Age of the Influencer
Written by David Sherry
Talk about a ripple effect. Once brands started to see the data their heads started to explode.
In tech, they talk about the "hockey" stick, wherein a company hits a rate of growth which compounds into accelerated growth, up and to the right.
But today, Kim Kardashian can produce a hockey stick with her thumbs. Truly, you'd be shocked at the impact.
A friend was showing me their app metrics. Their charts were tied to spikes in usage and adoption around major global events, with each event, they'd see an uptick in usage. Then about 3 years in, you see their chart hit a vertical line that goes out of view. Turns out Kim K. and a few others tweeted their support and just like that the few years prior of growth looked like peanuts.
So what's happened here?
Well over the past 5 or 6 years we built marketplaces to serve the influencers. The idea was to build a bridge from the influencer to the brand. Then, help the brand run campaigns by sponsoring the influencers content and product placement.
But there were problems.
First, brands were scared to make big ad-buys so they were stuck paying peanuts to influencers. Campaigns would pay out, US$500, US$1000, even US$5,000 but brands of these sizes are used to spending MILLIONS.
How do you spend that type of dough? How do you know who to spend with?
Not only that, but these marketplace companies got stuck becoming agencies, helping these brands with creative and bending to their beck and call. This is a totally different business model, not their forté.
That's not what tech is about! It's about scale! And software solutions.
So even though the evidence has been around for years that influencer marketing is the future, we've yet to see the full weight of this shift. Simply because the tools aren't here yet. And old media is still kicking but not for long. It's a game of who's got the eyeballs and who's got the influence. It's not ABC and it's not your local paper. Wait for the influencer media to be brought to Roku, and even Hulu. Instagram goes vertical first with Instagram TV and all the while the big brands are stuck wondering just how they get a piece of this mindshare. They put out content on their channels, they insert their ads, but people aren't watching! Unless it's great.
And the thing is all the culture is happening around the individual. All of the feelings of community and worthwhile discussions. This is true whether this is in art, entertainment, gaming or sports. It's the artist that shares their uniquely human experience, that voices our fears and dreams, that gives us permission to be ourselves.
Brands (except for the biggest) are becoming passé. We trust the individual for our news, not a faceless machine. Too often we found out the brand was working behind the scenes without our best intentions in mind.
The best influencers always have the intentions of their community and the purity of their art in mind.
Artist take risks on behalf of their tribe. Brands calculate, to squeeze the user for profits.
But now the brands are waking up. Because if you want your idea to spread, it has to go through the new channels. That means, if you want your idea to spread, it has to go through the individual.
And now we're back in an age-old debate. Where does the value accrue, the individual or the platform?
In the current state of this two-sided marketplace, the tech is beholden to the artist. Maybe not so much in music, and only recently with social media. No doubt these platforms make outsized profits, but they are doing what needs to be done to stay relevant, catering to the needs of the artist.
And so that is to shift focus to building new tools, and new methods for monetization for these artists. The big tech platforms are working to help those creating, building an audience, streaming, all to keep the attention here on the platform.
So back to the influencer companies. Used to be you would build the marketplace, now it's building artists support tools, and new channels for distribution or monetisation.
Now it's building the community. Now it's helping artists get paid.
Affiliate: This originated with bloggers, taking a cut of the products they spoke about. Perfected by Amazon and tracked and digitised to death.
Sharing Ad $$ with the platform: No longer viable, there's too much scale and your million views aren't worth as much as you'd hope for the amount of effort.
Direct to Consumer/Subscription: This is Patreon, Podia and other models where you go direct to fans, who pay anywhere from US$5-US$15 for access to the unseen content, the behind the scenes, and the intimate. This aligns best with the artist but reduces scale. You still have to be on the platform. (which is why Patreon may be in a tough spot).
Channel Specific Ads: Work best in Podcasts, where the listener is engaged over a long period of time and defines themselves in a particular niche. Hard to track ROI, so it's more of a brand marketing for CPG companies with a high LTV. This is why you see the mattress brands and financial services living here.
Essentially this is like Brand Marketing. Soon we'll see companies like Pinterest and Instagram add payments into the platform, and Channel Ad's will become the new affiliate. But not yet.
Donations: Best when it's unique to the audience. I'd love to see more individuals experiment like NPR does with their car trade-in program. Can your audience donate airline miles for the nomad who's traveling? What about sponsoring the hosting of a blog? etc.
Alternative streams: I'd pocket a few other options here, like speaking gigs, strategy consulting, job opportunities. I'm curious to see new models emerge, such as brand takeovers, "brand roll-ups" which are teams of influencers, and possibly even having brands pay on behalf of audiences. This could look like paying off everyone on Patreon for the month so that audiences get access to new content free. There's also events, IRL etc...
The competition here is only heating up. And just in time, as big budgets move from old media to influencers, the tools are being built and the influencers are gaining a better understanding of monetisation as well as the savvy to manoeuvre getting paid and satiating their fans.
The reality is that brands were taking too few risks. Many will not make it through this transition. They became too corporate. Content Marketing and SEO became a game to win through logic instead of through emotion. They want to buy ads, en masse like they used to.
You can purchase mindshare, but not trust and attention. So brands are buying this, or rather renting it from the Influencer to maintain relevance and spread their message.
This will work surprisingly well as it matures. Of course, they could take their own risks. Of course, they could choose to be more human, less of a machine, make more meaning. Not be tone def. Like Patagonia, like CAH.
But they won't. And this cycle will repeat itself. And the artist will continue to find a way through to share her voice.
The tools are coming. But for now, it's the age of the individual.
The age of the influencer.