Social media has unleashed massive opportunities for a new generation of content creators earning millions and building global brands from smartphones.
In this episode, I discussed with Alessandro Bogliari the pros and pitfalls of working with content creators, which platforms you need to pay attention to, and more.
Alessandro is the Co-founder and CEO of Influencer Marketing Factory, a global agency that helps brands connect with Gen Z and Millennials across TikTok, YouTube, and Instagram.
Here’s what you’ll learn in this episode:
Understand the concept and evolution of the creator economy.
Discover predictions on consumer trends and insights on budget considerations when doing influencer marketing campaigns.
Learn actionable tips to maximize ROI when working with content creators.
What is the creator economy?
Alessandro explained it as an ecosystem where every content creator has a role. It involves content creation and everything around it, including editing, deal negotiation, and financing.
He described its evolution from a pastime to a full-blown profession involving brands, consultants, and financial firms, engaging millions globally and representing billions in financial terms.
What is the difference between an influencer and a content creator?
Alessandro made a compelling point about the distinction between influencers and content creators. He explained that influencers have created content and built their personal brand, influencing actions such as product purchases.
On the other hand, content creators have traditionally focused purely on their content without necessarily inserting their personal identity into it. However, he noted that many content creators are also becoming influencers.
Therefore, a brand's decision to collaborate with either an influencer or a content creator would depend on whether they want to utilize the influencer's personal brand for product promotion or highlight the content through a content creator.
The Most Supportive Platforms for Content Creators
According to Alessandro, YouTube is taking the lead as the platform currently showing content creators the most love. It stands out because of its unique CPM model, which means creators get paid for every thousand impressions. This setup could let creators earn unlimited income based purely on the views their content pulls in.
He didn't discount Instagram and TikTok, though. Alessandro gave them props for trying to offer opportunities for content creators to shine and get involved in brand partnerships. But here's the thing - they've not quite cracked the code on how to directly support their creators financially in the same way YouTube has.
TikTok’s design, that addictive scrolling interface, makes it tricky to link ads to specific videos or creators, which messes with their compensation models. So despite their best efforts, they're still figuring out how to build a reliable, effective compensation system like YouTube's.
Consumer Trend in the Creator Economy
Alessandro Bogliari predicts that the number of people buying products released by specific influencers will likely increase. This prediction is based on the current trend of new-generation consumers caring about the ethos and processes behind a brand.
Influencers, being more transparent about the creation process and often personally involved from beginning to end, resonate well with these consumers. Additionally, the quality of products influencers create is often top-notch, further convincing the audience to purchase. All these factors might increase the percentage of consumers buying influencer-released products from the current 50% to possibly 60, 70, or 80% in the future.
Important Considerations for Marketing Campaign Budgets
From my conversation with Alessandro, it became clear that there isn't a one-size-fits-all approach when setting a budget for working with content creators in influencer marketing. He highlighted that it significantly depends on your company's nature and the size of your overall marketing budget. He also emphasized the need for diversification, proper tracking of metrics, and the capacity to adapt and scale up.
Here are some key points from our discussion:
The budget allocation for influencer marketing is highly variable, potentially ranging from 5% to 90% of your total marketing budget.
It's advisable to begin with a smaller budget, preferably in the five-figure range, and scale up based on success.
Diversification is crucial. Choose a variety of influencers across different platforms and with different styles.
Content should be customized to fit the specific platform and influencer you're working with.
Tracking the results of each influencer campaign is essential. Use specific tracking links for each influencer to measure sales, clicks to your landing page, and other metrics.
“Every company in the future will be a media company.”
Taking Alessandro's words to heart, "Every company in the future will be a media company." It's all about getting ahead of the curve. If an influencer campaign shows promise and starts to yield great results, don't be afraid to increase its budget. We're seeing a real shift as many companies are beginning to reallocate funds from traditional media to influencer marketing because, quite simply, it's outperforming the old methods.
How to Maximize ROI with Content Creators
A well-rounded and informed approach is necessary to maximize the ROI of social media efforts with content creators. Here are some key points Alessandro and I discussed:
Measure ROI: Utilize platforms that automatically add UTM parameters, making tracking and measuring the return on your investment easier.
Test Different Content: Do not put all your budget into one content type or creator. Experiment with different content types across different platforms; each has a unique culture and etiquette.
Understand Platform Preferences: The preferences can vary widely from platform to platform, such as the style of captions or POVs. The budget can be scaled up once a successful content style is identified.
Avoid Cognitive Bias: Brands often make the mistake of assuming they know what works best. It's crucial to remember that the customers dictate what works. Conduct A/B testing on different content types, learn from the performance, and allocate your budget accordingly.
Use Data for Optimization: Like with display ads, study the performance data, identify what's bringing the most value, and start allocating more budget towards those successful strategies. The customer, not the brand, determines what works, so testing and data analysis are vital.
Harnessing the Potential of the Creator Economy
The rise of the creator economy offers unprecedented opportunities for brands and marketers. Businesses can tap into this powerful ecosystem by understanding its dynamics, acknowledging the crucial role of content creators, and aligning with emerging consumer trends. To truly make the most of this fresh and exciting realm, it's super important to be smart with your budget, mix it up with various influencer partnerships, and always keep a close eye on your ROI.
Download the full Creator Economy Report 2023 here.
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