Influencers On The Rise Make Way For A New Breed Of Agencies
It’s a whole different world than it used to be–and the recent decision by the Democratic National Convention to accredit social media influencers, just as journalists have always been invited to the proceedings, establishes how much things have changed.
This newest development for influencers confirms the already ongoing revolutionary shifts in search behaviors and the changes in which voices are trusted for recommendations and have put brand marketers on notice: Algorithms—traditional brand messaging, advertising itself as we have known it— are an increasingly smaller part of an effective strategy for selling products.
As we have heard, more than half (51%) of Gen Z prefer to do their searches on TikTok, and brands must be there and on other video platforms like Instagram to be discovered. How they show up makes all the difference. A flat ad touting the benefits of a product long ago gave way to reliance on more personal, and more trusted, recommendations: What we call “influencers,” that new breed of trusted friends in the digital world.
More than 90% of people seek online reviews before making a purchase, but today even celebrities alone can’t move a consumer to buy as in the past. A recent survey in Europe showed this trend: 45% of European Gen Zers report they’re more likely to buy fashion items they’ve seen on influencers than promoted by celebrities or even their peers.
These online culture warriors feel, in the too-impersonal world of digital marketing, like personal guides, a human touch. And they are an advertising gold mine.
Influencers steer billions of dollars in sales for the world’s largest brands, with the global affiliate marketing industry projected to reach $40 billion by 2030 and the overall creator economy expected to be worth $480 billion by 2027—nearly double what it was just last year. It’s working so well for some advertisers that they’re now taking the influencer sponsorships on apps like Instagram and TikTok and swapping these creators for traditional actors in television ads as well.
All these fundamental changes are coming at the same time when the cost of acquiring new customers is at an all-time high, jumping 220% in just the last 8 years. Old-school advertising, to which consumers are ever-more blind, grows more expensive.
How does a marketer navigate this new world?
Finding The Right Partners For Finding Effective Influencer Strategies
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Companies have blossomed that offer marketers the way to find the right partners for an influencer strategy that includes the multiple, simultaneous demands of creating, managing and optimizing the web of relationships necessary for a successful influencer strategy.
Marketers should be looking at the possible benefits of working with influencer agencies, which have grown into a new and strong business lately. And for good reason.
One of the leading companies in the field, impact.com, released research that shows that 86% of consumers say recommendations and reviews are important in their purchase decisions, while only 2% consider traditional ads influential in their buying choices.
That confirmation that the “old ways” of just a few years ago don’t work anymore has created not only a new way of marketing but also led to the emergence of a new kind of industry. According to Dave Yovanno, CEO of impact.com and author of The Partnership Economy: How Modern Businesses Find New Customers, Grow Revenue, and Deliver Exceptional Experiences, “We’ve moved into an era where consumers are firmly in the driver’s seat, calling the shots in how they want to be contacted, engaged with, and sold to. They’re ignoring traditional ads, and turning instead to authentic and transparent sources of advice and recommendations they can trust–including from creators.”
Impact.com touts that it supports over 225,000 partnerships for more than 4,000 customers including global enterprise brands Walmart, Uber, Shopify, Lenovo, L’Oreal, Fanatics and Levi’s and fuels the creator platforms for giant brands like Target, Walmart and HSN. It also provides a marketplace so brands can discover and contract with publishers such as The New York Times, The Wall Street Journal, affiliates, other businesses, micro creators and more.
Of course, impact.com is not alone: Marketers are also working with Captiv8, CreatorIQ and Influential, which join the roster of the most sophisticated such companies, and they all offer services many of the traditional big ad agencies don’t necessarily have as a distinct capability in their portfolio.
Better influencer agencies offer two types of services: the talent and the technology side of the business. Talent-driven influencer services focus on supporting and repping creators and influencers, as well as offering creative services for influencer activations. The science-tech side of the influencer agency world covers data, commerce, measurement and ad tech.
The truth is, marketers that have been reluctant to turn to influencers don’t have much choice anymore—it’s what works.
As Yovanno also says, “Buyers want to learn about a brand from other people, and hear directly from other customers when evaluating products and services. And it's this kind of transparency and authenticity that helps build trust and loyalty. The partnerships channel is a cost-effective and ROI-driven channel, that aligns perfectly with the modern buyer’s journey. Partnerships reach customers at various places along the buying journey, and offer brands the opportunity to strengthen their connection to customers, diversify their marketing channels, and drive tangible results.”
Yovanno adds: “Our research shows that mature brands that incorporate partnerships into their marketing mix see 28% of their revenue mix coming from those partnerships and an impressive 50% growth in revenue.” That’s an offer a marketer cannot refuse!
Of course, as we shall see in a future column, AI is coming for influencers too. At Cannes this year, TikTok announced a tool for creating AI avatars which would allow creators on the platform to work faster and at a greater volume. But AI used this way only builds on what already exists – it can’t create radically new, messy, imperfectly perfect real-world stuff. Yet.
That means that at least for now, the humanity that online influencer-creators bring to the table is not just good for business—it’s invaluable.
Also published in: Forbes
