Enterprising brands have been using influencers for some time now. Massive predicted growth in what is called “the influencer economy” (often referred to as “the creator economy”) makes it necessary for successful marketers to acquire — and hopefully master — the mechanics of how these economies work.
According to a recent Goldman Sachs report, the creator/influencer economy could wind up representing a half-trillion dollars by 2027. As the report notes, “Goldman Sachs Research expects the 50 million global creators to grow at a 10-20% compound annual growth rate during the next five years. Creators earn income primarily through direct branding deals to pitch products as an influencer; via a share of advertising revenues with the host platform; and through subscriptions, donations and other forms of direct payment from followers. Brand deals are the main source of revenue at about 70%, according to survey data.”
To explore the role that performance-based influencer marketing plays in this scheme of things, I sat down with Noah Tucker, Founder & CEO at Social Snowball, to discuss its evolution. Noah’s platform helps brands partner with influencers for attributable revenue, managing the entire process from finding creators to payments. Our conversation highlights the effectiveness of micro-influencers and the trend of leveraging existing customers as ambassadors. Incentive structures, such as cash payouts, are emphasized for higher engagement. We also discuss the importance of seamless user experiences and compliance with FTC guidelines. The conversation touches on the rise of social commerce, particularly TikTok Shop, and the need for no-strings-attached initial gifts to influencers.
Discussion points include:
- The misperception that influencer marketing is limited to mega influencers and highlights the importance of micro influencers.
- The trend of customers becoming great ambassadors and affiliates for brands, especially as paid ads become more expensive and harder to track.
- The common pitfalls of refer-a-friend loyalty programs and the importance of cash-based incentive structures.
- The need for a seamless post-purchase experience to boost customer engagement in referral programs.
- Non-obvious industry categories where influencer marketing has been successful.
- The importance of educating creators about compliance and providing guidelines in onboarding emails.
- Why it’s best for brands to focus on influencers who are already frequently posting about other brands and products.
- The growing trend of social commerce, particularly with platforms like TikTok Shop.
- Why it’s a mistake for brands to ask for anything in return during the initial contact to maximize response rates.
