The first time I heard of the "creator economy”, it was in 2023 after the excitement around the Metaverse had passed, and cryptocurrency and NFTs had fell from their illustrious heights (doomed to fail from the start). ‘Here we go again’, I thought, “another term to over-analyse something that had been around for many years previously under the guise of influencer marketing”, ever the pessimist. Conflated with it’s own self-importance, the term creator economy gave gravitas to an area of marketing that was still struggling to truly define its importance in the marketing mix, and that was mainly because the ‘experts’ in the field were fighting to establish an form of marketing that had little proven potential, and as a result an immense amount of skepticism.
“You want me to pay that man HOW MUCH to make a video in his bedroom at home?!”
The industry was being lead by folks who had for the most part come from nothing, with little experience in adland, and for the most part lacking an understanding of the history of advertising, the standards that had been defined and lacking insight into what brands needed to justify their spend. So, influencer marketing was barely gaining the respect it deserved before someone went and slapped the word economy in there, taking it from a fast-growing area of marketing to an entire ‘economy’. Influencer marketing had undergone it’s own rebrand and I for one was skeptical it could live up to the hype. In this article I’ll explore what’s happening to make the future of the economy volatile and what we need to do to fix it.
A brand’s shifting expectations of influencers
The shaky foundations of the creator economy stem from its established maturity within the marketing world. For the first few years of its existence, influencer agencies controlled the narrative as the experts. They held the keys, as the ones in possession of this mysterious tactic that marketers were vying to learn more about. They could drive excitement amongst brands by talking to the wonderful results that could be generated by influencers - impressions, reach, views. Over time, agencies worth their weight in gold, could see that the expectations of brands were changing in-line with a greater understanding of the art, as well as reflecting the need to drive greater ROI from influencers. This was mainly down to volatile economies putting greater pressure on business share price, which inevitably casts a spotlight on marketing departments to justify every dollar spent to a CFO or Finance Director who cares not for reach metrics, and instead for the cash generated (the same thing is happening with social channels in general and something I talk about regularly). Impressions, reach and views, turned into engagements, sentiment and click-through-rate, and now even direct ROI. With it, there’s been, at times, contradiction by agencies who pushed further into promising sales growth vs the ‘old-school’ influencer agencies who still served the message that influencers were best for awareness, and not effective as sales drivers. Traditional agencies, who started to launch their own influencer propositions, paired their influencer output with their media teams efforts in buying and planning, maximising the impact of influencers and proving the potential for them to drive sales. Brands therefore, can shop around to find someone who is selling them the product they need, even if it’s not viable in practice.
This is compounded by ever-changing expectations from those exact brands on how they utilise the influencer skillset, away from traditional ‘influencer promoting X product on their Instagram channel’, to instead celebrity-style advertisements of old, with influencers being the face of lo-fi (and sometimes hi-fi) adverts that appear in paid-ads and on brand social channels. Why? Because influencers and the platforms they’re native too, have become increasingly complex, with more and more influencers popping up daily, when things become so complex, the best agencies know how to simplify, and nothing is as simple as the marketing practices that veterans of the industry already understood.
For those brands who are looking to better understand purchase impact, the influencer industry is under threat from a complex tracking system which involves so many digital and physical touchpoints that influence decision-making, that their (the influencers) value is being challenged greatly and their metrics do not always return numbers in a way that demonstrates their actual value. As mentioned, this is placed at risk further by industry ‘experts’ claiming that influencers don’t drive sales. Sweeping statements that damage perception and simply aren’t true.
The questions brands need to ask should be around the value of creators to translate their value from their own channels onto brand channels whilst maintaining the elements that made influencer marketing attractive in the first place. The exact factors of influencer marketing that made them successful is being overwritten by brands wanting to create content for their own channels, and brands need to ask whether the creator they are using is at a size where people understand and recognise their value in brand content in the first place, versus being an overpaid actor/content creator. An entire segment of content creators exists at the grassroots/nano level that can offer the same level of effectiveness at a fraction of the price.
For Agencies: Agencies need to work with brands to identify the role of influencers in the brands customer journey, and maximise spend in key areas to take advantage of this knowledge. For brands who see influencers as awareness drivers, agencies should continue to press brands to provide meaningful data to track their impact on lower funnel metrics, to protect themselves from the situation I’ve spoken about previously, whilst also getting under the skin of the purpose of influencers as a part of a wider sales funnel. Data & Insights departments will be the heroes here.
For Brands: Brands need to challenge their agencies to demonstrate the true value of influencers across their wider sales funnel, and across their customers journey. Internally there needs to be collective alignment on the value of influencers to drive key performance metrics, and boundaries need to be set that give the appropriate amount of time for ‘success’ to be seen.
Talent Managers & Marketing Agencies Unite
Influencers have become their own worst enemy. Their importance has become challenged by the brands who once vied for an opportunity to work with them, now only wanting to do so when they can sense a guarantee of key performance metrics. The agency, acting as ‘piggy in the middle’, finds itself courting the expectations of the brand to work with influencers on a ROI metric basis, and the influencer or their talent management who work produce fees that for the most part make zero sense on the surface - not aligned to an industry benchmark or performance tracking in any way. The commission model is at part to blame. But, this is not the only issue. For the most part talent managers have either come from the traditional talent space, which was never as focused on metrics (another symptom of our fast-developing industry where everything can be tracked to some extent), or they got their start in the influencer space, fresh out of school, some started their own businesses, others joined inexperienced teams (inexperience is the key word and it has lead to this mess of an ‘economy’). At the centre is the creators they represent, so many different expectations and no guidebook on how much their time is worth, and rightfully so, the same way we all have personal salary expectations, creators value their time differently and this ends up back on the desk of the brand. However, similar to our personal employment, when performance is poor some managers question the value they’re getting, when creators are seeing a dip in performance the question begins to loom around the value exchange for brands. The economy has not matured enough to realise that at the end of the day the brand/company controls the payout and when there’s thousands of new creators each year, competition is ready and raring to go. Supply and demand does not favour the creator and it’s vital that it’s not forgotten when pricing out.
The fundamental issue here boils down to a lack of transparency around quoting models. Similarly to creative agencies, the split between creative output and metric performance creates a variation of approaches for budgeting. But there seems to be little in the way of justification for how some fees are established and little is being done to educate the wider industry on the ROI of influencers outside of their direct metrics. Where brands are quickly pushing for more quantitative data from their influencer spend, the experts are not working as quickly at establishing the value exchange that is gained from influencers outside of their views/engagements/click-through, eventually this will hit a pivotal point for some brands where I believe spend will be cut rather than reinvested.
For Agencies: Challenge talent managers to provide metric-justified rate cards that can be used to quickly demonstrate to brands what value can be returned. Demonstrate research has been done around previous brand campaigns and the sentiment from the community. Be prepared to further justify creators via metrics from the outset. Most importantly, regularly compare this to wider marketing channel performance to understand the impact creators drive in comparison to other forms of marketing and proactively educated brands on this before the question is raised.
For Brands: Continue to push agencies on measuring the individual influencer performance, whilst also spending time collaborating with them on how influencers can drive full-funnel metrics via the halo effect or through sustained & delayed impact of their assets and alignment with your brand.
It’s safe to say the influencer marketing industry is far from dying, but I’m not sure it’s thriving, and it bloody well should be. To continue to drive meaningful growth in the space, it’s on agencies and brands to better connect the purpose of influencers with their wider channel mix, but it is equally important that talent and talent managers find a way to align with brands at the point of contracting on what success truly is for a campaign.
