Behind the scene: Stars of Youtube & Micro-influencers

TV is over, let’s move to Youtube !!

With the blooming of new online media, like Youtube or Netflix, time spent in front of TV decreases. According to a survey fielded by Defy Media in March 2016, consumers aged 13–24 watch 12.1 hours of video weekly on Youtube vs 8.2 hours weekly in front of television.

Therefore new online stars, lionized by teenagers, appeared. Most of them started by recording video in their bedroom to talk about their daily life but the time of amateur video is over. The “Youtube game” is now professional thanks to Multi-Channel Networks (MCNs). MCNs are third-party service providers that affiliate multiple YouTube channels to offer services like audience development, monetisation, and sales. Traditional media were slow to understand the power of Youtube. As soon as they understood it, they decided to acquire MCNs. It was a quick solution to grow and to develop an offline and online strategy. In France, Webedia moved quickly and acquired Melberries and Mixicom to take the lead of the sector.

The European and North American markets are now consolidated and the next move will be in emerging countries. Asia and South America attract the interest of European and US groups: Webedia acquired 50% of Paramaker (Brazil) in September 2015 and Discovery invested in VS Media (China) in August 2016.

What do you want to be when you grow up? …Youtubers ;)

While brands recognise the value of implementing influencer marketing plans, many are overwhelmed by the challenges of finding the right influencers to amplify their brands’ messages. To fill this gap, influencer marketplaces emerged to connect influencers with brands. These marketplaces are reinventing the growing influencer industry through serving the needs of both brands and influencers with cutting-edge technology. As example, 50% of the employees of Octoly are devoted to the R&D developments. Influencer marketplaces started to raise money in 2014 to accelerate their growth and to upgrade their technology. Biggest deals in the sector include the fundraising of BuzzMyVideo, Influenster, Instabrand, ReadyPulse, Reelio, Speakr and Tapinfluence. For the moment there have been only few M&A deals but more deals are expected to take place after the recent acquisition of Famebit, Grapevine, Hello Society, Niche and The Amplify.

Two criteria will increase the appetite of acquirers :

• An important and diversified portfolio of active influencers
• A state-of-the-art technology providing the best services for brands

The “Best friend effect” is the new must-have for influencer marketplaces

The quest for authenticity leads to a new trend: brands now rely on micro-influencers that are closer and thus more trusted by their audience.

Two companies in France set themselves apart from the competition: Octoly and Influence 4 Brands. Octoly, the French and US influencer marketplace, developed a new strategy: influencers are not paid by brands but they get products for free so they have the freedom to create the content they like. This strategy has been successful, Octoly which was founded in 2013 has already over 2 400 registered beauty creators on the platform and realise 15 000 product placements per month with business in three countries (France, US and Spain). The second one is Influence 4 Brands, a marketplace that started as an agency and has now over 30 000 influencers registered on its marketplace. Despite its fundraising of €1m in November 2016, the company is on track to become an important player in France.

Two trends take place in the industry: either marketplaces become specialised in influencers with small and targeted audience, or they decide to focus on a specific sector like Buzz&Go, specialised in the tourism industry. The specialisation is a strategic move to help brands to increase the impact of their ads and to stay ahead of the competition.

To be acquired or not, that is the question

As brands are looking for new ways to reach their customers, influencer marketplaces will keep flourishing, we are just at the beginning of a new kind of advertising. In fact brands just start to understand the power of influencers and for the moment revenues are small in comparaison to advertising budgets. The question asked is can influencer marketplaces stay independent? According to what happened, we think that they are going to be acquired either by media companies or by advertising companies that are interested in the technology developed.

At Apparius we have worked with the most amazing startup in the advertising sector, if you want to get a deeper insight, feel free to come to grab a coffee.