Influencer marketing is continuing to expand in 2019, as budgets increase and influencer marketing spend climbs towards $5 billion by 2020. As more brands invest in this high-value channel, more influencer marketing companies are emerging and adapting to keep up with this maturing industry. According to an analysis by Mediakix, influencer marketing companies are worth nearly $3 billion in valuation* — and they show no signs of slowing.
In the face of such rapid evolution, the influencer marketing landscape can be difficult to understand. First, YouTube MCNs (multi-channel networks) were all the rage. Then, the term “MCN” fell out of favor, and those companies became networks, media companies, and MPNs (multi-platform networks) instead.
The term “platform” has also become a confusing catch-all for influencer databases, marketplaces, networks, and tools. In the last few years, influencer marketing agencies have been on the rise and various media companies have surfaced to churn out engaging social content. How do you keep it all straight?
Although it’s impossible to draw definitive lines between different types of influencer marketing companies, some basic categories do exist in today’s ecosystem. We attempt to break these categories down, and provide a clearer understanding of the influencer space.
Influencer marketing agencies partner with social media influencers to plan and execute paid sponsorships on behalf of their clients. As influencer marketing grew in popularity over the last five years, some established advertising agencies added influencer marketing to their list of available services. Beginning in 2011, however, several agencies cropped up that specialized exclusively in influencer marketing, such as Mediakix and HelloSociety.
The main reason brands partner with influencer marketing agencies is that successfully executing influencer marketing campaigns is incredibly complex. Influencer marketing agencies can handle a broad range of difficult tasks, such as:
The human element of influencer marketing adds additional risk for complications compared to other digital marketing channels, such as PPC, paid social media advertising, and display advertising. Influencer marketing agencies can leverage years of experience to help clients mitigate these risks.
Many major brands use agencies for large-scale influencer marketing campaigns because agencies have developed unique insights, creative strategy, and industry connections. Influencer marketing agencies offer the benefit of:
That being said, influencer marketing agencies aren’t right for everyone. Here are a couple reasons they might not be the perfect fit:
The term “influencer platform” applies to a wide array of technologies, but within the influencer marketing industry it generally refers to a two-sided digital marketplace where marketers can find and recruit social media influencers for a campaign. The term “influencer database” was once more common and referred to large directories where companies could search, filter, and vet influencers (but not necessarily hire them or track their campaign performance). Today, many top influencer marketing platforms have rolled databases into their technology, enabling brands to filter, identify, connect, hire, and pay influencers in a single place.
The term “influencer marketplace” has also taken some twists and turns. Originally, an influencer marketplace referred to an influencer marketing company that developed a roster of influencers and connected them with brands looking for influencer partnerships. Over time, however, the term has loosened and evolved. For example, TapInfluence refers to their large platform of “opt-in” influencers as a “marketplace.” Sometimes, the term “marketplace” is used in combination—or even interchangeably—with “platform.”
Platforms can provide ease of use and accessibility for companies looking to test influencer marketing on their own. Benefits include:
Platforms offer convenience to marketers, but they also have notable limitations:
The following are some of the most established influencer marketing platforms in the industry, and have been around for several years. These platforms maintain a large marketplace of influencers, and have over 20 employees:
Studios and talent networks have evolved considerably since the dawn of the influencer industry, back when YouTube was the primary channel for social influencers.Originally, MCNs emerged alongside YouTube to help Creators grow their audience, publish content, and secure advertising deals. Around 2016, however, it became clear that the business model of splitting ad revenue between YouTube Creators, the MCN, and YouTube was flawed. As popular influencer channels like Instagram blossomed, the traditional MCN simply couldn’t hold up in a multi-channel ecosystem.
Some networks, like AwesomenessTV, were able to innovate by creating original, branded content in-house, rather than just managing disparate influencer channels. However, the direction of most YouTube MCNs simply didn’t make sense, and industry giants like Studio71, Big Frame, Otter Media, and Fullscreen ended up going through a long series of mergers, dissolutions, and acquisitions.
Today, many studios and talent networks are diversifying their approach to meet the needs of this fast-changing industry. Here are some ways MCNs are evolving to meet the needs of the industry:
This category remains in major flux, and has significant crossover with other influencer marketing companies, such as agencies, networks, platforms, and talent representation.
While it’s tricky to nail down the complete list of influencer studios, there are several well-known studios and talent networks that have shaped the industry:
While there are hundreds of talent agencies in the business, there are a select few, such as CMA, WME, and Wasserman, that represent the largest concentration of top social media influencers. Many of these talent agencies also represent celebrity talent, such as actors, athletes, and musical artists.Marketers looking to partner with mega-influencers and celebrities on social media will likely need to initiate, negotiate, and operate through their talent manager. If working with an influencer marketing agency, however, the agency will handle the contract negotiation, communication, and campaign management on behalf of the client.
These global and national talent agencies represent a wide variety of celebrity talent, including social media macro- and mega-influencers:
The influencer marketing industry has spawned a variety of technology and software designed to optimize the performance of influencer campaigns. These tools solve industry challenges for marketers, other influencer industry companies, or even influencers themselves.For example, Paladin Software helps networks and talent agencies manage creators, campaigns, and payments, while Patreon helps influencers monetize their content. There are also tools like BuzzSumo, which helps marketers identify trending topics and influencers, and analytics solutions like Tubular, which provides advanced data on social video performance.
Marketers use a wide variety of tools for influencer marketing, including some used more broadly for social media management. However, the following represent some of the most popular tools leveraged by both brands and influencers for influencer marketing optimization specifically:
As the social media landscape continues to transform, so will the ecosystem of influencer marketing companies. Some influencer industry companies will undoubtedly expand, a few will fold, and others will merge to form new types of companies we can’t imagine yet. As marketers and influencers continue to make money from sponsored content, the $3 billion value of influencer marketing companies will inevitably climb.
We also know that the cultural significance of social media influencers isn’t slowing down. As audiences change, social media platforms evolve, and the next generation of creators arise, the industry will continue to find better ways to help influencers — and brands — connect with their fans.
* This analysis was conducted based on a list of nearly 100 influencer marketing companies with over 20 employees, and excluded talent representation and talent agencies. Data was pulled based on venture capital portfolios, news articles, third-party databases, and publically available funding information.
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