The Fyre Problem: Influencers Are the Future, But Influencer Marketplaces Are Terrible
We had previously operated as one of the biggest influencer marketplaces until early 2016 when our business evolved towards enterprise software for content creation and distribution.
By now you’ve probably read plenty about the infamous Fyre Festival debacle (run by Fyre, Ja Rule’s new influencer marketplace). You may even blame influencers for the over-hype and you wouldn’t be totally wrong. Influencer marketing is the Wild West, where popular people can make thousands of dollars or more and the majority of brands are looking to increase their budgets.
It’s also an extremely difficult channel to generate good results, especially without the right tools.
Why Influencer Content Works
The consumer landscape is much different than it was 10 years ago. Most people get their content from hundreds of new mediums, particularly social media, where the source they want to hear from is a person, not a company.
So it makes sense why ads are getting blocked and ignored at a higher rate than ever and why there is so little trust in brands from consumers.
This is where “influencers”, “content creators” and “brand ambassadors” come in, whose content has a number of advantages over traditional media:
- Influencers are fantastic content creators! The whole reason they’ve been able to build a loyal audience is because of their ability to create content that resonates with a certain type of person.
- Influencer audiences are opt-in rather than push, which means that audiences are excited to see their content on a daily basis.
- Consumers trust influencer recommendations nearly as much as peer recommendations.
- Brands can tie their messaging and positioning to an influencer’s personal, more aspirational brand, connecting with consumers that they may not have otherwise.
There are many success stories from influencer marketing as well as clear market research that shows that it works. But…
But Seriously, Don’t Start an Influencer Marketplace
It sounds awesome. You know a few brands and celebrities and you may have even run a few influencer campaigns. But there are 100 other companies like you and here’s why you’ll probably fail:
- Influencer marketplaces are geared around generating transaction volume, not tangible results for the brand. This means that if your goal is to reach arbitrary metrics like “X million followers” that’s fine, but most brands at the end of the day will want to see things like conversions, sales and traffic.
- Very little vetting happens in a marketplace, because again, the goal is volume. You run the risk of ending up in a situation like Fyre Festival where promotions are seen as more of a scam.
- For an influencer marketplace, your entire value is who is in your network, with no exclusivity. Most of your competitors will have the same email lists and the same data about each person, so there’s not a lot differentiating you from everybody else.
For an objective set of thoughts, one of our earliest clients Scentbird wrote last year about how they tested pretty much every influencer marketplace at the time before coming to a similar conclusion.
Sophisticated Brands Have Figured Out How to Build a Huge Business From Influencer Content
Stitch Fix. Warby Parker. Daniel Wellington. ipsy. All of these fast-growing brands utilized influencers as a core part of their growth strategy in the early days by:
- Building an army of hundreds/thousands of brand ambassadors from the ground up: at this point, most well-known/celebrity influencers are going to charge a fairly steep price. Depending on your brand, it could be worth it, but it’s often even more powerful to find hundreds of micro-influencers who have a close connection with your brand, build deep relationships with them and invest behind the most successful ones.
- Harnessing the power of this content across marketing teams to drive real revenue: rather than just thinking about influencer marketing as a siloed process, take advantage of the fact that influencer content will improve the performance of nearly every marketing channel in the stack, from paid ads, to e-commerce pages to email marketing. Our internal data has shown an improvement in 10–35% CPA when comparing influencer content to traditional photoshoots when used on conversion channels.
But This is a Hard Problem That Requires a Sophisticated Software Solution
We believe strongly in the power of influencers and there is no doubt they are the future. But understanding what content to make, for what audience, on what medium, in a scalable way, is a seemingly impossible task for most brands.
Which is why at Revfluence (shameless plug), we’ve invested over the last 3 years in building enterprise-grade workflow tools, analytics reporting and machine learning to generate scalable content creation through influencers that will drive real results for brands.
Eric Lam is the Co-founder & CEO of AspireIQ, the content generation & analytics software platform with 80+ brand clients like Hello Fresh, Tuft & Needle and Dyson.