What will the decade ahead bring for the Age of Influence?
As the decade comes to a close, one of its most prominent signifiers, influencers have come under the microscope recently led mainly by Instagram’s removal of public “likes” from the platform. Sending shockwaves through their universe when it was confirmed globally in mid-November, the consensus after the dust settles is that it might not be such bad thing after all. The Impression sat down with Estate Five’s founder and partner Tina Craig of BagSnob and VP of Marketing Jamie Wachlarz, along with Leah Logan VP of media product strategy and marketing for Collective Bias, to gain insight on the state of influencer economics and how these changes will affect the sector.
Instagram publicly stated that the reason for removing the feature was to counter bully culture and let users focus on content rather than social standing. That response sounds well and good and certainly makes sense in the wake of bad press parent company Facebook faced lately that ranged from allowing the spread of false information and hate speech to affecting the outcomes of political elections such as POTUS Donald Trump’s 2016 win.
But is the reasoning so altruistic? Instagram is generating its own publishing revenue first through sponsored posts which evolved into full-blown shoppable advertising. Clearly, they are aware that their platform has made many an influencer a rich and successful entity. Are they after a piece of that pie as well?
What most in the field of digital marketing agree is that removing the “like” gauge can lead the medium into becoming a more effective tool.
“A lot of people were petrified about the likes going away but our philosophy at Estate Five is it’s probably a good thing because it makes it less competitive and petty amongst their peer group and you can like things a bit more freely.”
– Jamie Wachlarz, VP of Marketing Estate Five
To understand this angle is to understand a bit about the genesis of Estate Five in the first place. Formally represented by DBA (Digital Brand Architects), co-founder Tina Craig of the BagSnob was looking to take management in-house and had her eyes of former entertainment lawyer Lynsey Eaton who had made a name building celebrity Instagram accounts at the dawn of Instagram. She was working for Dallas-based PR firm Droese Public Relations founder Suzanne Droese at the time. Instead of poaching Eaton, the two pitched Craig with forming a boutique size digital talent management agency that would help build and nurture brand relationships for the Influencer.
Craig is one of the medium’s pioneers and biggest fashion sector success stories. What started as a stay-at-home mom hobby for her and a college friend has turned into successful enterprise with over 1½ million followers across the various social media platforms. Craig’s genuine demeanor with her audience has led to partnerships with brands such as Hermès, Cartier, Louis Vuitton, Valentino, Dior as well as the first in 2011, DKNY handbags – which grew out of a challenge that DKNYPRGIRL Aliza Licht posed to Craig in response to a negative bag review – collectively has made millions for these brands among others. Additionally, she created her own line of handbags for HSN, consults on bags for Nancy Gonzalez X Bag Snob and recently launched UBeauty skincare in November that has sold out within 3 weeks globally substantiating her “Sell-Out Queen” nickname.
Wachlarz and Craig both feel that beyond “likes” more important are the saves and shares which count more for engagement. This is likely to strengthen an influencer’s selling power as the like feature is removed from public view. “We use a lot of analytics to show clients, to show reach of the influencer broken down by location, gender, age group but also saves and shares can demonstrate a high intent to purchase all of which can be a great way to highlight ROI to investors as well.”
But beyond that the content and transparency are sure to improve according to marketing industry execs. Logan, whose agency count Anne Klein, Coty Brands, Macy’s, Bulgari fragrance and a stable of micro-geo influencers such as Vegas-based Lauren Parry and Nashville’s Greta Hollar as clients, says it’s the marketing teams who will be most affected. Without likes, they will have to dig deeper into the metrics of an influencer’s impact when casting them by using tools such as the Inmar Influencer platforms that go beyond surface-level ‘likes’ for proof of ROI. “We sell campaigns on actual verified views of content and place value on how many eyeballs actually see the content” she added that “removing likes will no longer tempt influencers to purchase vanity performance increases which helps level the playing field for those who work authentically to build a following. Those influencers who truly do have an engaged community will rise to the top.” This is a win-win for both as marketers will also feel more confident about a spend that is more accurately quantified.
Other industry sources suggest ways that content will increase. If the motivation for a like is removed, it would affect not only which image is picked and quality could prevail over perceived popularity and diverse content such as films and stories would be amped up. The proof has always been in the comments is also suggested as they involve more effort, thought, and actual interest.
Likes are the only thing where more – or bigger is not always better. Estate Five agency has a range of talent from the well-known like Craig, Diet Prada, Alyssa Coscarelli and Ashley Stark to those considered micro which in today’s terms is roughly 50K to 150K. According to Craig they are very effective. Craig explains, “Followers can talk to them and they respond. We have a grandmother who survived breast cancer – it’s a small niche 50K but every follower pays attention. We don’t turn down by size.”
Paydays are a big topic of curiosity in the sector and recently disclosed in this BBC article. Typical rates for in-feed postings haven’t changed much since the medium took off circa 2010 which remains around $3,000 to $4,000 a post. But in those days having 10 million followers was unheard of. Still, deals that pay in the millions are harder to come by unless someone is the face of brand because those deals make it harder to prove ROI. The agency declined to disclose talent agency fees but said it is in-line with typical agent percentages that are usually 15-20 percent.
A smarter approach to the spend is required so partnerships start with the type of engagement a brand is looking for. In one case study they shared with The Impression for instance, conversion was the focus. See results below:
Sample Conversion Case
Overview: Handbag brand tapped into one luxury-minded influencer with a 1.2% Engagement Rate to promote a product launch by hosting an event and posting one IG in feed with six IG story frames.
Results (WoW): 80% increase in sales. 416% lift in sales from Instagram. 149% increase in traffic from Instagram.
Proving one’s selling power as Craig did with the DKNY bag project that was initially a marketing stunt, is where influencers can really make bank and Estate Five guides these partnerships. “Building a following is not what we do; Diet Prada shot up on their own hard work. We sift through the offers, choose which ones are good. The intention is helping them strategize and develop the voice.”
One measure of an influencer’s success is investment that major established brands are willing to make with them such as Revolve partnering with Aimee Song or Nordstrom and Something Navy. Collaborations such as those do prove who can deliver results.
One thing that is certain is the arena is pretty saturated with talent and time will tell who rises above or not.
The days of gaining 300 followers on a post or even “going-viral” are mostly in the past without substantiating news or cultural relevance behind it.
That is until the next platform comes along such as Tik-Tok. Apparently, massive follower expansion is still possible overnight. For now, that is. Check back in six months for an update, things will definitely have changed by then.