Blog: Who owns the influencer budget?
Should influencer costs be handled by media buyers, PR, in-house teams, or other agencies? Influicity founder and CEO Jonathan Davids details the options.
By: Jonathan Davids
In a recent survey, eMarketer found that 48% of advertisers are increasing their influencer spend in 2017. A further 23% will maintain current levels. And within many corporate marketing teams, there are questions around not only how much to spend, but who should spend it.
At Influicity, we recently got a call from the “digital centre of excellence” at a global CPG company that is quite active in the influencer space. They had a simple request: Could we help them understand who should be in charge of influencers?
While every organization is different, here are a few general findings, based on where the dollars are moving within our platform.
Placing the influencer budget within a media buy makes sense for a few reasons. Influencers are selected, at least in part for their wide distribution and reach. Their pricing is often looked at in the context of a CPM and because of the large investment needed for top influencers, media dollars are necessary.
On the other hand, influencer activations could require a heavy creative component, which media buyers aren’t always set up to manage. This is why many influencer campaigns are done with a partner who can take on the management/logistical components.
Larger media buyers, like Dentsu Aegis Network, MediaCom and IPG Meidabrands, have established dedicated divisions to manage the growing influencer/content demand – respectively, The Story Lab, Mediacom Beyond Advertising and Society.
As an estimate, we see half of all influencer activations being funded by media buyers.
PR is a natural spot for influencer management. Long before big brands were comfortable paying an Instagrammer for product placement, it was the PR folks who were sending them product in exchange for a shout-out. And it’s quite common for PR firms to maintain large lists of social influencers who regularly get event invites and lots of free product.
For brands looking to work with a large number of influencers, with less of an emphasis on reach, a PR firm is a good option. We’ve seen shops like Media Profile, NKPR and National doubling down on their influencer focus, to better serve clients.
About 20% of influencer activations are funded by PR firms, however this does not necessarily account for unpaid influencer activations, which are frequent.
Internal brand marketing
Some brands have opted to invest internally within their own marketing departments. L’Oreal Canada created in the Content Factory in 2015 and I’ve generally heard positive things from how brand managers have been utilizing it.
In another case, one of our large toy clients recently hired two people with the title of influencer manager.
Roughly 15% to 20% of influencer campaigns are being overseen by brand managers directly, although there may be help coming from elsewhere because of the legwork involved.
The rest of the activity comes from across the spectrum — digital agencies, creative agencies, experiential agencies, and others who leverage influencers in different ways.
For example, one event marketing firm regularly uses influencers to attract bigger crowds to their events. A shopper marketing firm leverages influencers to drive in-store traffic.
Looking forward 12 months, many brands will define the influencer strategy and hand it off to a specific team. One thing is clear: it’s not going to be one-size-fits-all.
In the case of our CPG client, we advised that they do the following:
1. Consult with each brand internally on how/if they would be leveraging influencers in the coming year. Then have those brands earmark an “influencer” budget.
2. For the next year, leverage the “digital centre of excellence” as the core team in charge of running influencer campaigns. And use that time to educate and provide tools to each brand so they can become self-sufficient.
3. Various agency partners, along with Influicity, are providing resources to the brand teams along the way for training, ROI benchmarks and more.
I suspect many brands will be investing in the structure and strategy around influencers. One thing is clear: it’s not going to be one-size- fits-all.
Jonathan Davids is the founder and CEO of Influicity.