Instagram’s New Shopping Tool Will Likely Be a Boon for Influencers

Just like publishers, influencers have to ride the many changes social platforms bring to their business—for better or worse. From algorithm changes to the FTC cracking down on sponsored ads, life’s not always as fun and curated as it appears in the feed. But the latest change appears to be for the better. Instagram's newest tool for creators lets them tag products in their posts, making it easier for users to shop some of their favorite looks from their favorite influencers. Influencer marketing experts say the new feature, which is currently only available in beta to 50 creators, may end up working out in favor of influencers by giving them another bargaining chip for brand partnerships, collecting valuable data about driving consumers towards a purchase—while still generating additional revenue through affiliate links. “I think influencers are excited about it,” said Mae Karwowski, CEO and founder of influencer marketing agency Obviously. “They are excited to better show the amount of traffic and revenue they could drive. It was just really hard to do that before this group of tools they released.” Karwowski said the new tool can add to an influencer's flat fee for partnering with a brand, if they opt to tag products in a post. And while there’s some concern that affiliate-generating models like RewardStyle’s LiketoKnow.it app will see less traffic or influencers using the platform, Karwowski said it’s not too big of a concern for influencers—especially if they’re a smaller or more “niche” creator, like an influencer with 50,000 followers or fewer. As it stands now, when a creator does tag a brand’s product in a post, there’s no affiliate link attached to that tag. [kickout id="1"] “Influencers will continue to use the affiliate option when driving sales because it definitely has an impact to their overarching income and revenue for the year,” said Reesa Lake, partner and evp of brand partnerships at Digital Brand Architects. “And if this new tool only benefits the brand, they’ll seek ways to use affiliate links where available and when they can.” Kamiu Lee, CEO of influencer marketing agency Activate, said the affiliate link solution usually gives influencers two key assurances: they know how much they’re going to make off a sale and they receive the attribution for making that sale. She said while the affiliate link business currently on Instagram isn’t the smoothest experience, since consumers click out to checkout, she thinks influencers will continue to use it until they see what sort of insights, compensation and attribution they’ll get in return for tagging a brand in a post. If a brand rewards influencers for tagging products in a post, she added, there’s a possibility the industry will see a decrease in affiliate links. “[It’s] important to understand from the influencer side what they will see with regards to conversion, or even seeing how many people click through to add to cart and what part of the funnel they are able to drive consumers to,” Lee said. Alison Stiefel, vp of marketing at Shopstyle, said affiliate links is far from over since influencers can use it across a variety of platforms—not just Instagram. [kickout id="2"] “We would expect that these types of integrations create a richer, more shoppable experience within the platform and less reliance on third-party applications,” Stiefel said. “As influencers grow and diversify, it becomes increasingly important to own their content, audience and ultimately, business. We know from influencers in the ShopStyle Collective community that they value innovation, retailer diversity, data and insights that help them improve performance and create engaging content for their followers.” Affiliate linking is also still relevant because right now, influencers will not get a cut of the sales they drive through Instagram's product tags, while they do through platforms such as LiketoKnow.it. If the potential does exist to earn a cut through the use of another platform, why would an influencer use Instagram's new product tagging option when they aren't able to share in the revenue it's generating? One reason is because brands will likely add that requirement in their contracts. But then, of course, there's data. According to Instagram, both brands and creators receive metrics such as engagement, reach, product views and clicks. Lake said this data will only further prove the power of influencer marketing for both brands and agencies working with these creators. Agencies can now look across their talent and see which products are selling with which influencers, at what price points and categories and so much more granular information to set them up with the right brand. “This is just another opportunity to show how the future of retail is shifting and to show [that] shopping through influencers is obviously a big business for brands,” Lake said. “[T]his tool is going to give us a lot more insight to be able to show brands the value.”