Eran is the founder and CEO of LEADERS, a leading influencer marketing group, driven by technology and serving top consumer brands.
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Influencer marketing has become a mainstay for both major and minor brands in a variety of industries, with creators supporting both B2B and B2C marketing campaigns and 93% of marketers reporting that they use influencer marketing as part of their strategy. And with 89% of marketers saying that the ROI from influencer marketing is the same or better compared to other communication channels, according to the same source, the focus of the upsurge in influencer marketing has mainly been on its impact for brands.
A less-discussed aspect of the impact of influencer marketing’s success is how it is transforming influencers’ scale of opportunities. Indeed, more influencers are waking up to the power of directly monetizing their audiences, using knowledge collected over the years to move up the value chain and launch their own ventures. By cutting out the middle man, influencers can make the most of their knowledge about their communities—their likes and dislikes—and the type of content and gentle promotion strategies that work the best.
This is critical information that brands can rarely access when working through the narrow lens of a targeted marketing campaign. Influencers have the scale, experience and feel for their communities that can give them a competitive edge in effectively communicating with their followers, granting them a keen sense of where opportunity lies to launch a new product or service.
I believe there are a few reasons why influencers are deciding to launch their own brands.
They can showcase what they’ve learned and turn a profit from it
While working with brands, influencers often need to adapt their styles to suit the brands’ messaging and help reach the advertising goals. While doing this, they become experts in marketing, content creation and self-promotion. When they launch their own brands, they can put everything that they’ve learned to work but according to their own values and preferences.
What’s more, because they have become experts at communicating with their loyal audience, they have low marketing costs paired with high engagement, which is an obvious benefit in that it downplays the risk involved in launching a new venture. Influencers want to be able to show what they know, and if they can profit from it, why not!
Customization and personalization are key parts of the social commerce revolution
Social commerce is expected to reach $958 billion in sales in 2022, making it the next frontier for e-commerce sales. As influencers are closely tied to their communities, they regularly invite feedback that creates an air of transparency. The space that they create to listen to their followers plays into online shopping trends aimed at full customization and personalization—the next step in the social commerce revolution.
The products that influencers create feel more unique and one-of-a-kind, and followers feel as though they have contributed to their creation, especially if influencers decide to fully involve them in the process. It seems that this follower-based co-creation strategy is bound to succeed, driving influencers to embark on their own business journey, earning higher levels of trust from customers that they already communicate with on a regular basis.
Their days as brand ambassadors may be numbered
Influencers are driven to launch brands because they feel that their appeal as brand ambassadors could wear off, and they want to secure their future as creators. There is also the issue of bots and fake followers—of which social media users and brands are becoming wary. This leads the influencers themselves to question how they can continue to make a living while doing what they love, which is where the idea for launching a venture enters the picture. Many influencers want to do more than just be the face and voice for other brands’ marketing campaigns, and some realize that their social media clout could actually go a long way in securing their financial future.
Now that we understand why influencers are launching their own ventures, the next question is, how are they doing it?
Being an influencer alone is not enough to launch a successful brand. Influencers need to have a wide and diverse base of followers, a highly engaged and loyal community, and the skills to launch products or discover the right partners to work with.
One of the top ways that influencers are launching their own brands is through co-creation with existing companies. By launching their own lines or capsule collections, influencers are able to remove some of the initial risk in launching a venture on their own while still expressing their own style and values. This is a very common trend in the beauty, fashion and jewelry markets.
For instance, at LEADERS, we are working on a co-creation project called MADAM, which is a jewelry brand created by a local influencer that we support by taking care of the social media management services and logistics, like shipping and packaging. The influencer is responsible for the creative direction and design of the products, while we provide her with our boutique influencer marketing services, sharing the profits from the venture.
There are also influencers who are going out on their own to launch brands and products, sometimes even competing with companies that they previously worked with. One unique example of discovering opportunity while being an influencer is Italy’s Chiara Ferragni, the Milanese blogger who launched The Blonde Salad and has since become one of the most famous and successful influencer entrepreneurs, launching the Chiara Ferragni Collection. She was one of the first influencers to realize the power of her voice in driving consumers to purchase and consider new trends, which is why she has been able to expand her business and become a serial influencer-entrepreneur (with the help of investors, of course).
It looks as though influencer ventures could be a new frontier for creators as they fully, and permanently, establish their presence in our digital lives and shopping experiences. I believe that we’re going to be hearing a lot more about influencer-led and founded ventures in the years to come.
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