A tectonic shift in how brands connect with customers and drive sales is currently taking place. By 2017, the internet will overtake television to become the dominant advertising medium, earning 36 percent of total ad spend compared to TV's 35 percent, as reported by Digiday. With an average return on investment of $6.85 for every $1 invested in digital influencer marketing work, it's easy to see why brands are diving headlong into this space. It's where the smart money is going, so it's imperative that you familiarize yourself with this vast world before actually taking the plunge.
To date, four specialties have emerged among influencer companies: talent agency, technology/SaaS, content network, and influencer agency. Here's a helpful guide to understanding the differences between them.
Modeled after traditional talent agencies, this group of companies focuses on the creator. They have a broad roster of creators they can tap when an advertiser knocks on their door.
Pros: Talent agencies are a one-stop shop for a brand to access top influencers. This is very much the traditional Hollywood model. Casting a film? Call Creative Artists Agency (CAA). Need an influencer for your brand? Also call CAA -- if you can afford it.
Cons: The talent agency's allegiance is to the talent. It's their job to sell their collection of influencers for the highest price possible. They also usually lack the technological capabilities to successfully track and report on campaigns. When 75 percent of influencer marketers report struggling to "find the right influencer," and 25 percent report having a hard time automating their campaign management, these cons become worrisome.
Software as a Service (SaaS) companies provide the technology for you to manage influencer relationships and steward individual campaigns. For the data geeks among us, these tech platforms (like Socialix, TapInfluence, and Traackr) also provide a wealth of analytical tools that allow you to find and manage influencers and drill down into campaign performance and measure ROI. When most companies are using Google to find influencers and spreadsheets to manage campaigns, SaaS companies automate the process and create efficiencies that save time and money.
Pros: To increase efficiency, brands need powerful technology. It's simply the only way to reliably manage influencer campaigns and grow your business.
Cons: They are first and foremost tech companies. Campaign strategy and management simply aren't their strong suit. They rarely understand the intricacies of identifying the right set of influencers based on campaign goals, or coming up with big creative ideas to mobilize those influencers.
If "content is king," then these guys are the royal court. These networks support their legion of influencers with substantial creative resources to produce the most compelling content. By combining the work of like-minded influencers, they build a network of editorial they can monetize. They are churning out great, high-quality content at a breakneck pace.
Pros: You'll pay a premium, but when contracting with a content network you can rest assured you'll be getting high quality content for your brand given the resources these companies are investing in development.
Cons: Content networks have an inherent bias. They're best served when brands buy into specific channels of content that they've spent significant time developing. Like talent agencies, they are most loyal to their core roster of influencers and will sell those options much more aggressively than other influencers who may be more relevant for the brand. Most importantly, there's the issue of fee transparency. Many of these networks make it almost prohibitively expensive. These networks intermingle media revenue with influencer revenue. So you're charged for the influencer and you pay premiums to run ads. In the end, network markups are very hard to ascertain.
The influencer agency exists to serve the brand's interests. They're the umbrella organization that corrals all of the moving parts and aligns them with the brand's goals. They let the talent agencies worry about the creators, they own or license the technology tools, and they tap into the content network when the audience and opportunity make sense. They're able to focus on the brand and offer end-to-end campaign management. They'll define campaign goals and develop unique multi-phased campaigns integrating core messages. Good agencies will curate a database of influencers across multiple talent agencies and networks, and they'll manage the campaign from ideation to execution.
Pros: Because they're unburdened by obligations to talent or tech, this segment of influencer companies has the freedom to focus on the marketer, and to build custom campaigns that fit the individual needs of the client. They can provide transparent fees and performance guarantees. As a brand, it's critical to have somebody in your corner whose economic interests are aligned with yours (whether that's through a retainer relationship or a transparent agency fee). They're also marketing specialists who understand the value that these influencers bring to a brand, and will work to establish long-term relationships as well as develop an overarching influencer strategy that evolves with the brand.
Cons: Not all influencer agencies are created equal. Some aren't even agencies at all, but rather PR firms who dabble in influencers and have conflicting interests at play. When selecting an agency, insist on one with robust technology, transparent fee structure, and creative minds managing your account.
Of course, this overview of specialties is just the tip of the proverbial iceberg. There's a lot of differentiation -- and conversely, overlap -- from company to company. The right decision for your brand requires careful consideration. If there is one takeaway here, let it be this: When selecting an influencer company, keep a watchful eye out for possible competing interests. Influencer marketing is a great investment -- when you do it wisely.