Published 19 July 2017 Category: Entrepreneur, Business, Marketing, Insights

Does Influencer Marketing Need a New Model?

In today’s technology sector, the marketplace business model garners both interest and attention. The model’s ability to produce massive returns for founders and investors once a specific marketplace reaches critical mass is undeniably sexy. eBay is perhaps the best-known example of this, and Uber is now another. The model has found success in a wide range of industries and verticals, and now it has become the dominant model for the influencer marketing space.

The Birth of the Influencer Marketplace
Marketplaces hold an important place in mankind’s history. Their genesis can be traced back to ancient times as locations where society would come together to buy and sell goods and services. An influencer marketplace is very similar to this, but rather than a physical location, the marketplace is an online, digital platform where businesses and social influencers can log in and engage with each other for commercial transactions like sponsorships and promotions.

When examining why the marketplace model has taken hold of influencer marketing, the model’s attractive ability to scale and drive revenue for founders and investors is absolutely one reason. When a new concept like influencer marketing comes along, it’s much easier for founders to default to existing business models rather than pioneer new ones. We’ve all heard new founders using analogies to describe their product or service – “We’re Uber for doggy day care,” or “the Kayak for bus travel.” In other words, one way to innovate is to apply similar models to newer markets, and oftentimes it makes sense to do so, but sometimes it doesn’t.

Implications of the Marketplace Model
While in some ways influencer marketing is new, it has been around in the advertorial format and “word of mouth” marketing for a very long time. However, from a cultural perspective, the concept of influencer marketing has found new life. We’re living in an unprecedented age of integrated communication, but also in an unprecedented age of creation.

In this new age of creation, individuals (with access to the internet and computers) are able to earn livings by focusing on their passion. They can create videos, produce music, host their podcasts, and design/print/sell their own 3d products. Creators can now follow passion, and when a creator’s passion comes through in their media content, the content has an enhanced ability to persuade its audience. This cultural shift has been happening slowly for decades – and we’ve seen it with older media like writing, radio, music.

With this cultural shift in creation, we need to ask ourselves, as business-owners, as content creators, and as consumers, is the marketplace model best suited for the nuances and peculiarities of the influencer marketing industry? The marketplace model makes sense when products are clearly defined.

The secret sauce is not the technology, although that plays an important supporting role. It is the single-minded obsessive focus on solving one big universal problem for the buyers, and removing that friction that existed in transacting offline. When the solution is understood, marketplaces will grow exponentially (when built and solved to scale).

In turn, one has to wonder if the peculiarities of influencer marketing will prohibit a single influencer marketplace from reaching the critical mass necessary to scale. If they cannot, marketplaces will remain largely what they are today: services-based marketing agencies operating under a technological cover. But how do we transcend this model?

Transcending the Marketplace Model
A simple metaphor for discussing what is currently happening in the influencer space is the following proverb:

“give a man a fish and you feed him for a day; teach a man to fish and you feed him for a lifetime.”

Rather than someone else, a third party, catching your fish and preparing it for you, you’ll learn how to go out and find the kind of fish you want for yourself.

Applying this metaphor to the marketplace model of buyers and sellers, the relationship between business and influencer begins to look more like partnership guided by the pursuit of mutual gain. Businesses and content creators are now going outside of their comfort zones and learning how to fish for themselves.

Brands and businesses must build these relationships themselves because authentic relationships are at the core of what makes influencer marketing successful. When the influencers and brands are both motivated by the same values, the ultimate product, or resulting content, takes a more explicit strength. If the motivation is purely monetary, the promotion may not be genuine, which may be more obvious to the audience.

As the industry matures, and as more content creators enter the space and begin to monetize the work they love to do, it will be in their benefit to own relationships with advertisers and collaborate with them directly. Like most endeavors, be it creative or business, those who control their own destiny are the most likely to flourish.