
It’s a consumer generation reachable mainly through BIPOC influencers.
MSL wants to set the standard for a more equitable industry. To further the impact, MSL will continue its partnership and research with The Influencer League, along with creating a future scholarship fund that provides 1,000 talented BIPOC influencers with Influencer League training.
MSL also plans to release an Influencer Pay Index to determine and track all influencer pay through Fluency while convening a summit of agencies, brands, and influencers to arrive at a universal pay principle.
“Issues of systematic injustice have plagued Influencer marketing for years -- and been largely ignored for far too long,” says Diana Littman, MSL U.S. CEO. “Our research shines a spotlight on the present state of influencer marketing and charts the path forward for both the agency and our industry.”