Part 3 - The New Brand Builders: Digital Influencers and Creators Take Control of Their Economic Destiny. Brands Should Take Notice.
Today’s digitally-native influencers and creators bear little resemblance to the more naïve YouTube stars of a decade ago – not only in terms of the growth of their highly engaged global audiences, but in their brand and community-building savvy. This is changing the ways they are considering engagements with brands and in building their own brand presence.
As one of the original YouTube talent managers and now as a high-profile creator partnership leader at Patreon, Sarah Penna has had a front-row seat to this change. “When I first got into the creator space, there was a very big distinction between celebrities and YouTubers. Influencers and creatives as defined today didn’t even exist,” notes Penna. “When celebrities would get on social media, brands saw it as a cheaper path to a back door endorsement. And because it was on YouTube, they valued it less. With digital influencers and creators, brands saw their social media presence as a low-cost advertising channel that was part of the company’s upstream brand strategy. That’s changed today.”
What Is Influence?
The decision of a digitally savvy brand to work with an influencer-creator is no longer considered a second-tier choice in comparison to an artist or athlete deal, especially for a Gen Z or millennial audience. And the fame of noted artists or athletes doesn’t necessarily translate to influence, no matter how many followers they have. “Just because you’re aware of someone, it doesn’t mean you’ll buy from them,” proclaims Brendan Gahan, the Chief Social Officer at creative agency Mekanism. “Everyone knows Emma Thompson, but people TRUST Emma Chamberlain. The relationship a movie star has with an audience is that of a fan. What a creator has is more akin to a friend.”
Trust and a feeling of intimate familiarity between influencer-creators and their audience of digital friends arise from the psychological phenomena of parasocial bonding found inside social networks. Pre-digital media, parasocial relationships were limited to celebrities and politicians. With the advent of social media, it is now commonplace beyond those boundaries. The valuable ability to inform and influence arises out of these relationships.
For many creators, there is a movement back to a more localized and specialized community of interest. Brands should be aware that there is power in the niche or hyper-niche community, where there is strong influence, engagement, and loyalty. Some creators who have legions of followers, but rarely authentically engage, cannot duplicate the loyalty factor. Brands need to realize that in the influencer and creator community – size doesn’t always matter.
This new organic power of influence and loyalty in the creator community may be one of the reasons that branded content is declining in effectiveness in some markets. There is a belief that old school branded content works best only when there is a tightly controlled cultural arena with limited outlets, in which brands act almost as intermediaries between a celebrity and fans. In that situation, brands are essentially buying fame by controlling the celebrity-fan relationship. With increased competition for attention in the marketplace from the work of digital creators (particularly in niches), the monopolization of the fame relationship has been broken. Branded content may not breakthrough and engage at the level of content created by native digital influencers – within social networks and the conversations that surrounds them.
Look at the top twenty most followed TikTok accounts - there is not a brand to be found, except for TikTok itself. On Instagram, only Nike and National Geographic make the top twenty cut (again other than the Instagram platform itself). And while there are several international entertainment companies among the twenty most subscribed YouTube channels, there is not a consumer brand to be found in that ranking.
Why is that?
As captured in Brandan Gahan’s earlier comment, Gen Z (and to some extent ‘younger’ Millennials as well) trusts and feels a personal relationship with digital creators – and not directly with brands. In addition, because of internal strategy and approval processes, brands often can’t act as quickly as an individual creator to respond to cultural moments. And it is storytelling around those time-defined moments that is a big driver of engagement. However, brands are improving their ability to respond – through (not surprisingly) partnership with creators (and a few savvy celebrities) as exemplified in the now classic response from Peloton created by Ryan Reynold’s agency, Maximum Effort.
Brands can clearly benefit from relationships with digital influencers and creators - both in rapid creative response to cultural flashpoints as well as through multi-year curated relationships. The result is the accelerated evolution of traditional branded content (work for hire) into more co-created storytelling and community.
Desperation No Longer Defines the Brand Deal
The relationship that many creators have built with their audiences is incredibly powerful, and they have accomplished this without relying on the intermediation of brands. The direct nurture and ownership of the audience relationship means a decline in desperation for any brand deal that crosses their path. As Gahan notes: “They are not having to accept every brand deal that comes their way, as brand deals are no longer the only major way to monetize at scale. Instead, they can hold out for true partnerships which are more lucrative and long term - which I think are going to look more like athlete endorsements. Brands will have to partner with creators - working with them long term, doing co-branded products, integrating them into ad campaigns, appearing at events, etc.”
A Checklist for Engaging an Influencer or Creator
Many of these ideas will require brands to make changes in the resources and processes required to scout, manage, nurture, and measure new digital influencer-creator relationships.
1. Engaged, Not Just Big: For brands, the biggest (in terms of followers or a single viral moment) influencers and creators are not necessarily the best choice. The most important criteria is to understand the relevant audience niche and look for individuals already authentically engaged in that space – and even with the brand.
2. Long Term Strategy Over Silver Bullet Impulses: It takes significant effort for brands to onboard creators-influencers for collaborations. Gahan warns that: “It’s often wasteful to pursue ‘risky one-offs’ that can lead to a dilution of the trust and credibility of both creator and brand.” In committing to working with creators over the long term, a brand needs to invest over time in building the trust and communications that can lead to quick and collaborative creative reaction to trends and cultural moments.
3. The Power of Well-Curated Groups Versus Betting on a Single Individual: Because of the transparent nature of social channels and the prevalence of cancel culture (even temporarily), it is wise for a brand to thoughtfully curate a set of relevant relationship with influencer-creators – and not bet their existence on a single individual who may prove to not be the most relevant or reliable bet.
4. Depth Outperforms Breadth: Working with influencer-creators should be treated more like a brand ambassador relationship rather than as an advertising outlet. Then the collaboration becomes more of a co-branding exercise that is highly personal despite the goal of scale. Brands need to think more about optimizing for depth of community engagement as opposed to the pure breadth and scale of a traditional ad campaign.
When Community Eclipses the Brand Deal
For creators, brand deals and subscriber membership are not necessarily mutually exclusive paths. There are also creators who have little or no interest in brands. These individuals are primarily motivated to develop robust and direct (not platform controlled) relationships with their fans around their area of expertise – so they can monetize that community themselves. In these instances, brands may see an opportunity to engage as advertiser or sponsor of that individual’s media or craft.
With her intimate knowledge of the unpredictability of the creator ‘earning curve’, Penna notes: “Creators are looking for a way to remove the traditional ‘lumpiness’ of payments in their life which is extremely stressful. And they want to be able to reinvest in their art. Pursuing subscribers that pay for access and unique experiences is how they approach this as opposed to large brand deals. And they don’t want to be subject to an algorithm in reaching their audience.”
The Future for Influencer and Creator Deals
The nature of the influencer-creator relationship with brands has rapidly evolved away from the rudimentary ‘pay per post’ and ‘take a picture with our product’ strategies. Real collaboration and co-creation are now on the table.
Niche subjects and highly focused communities and content are successfully competing with - and even outperforming (give the right metric) - broader mainstream media for consumer attention. And beyond the limits of brand advocacy, there are members of the creator community concepting and directing original commercials for TikTok and other platforms under production contracts with brands.
Opportunities for economic engagement between digital influencers-creators and brands will demand increased consideration – and creative ideation – with both nimble challenger brands now in the game competing with the most digitally-savvy Fortune 500 brand.
In This Series on The New Brand Builders:
Part 1 - The Market Power of Icons, Influencers, and Creators
Part 2 - Paid Mercenary or Energized Investor? Artists, Athletes, and Their New Relationship with Brands