A Complete Guide to Influencer Marketing

From managed campaigns, companies, marketplaces, analytics tools, influencer customer-relationship management and more, influencer marketing is growing exponentially.

Virtually every other week, another “influencer marketing platform” hits the market. From managed campaigns, companies, marketplaces, analytics tools, influencer customer-relationship management and more, influencer marketing is growing exponentially.

There is good reason to believe that influencer marketing is the fastest-growing marketing channel this year.

84% of marketers surveyed by eMarketer said they planned to launch an influencer campaign within 12 months.

We’re only halfway through 2016 and we’ve already seen three acquisitions in the space.

The Google trends graph for “influencer marketing” is a perfect hockey stick.

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As the market booms, hordes of companies are trying to catch the wave. While competition benefits everyone in the long run, in the short run, it can cause severe issues. Some of the major problems marketers currently face are:

  • Little transparency over influencer pricing and vendor commission fees.
  • Lack of standardized metrics to track return on investment.
  • Managed campaign companies running campaigns manually disguised as technology “platforms.”
  • Large price markups from vendors.
  • Too many options to choose from leading to analysis paralysis.

In the past month, I’ve taken dozens of calls with executives from brands, banks and venture-capital firms, all of whom are trying to wrap their heads around the influencer marketing landscape. This post will help shed light on the influencer marketing landscape and upcoming developments.

The ownership and software spectrum

Companies in the influencer marketing space can be placed on a spectrum going from providing you with less to more ownership over the influencer relationships and from less to more software. The spectrum spans three groups (note: Some companies may be part of multiple groups):

  • Managed campaigns: These are companies that run full-service campaigns for you. They act as a middleman between you and influencers, although they mostly do not have exclusivity with influencers. They have no proprietary technology and bill you a flat fee for the campaign, from which they take a cut.
  • Marketplaces: These companies have a network of influencers that can be hired through their online portals. They have some proprietary technology and bill you a commission on each influencer payment.
  • Software as a Service: These companies provide software for you to manage your own influencer relationships and programs. You own the influencer relationships. They charge a software license.

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I am consciously leaving out public relations, advertising and marketing agencies, despite the fact that these agencies increasingly control the influencer marketing budgets. I do not consider them as influencer marketing companies, but rather agencies with an influencer division. Many of these agencies work with managed campaigns, marketplaces and SaaS companies, so I consider them buyers, not vendors.

The other group that is left out in this spectrum is talent agencies, such as United Talent Agency and Creative Artists Agency. These agencies have exclusive contracts with influencers and take a cut from every payment going to their influencers. Although some of these agencies are starting to operate like managed campaign companies, they are mostly talent management companies rather than marketing ones.

Let’s look at each influencer marketing company category in more depth.

Managed campaigns

These companies sell full-service influencer marketing campaigns.

They manage the influencer relationships, campaign coordination and influencer payments. They charge a flat-fee for the campaigns and offer little to no transparency into their commission or how the budget is spent. Examples include MCNs like Maker Studios and FullScreen and companies like Niche and MediaKix.

It is common for managed campaign companies to brand themselves as “influencer marketing platforms.” In reality, they sell campaigns and run them on spreadsheets. Also, managed campaign companies build an iron curtain between you and the influencers and earn their revenues by taking an undisclosed cut off of your spend. However, keep in mind that you can contact and work with most influencers directly.