Always-On Influence: Why B2B Needs Brand Research & 11 Must-Ask Questions For Marketers

What is brand research and why is it an important step in building a successful always-on  B2B influencer marketing program? Let’s find out

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What is brand research and why is it an important step in building a successful always-on  B2B influencer marketing program? What are the key facts you need to learn about a brand that will lead to the creation of a strong ongoing influencer program?

Doing brand research right is crucial for always-on B2B influencer marketing success, but where do you start, especially with the increased importance of brand empathy and authenticity?

Don’t worry, as in the third part of our ongoing #AlwaysOnInfluence series — following on the heels of “Always On Influence: Short Term vs. Long Term for Success During a Crisis” — we’ll take the time to show why brand research is key to building a B2B influencer marketing program that features the most relevant influencers.

As a refresher, always-on influencer marketing is the practice of ongoing relationship-building, engagement and activation of a specified group of influencers to build community, content and brand advocacy.

Always-on marketing is a key facet of successful and award-winning campaigns according to new research from Cannes Lions and WARC, which have featured campaign duration as an important element in their new “Effectiveness Code” white paper research examining 5,000 award entrants and winners from 2011 through 2019.

“Even at low budgets, campaigns with longer durations and more media channels are more effective,” the Cannes Lions report notes.

“Overall, tactical campaigns with very short durations and small budgets tend to do poorly when judged on effectiveness. Just 51 percent of those campaigns converted to effectiveness award wins when entered,” the report added.

“As campaigns increase their spend, duration and number of media channels used, they become more effective. An optimum split of marketing investment is 60 percent for long-term brand building and 40 percent for short-term activation,” the report concluded, highlighting the effectiveness of always-on efforts.

Brand Research For Always-On B2B Influencer Marketing

B2B marketers have varying levels of experience with influencer marketing, from initial forays and testing the waters, to much more seasoned and mature approaches developed over many years of refinement.

A sophisticated B2B influencer marketing approach is based on a maturity model that includes conducting preliminary research about a brand to learn its needs, strengths, and weaknesses as it relates to the next steps of finding and connecting with potential influencers.

Let’s take a closer look at why brand research is important to successful always-on B2B influencer marketing programs, and at some of the methods a savvy brand-research strategy should include.

A sophisticated B2B influencer marketing approach is based on a maturity model that includes conducting preliminary research about a brand to learn its needs, strengths, and weaknesses.” — Lane R. Ellis @lanerellis Click To Tweet

Why Brand Research is Key to Successful Always-On B2B Influencer Marketing Programs

Smart brand research adds a needed dose of the insight needed for building an always-on influencer marketing program that will feature the type of well-matched industry expert collaborations that achieve supreme relevance.

By building a robust understanding of a brand’s values, you’ll gain a significant advantage over those who charge straight ahead into beginning the process of gathering a list of potential influencers to work with a brand — another feature that sets continuing marketing programs apart from one-off campaigns.

Learning more about a brand is beneficial to all parties involved. You’ll be able to make more informed decisions when it comes time to seek out influencers, while those industry experts will benefit from the knowledge you’ve already gained about their potential brand client, and the brand itself will also be setting itself up for long-term ongoing B2B influencer marketing success.

Our CEO Lee Odden is a pioneer in the B2B influencer marketing field, and he recently explored the varying influencer maturity models at play in the industry, in “5 Ways To Build A Smarter B2B Influencer Marketing Strategy.”

“When you are more sophisticated and have more experience with this, you can hit the ground running and do certain things to help a business — such as doing a pilot — and you’ll start to see some of those metrics that will get attention from executive sponsorship, and win you more budget to roll out that program in a much more significant way,” Lee explained recently on a topic he has also explored in greater detail in “Trust in Marketing: How to Build Influence with the C-Suite and on the Street with Customers.”

Turning Brand Research Data Into Always-On Influence Success

With smart brand influencer research data in hand, moving on to the process of seeking the most relevant potential influencers packs an especially powerful wallop when you understand a brand’s shared objectives, intrinsic values, and its nuanced peculiarities.

As Lee has often noted, trust is a two-way street of multidimensional elements when it comes to influencer marketing, and as B2B marketers it’s important to recognize this during research and communication with both brands and potential influencers.

“If the brand is empathizing with the influencer, they’re not only finding out if they’re topically relevant for the thing they want to collaborate on, but also they understand the influencer’s motivations, their needs, their wants, their pain points, and the return on investment (ROI) to which a collaboration with a brand will help solve those things,” Lee observed.

Truly legitimate brand-influencer collaboration also ultimately leads to stronger customer and buyer trust, as a mature B2B influencer marketing initiative recognizes the importance of first identifying and defining what marketing problem a brand is trying to solve.

Here are 11 key questions to answer during your brand research, to help solve a brand’s key marketing problem and inform a robust and mature always-on B2B influencer marketing program:

1 — What about a brand is unique with what it stands for?

Learn what makes a brand unique with what it stands for, through outreach to key team-members the the brand, examining mission statements and any history documents the organization has made available, recent press mentions, and through customer sentiment investigations via various social channels.

2 — What about a brand is compelling — why does the brand matter?

What makes a brand compelling and why should people care about it? Finding information that helps answer these important questions will go a long way in defining an always-on B2B influencer marketing program for the brand, especially when it comes time to find industry experts who match the brand’s story, vision, and organizational outlook.

3 — What is the state of the brand’s overall awareness — where does it fit in among its intended audience?

Just as brands have varying levels of influencer marketing maturity, each organization also holds a unique spot in the eyes of its intended audience, and learning as much as you can about the brand’s overall level of audience awareness will help bolster your always-on influencer marketing efforts.

Each brand holds a unique spot in the eyes of its intended audience, and learning as much as you can about the brand’s overall level of audience awareness will help bolster your always-on influencer marketing efforts.” @lanerellis Click To Tweet

4 — How is the brand perceived among its various stakeholders?

Not only the eyes of potential customers need to be taken into consideration when it comes to overall brand perception. Buyers, fans, and a variety of both internal and external stakeholders all have views on the brand that you can learn a great deal from by taking the time to research sentiment from each type of stakeholder.

This brand perception information then becomes useful throughout the influencer marketing strategy timeline.

5 — Where does the brand sit in its competitive landscape compared to those offering similar services or products?

Learning about a brand for an always-on influencer marketing program not only involves researching the organization, but examining its relevant competitive landscape.

A brand sitting atop its industry niche will have both advantages and disadvantages to consider, while a recently-launched startup can count on battling a different set of concerns — and seeing its own array of influencer marketing advantages. Having this data from early on in an always-on influencer marketing program will place your efforts ahead of those of others who take a pass on answering these important questions.

6 — How has the brand been performing both historically and recently?

Is a brand on an upswing, such as online collaboration platforms and their skyrocketing usage increases seen during the ongoing global health crisis, or has the pandemic brought it newfound struggles to overcome?

Examining brand performance trend data can provide helpful insights for shaping a robust always-on influencer marketing program tailored specifically to the needs of the brand.

7 — Who are the brand’s stakeholders?

In addition to knowing how stakeholders perceive a brand, compiling a basic list of who its stakeholders are can fast-track potential influencer outreach and vetting activities when the time arrives.

As with many of these brand-research questions, asking a variety of people throughout an organization — and not only marketers or corporate executives — can provide a more wide-ranging and realistic look at a brand.

8 — What are the brand’s plans and vision for the future?

Wherever possible seek out information related to a brand’s future plans, whether it’s through a short-term or long-term timeline of goals. Understanding a brand’s vision for the future — especially if they involve major planned shifts in focus — can make finding and lining up appropriate industry experts to meet a brand’s changing directions all the more efficient.

9 — What are the primary and secondary topics that represent solutions to a brand’s foremost marketing problem?

It’s important to identify and define what marketing problem a brand is trying to solve, and to then use this information to compile a list of primary and secondary topics that represent solutions.

Such a topic solutions list can then be consulted when researching potential industry experts to collaborate with for a brand’s always-on influencer marketing program.

10 — How is the brand marketing its solutions, and how do buyers and potential customers find the solutions they’re looking for?

If the two aren’t aligned, the information you’ve gathered from following the previous steps we’ve gone over can help harmonize the solutions the brand offers with those that buyers and potential customers are seeking.

A brand’s potential customers and buyers may be primarily looking for answers and solutions on LinkedIn* or another platform, or through search engines, while the brand might be offering its key solutions on its website in white paper or case study form.

Armed with the types of information about a brand we’ve explored, bringing the brand’s solutions to the places its existing and potential customers are actively looking for answers is a much more streamlined proposition, and one where always-on influencer marketing can thrive.

11 — What are the terms, phrases and topics most accurately associated with a brand’s problem and its solutions?

Finally, compiling a list of the keywords, terms, phrases, topics, and questions that are most relevant to a brand’s primary marketing problem and the solutions it offers will help power a smart always-on influencer marketing program.

Once you’ve used brand research to answer these 11 questions and identify a brand’s topics of influence, you’ll have a much clearer signal for finding experts who are influential about those topics, and when it then comes time to facilitate content co-creation between a brand and influencers, your earlier efforts will pay off.

These questions are only a starting point for learning more about a brand, however, and we encourage you to expand on them as needed.

With Smart Brand Influencer Research In Hand, It’s Time To Find The Best Influencers

Brand research for always-on influencer marketing offers B2B brands a great value when done right, in a process that is of an ongoing nature and not a one-and-done single campaign.

As AdWeek recently noted, “Brands leading in influencer marketing are making increasingly longer collaborations a big component of their influencer marketing strategy. It allows the influencer to best understand the brand’s values and marketing needs, enabling the development of a thoughtful strategy to deliver that to their audience over time.”

Always-on influence involves co-creating the kind of authoritative content that earns, grows, and keeps audience trust, and by asking the 11 questions we’ve explored here, B2B marketers will be well-equipped to tackle the next phases of an always-on influencer program.

Stay tuned, as we’ll be exploring each step of the always-on B2B influencer marketing journey in upcoming posts, and explaining why each portion of a continuing program is vital for ongoing success.

In case you missed the previous three guides in our ongoing series of always-on B2B influencer marketing, you’ll find them here as a helpful reference:

* LinkedIn is a TopRank Marketing client.

How to Use Instagram Branded Content Ads With Influencers

Do you partner with Instagram influencers? Want to easily turn influencer content into ads? In this article, you’ll discover how to use Instagram Branded Content Ads to amplify the reach of your influencer campaigns.

Do you partner with Instagram influencers? Want to easily turn influencer content into ads?

In this article, you’ll discover how to use Instagram Branded Content Ads to amplify the reach of your influencer campaigns.

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Why Use Instagram Branded Content Ads?

According to Instagram, branded content is defined as “a creator or publisher’s content that features or is influenced by a business partner for an exchange of value (for example, where the business partner has paid the creator or publisher).” Instagram branded content posts are created by influencers to promote a particular brand or business in return for some sort of compensation like money, products, or services.

All branded content posts have a “Paid Partnership with [name of company/brand]” label under the influencer’s Instagram handle, making them easily recognizable. This ensures better transparency of paid collaborations and clears up any confusion in the viewer’s mind.

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People engage with a lot of branded content on Instagram. According to a Facebook for Business survey of Instagram users:

  • 42% of respondents said that branded content helps them discover products or services.
  • 44% of respondents said that branded content helps them find out about a product or service.
  • 41% of respondents said that a brand’s content helps them research a product or service.

To reach a wider audience with Instagram branded content posts, you can now turn them into ads. Currently, there are two types of Instagram branded content ads: feed ads and stories ads. You must be tagged as a business partner in the post to be able to promote that post as a branded content ad.

Here are a few reasons why you should consider running Instagram branded content ads for your business:

  • Amplify the reach and engagement of branded content. These ads are presented to Instagram users just like any other Instagram ad type, ensuring more eyeballs on the content beyond just the influencer’s following.
  • Provide transparency to Instagram users. Social media users care about ad transparency, and Instagram branded content ads make it easy for people to recognize your brand collaborations with influencers. Every branded content ad contains a “Paid Partnership” tag along with the brand name. This builds credibility and brands don’t have to rely on their influencers to use transparent hashtags.

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  • Offer a seamless shopping experience. With shopping tags and branded content ads at your service, audiences can easily purchase your products without leaving the Instagram app.
  • Allow for optimization. You’ll be able to see all of the results and ad metrics for your Instagram branded content ads in Facebook Ads Manager. With meaningful insights for your campaign, you can optimize your ads for better results.

Now that you know about the benefits of Instagram branded content ads, here’s how to set up a campaign.

#1: Approve and Manage Instagram Influencer Partnership Requests

Before you start collaborating with influencers on Instagram branded content, you need to set up branded content approvals.

To do this, tap the three-lines icon at the top right of your Instagram business profile and choose Settings from the pop-up menu.

When your account settings open, tap the Business option and then select Branded Content.

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The next screen will show your branded content approval settings. The option to manually approve tags is selected by default, which makes a lot of sense. If you were to toggle this option off, anyone would be able to tag you as a business partner in branded content.

The Tag Requests section is where you view and approve requests from influencers to tag your brand as a business partner. When you approve a request, that influencer shows up in the Approved Business Partners section.

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How Instagram Influencers Tag Your Brand and Make Their Content Eligible for Ads

Your influencer partner must be a registered creator on Instagram and must have access to branded content tools. Creators must comply with some Instagram policies to become eligible for branded content tools.

When influencers create branded content posts, here’s how they send tag requests to your brand and make their content eligible for ads.

For Instagram Branded Content Posts in the Feed

When creating a feed post, the influencer taps Advanced Settings and then Tag Business Partner. From there, they search for your business partner account and send you a tag request. Once your brand approves the influencer as a business partner, they’ll be able to directly tag your brand in their posts.

Influencers also need to take one additional step to make their organic Instagram posts eligible for branded content ads. In the Branded Content section, they must select the Allow Business Partner to Promote option.

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For Instagram Branded Content Posts in Stories

When the influencer creates a branded Instagram story, they tap the link icon at the top of the screen and then select Tag Business Partner.

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From here, the influencer can either send you a tag request or directly tag you as a business partner. Additionally, they’ll see the option to allow your brand to promote the content as an ad.

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Pro Tip: For your Instagram branded content to be successful, you need to clearly communicate with your influencer partner. Discuss your plan and objectives with them so there’s no confusion about what you want to achieve with your partnership.

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#2: Choose an Instagram Branded Content Post to Promote

After your influencer partner has successfully shared a post organically, tagged you as a business partner, and allowed you to promote it, you can create a branded content ad on Instagram.

Note: Influencers can publish branded content ads in Ads Manager without posting the content organically first. However, your brand can only promote branded content that was first posted organically from the influencer’s account.

Choose the organic branded content post you want to promote carefully. This is a vital step. You should be familiar with the type of content the influencer posts on their account and the type of response they get from such posts. Depending on your ad objective or goal such as increased app installs or sales, determine which influencer post is best suited to achieve that goal.

To view insights for organic branded content you’ve been tagged in, you can look in your Facebook Page Insights or Facebook Brands Collabs Manager.

Set Up Brand Collabs Manager

Brand Collabs Manager is a dedicated tool provided by Facebook that takes content partnerships between brands and influencers on both Facebook and Instagram to the next level.

As a brand, Brand Collabs Manager will help you find Instagram influencers who have similar audiences to yours and show insights for organic Instagram branded content posts.

To sign up for Brand Collabs Manager, go to https://www.facebook.com/collabsmanager/signup/brand. Select the Facebook page that’s connected to your Instagram account, type in your email address, and accept the Terms of Service. Click Submit when you’re done.

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Once you’ve been approved, you’ll see the Brand Collabs Manager dashboard.

On the Insights tab, you’ll be able to see the reach and engagement data for any organic branded content posts from influencers you’ve partnered with.

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View Instagram Branded Content Insights in Facebook Page Insights

You can also view data for organic branded content posts in your Facebook Page Insights. To access this data, click the Insights tab on your page and select Branded Content in the left navigation.

Click the Posts tab to see reach and engagement for your branded content feed posts. On the Stories tab, you’ll find reach and engagement for branded content Stories posts.

#3: Create an Instagram Branded Content Ad to Promote Your Influencer’s Post

Before setting up your Instagram branded content campaign, define the campaign goal you want to achieve. Then based on this goal, determine the metrics involved in achieving it. For example, if your goal is to increase app installations, the number of clicks on your application download button matter more than the reach of the post. You’ll then be able to calculate campaign performance more effectively.

Once you’ve decided what you want to achieve and what content to promote, go to Facebook Ads Manager, create a new ad campaign, and select your campaign objective. You can choose App Installs, Brand Awareness, Reach, Traffic, Video Views, Conversions, and Page Post Engagement (feed only) as objectives for Instagram branded content ads.

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Next, set up your ad set. Define the audience you want to target and choose your ad placements. Instead of automatic placements, go with Manual Placements and choose only those that apply to Instagram such as Instagram Feed, Explore, or Stories.

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When you reach the ad level, click on Use Existing Post. Then under Creative, click Select Post.

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In the Select Post window, click on the Branded Content tab and select the branded content post you want to promote as an ad. When you’re done, click Continue.

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You can now see a final preview of your ad. If everything looks okay, click Confirm to finish the ad creation. The ad will then be reviewed and approved or disapproved for publishing. You’ll be notified in both cases.

Note: Your influencer partner won’t be able to make any changes to their post while you’re promoting it as an ad. They also won’t be able to see the ad performance, just the metrics of their organic post.

#4: Remove Your Tag From an Instagram Branded Content Post

As a brand, you may want to be removed or untagged from an Instagram branded content post at some point. You can remove the tag from either Facebook or Instagram.

From Facebook

To remove your tag via Facebook, go to your Facebook Page Insights and click on the Branded Content tab. Then find the branded content post and click on it, or click on Review Post.

Select Remove Tag and then click Confirm on the Remove Tag confirmation screen.

From Instagram

For an Instagram feed post, tap on the three dots at the top-right corner of the tagged post and select Remove Me From Post.

For an Instagram story post, tap on the three dots in the bottom-right corner of the tagged story post and select Remove Me From Post.

Conclusion

One effective way for brands to boost their social media engagement is with influencer marketing. Brands partner with Instagram influencers to boost the credibility of their content by association and reach the influencer’s audience on the platform. With Instagram branded content ads, you can expand the reach of the content beyond the influencer’s following and improve the chances of reaching your target audience.

What do you think? What features of Instagram branded content ads do you find the most advantageous? Have you run an Instagram branded content ad campaign yet? Do you plan to use these ads in the near future? Share your thoughts in the comments below.

More articles on influencer marketing:

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How To Find And Engage Influencers To Multiply Your Brand Reach

When looking for potential ways to expand exposure and reach this year, many turn to influencer marketing. Here are a few noteworthy ways to find credible influencers that are aligned with your brand and craft conversion-worthy posts with them, so that you can take full advantage of influencer marketing this year. 

When looking for potential ways to expand exposure and reach this year, many turn to influencer marketing. Defined by investing in influencers with large social media followings rather than in targeted advertisements, many find that the results are stronger with influencers simply because of the trust they’ve established with their audience.

In fact, nearly 90% of marketers report that influencer marketing has a higher ROI than other marketing avenues. Where can these marketers get stuck? Finding the right influencers for their product and helping them craft the ideal advertisement. Some influencers aren’t open to advertising on their accounts, some appear to be influencers due to vanity metrics but don’t have the engagement to boot, and some have ambiguous audiences.

Here are a few noteworthy ways to find credible influencers that are aligned with your brand and craft conversion-worthy posts with them, so that you can take full advantage of influencer marketing this year.

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How To Find And Engage Influencers To Multiply Your Brand Reach | Stephanie Burns

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1. Work With An Agency

If you don’t have a ton of extra time to search for influencers, consider finding an influencer marketing agency or talent agency. These agencies represent people with large followings, whether they built them themselves or appeared on reality shows. There’s a benefit to going this route even if you did have the time to research on your own: you have a higher chance if getting a response.

Since these agencies already have relationship capital with their talent, going through them nearly guarantees a response. It’s harder to reach major influencers on your own when they get so many cold emails and direct messages on a daily basis. Some are full service, too – according to Influencer Marketing Hub, “many influencer marketing agencies…help brands through every stage of the influencer marketing process, from influencer discovery, through influencer management, assisting with content creation, to analyzing and reporting on a campaign’s success.”

2. Encourage Creativity In The Influencer’s Approach To The Advertisement

Janelle Kao (Freya Fox) influencer marketer and esports consultant, shared with me that influencers are going to be, and should be, as creative as they can in approaching how they advertise your product. “Remember that this is not traditional advertising,” she advised. “So, giving the influencers free rein to put their own twist on how to advertise is essential, while also maintaining open communication about the main points you need emphasized.”

The more creative the influencer is, the more it will resonate with their audience because the audience is likely to recognize the influencer’s flair. “It will feel less like an advertisement, and more like a natural puzzle piece of what the influencer is already doing,” Kao said. For this reason, it’s important that your team likes and feels a resonance with the current creative direction of the influencer’s accounts.

3. Add In Incentives On Top Of The Marketing Fee

In addition to offering the standard fee for a sponsored post, it may be a good idea to add in an incentive, especially if you’re working with several influencers. Allee Williams, founder of Leia Rising and social media strategist, noted that a company she once worked with did just that. “They emailed all their influencer partners on Black Friday and told us that whoever had the most conversions from their unique link would be flown out to headquarters for a tour, spa day, and three night stay in Southern California,” she shared. “They blew up on social media that day because we all wanted to win that trip!” she laughed.

If a trip isn’t a good fit for your company, add a financial incentive, such as – “If you sell X amount of products in the first week, we’ll give you an extra $X.” This will motivate the influencer to be more diligent in crafting their post, and to perhaps send it directly to people who would be interested in your product.

Once you get started with influencer marketing, your brand will gain enough exposure and recognizability to start gaining credibility with other influencers. It can take off from there. Expand your brand reach this year by putting these influencer marketing tips to work.

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Venture capitalists ‘like and subscribe’ to influencers

Danielle Bernstein is just 27 years old, but she’s been running her own business for 10 years. First it was street-style photography, then came the launch of her popular fashion blog WeWoreWhat. Next she took to Instagram, a new social media platform that quickly became the most effective tool in a blogger’s toolkit. With new…

Danielle Bernstein is just 27 years old, but she’s been running her own business for 10 years. First it was street-style photography, then came the launch of her popular fashion blog WeWoreWhat. Next she took to Instagram, a new social media platform that quickly became the most effective tool in a blogger’s toolkit. With new followers — today her account, @weworewhat, has 2.2 million — came opportunities to monetize her influence. She created and launched an overall brand and a swim collection, then came the book deal (“This is Not a Fashion Story: Taking Chances, Breaking Rules, and Being a Boss in the Big City” is expected out May 2020). Naturally, the next step in Bernstein’s evolution from blogger to businesswoman was a technology startup.

Her newest venture, Moe Assist, claims to be the first project management and payments tool for influencers. Last month, the product launched with $1.2 million in funding from Rebecca Minkoff and other unnamed investors. Creators and influencers like Bernstein are forging a path from content creator to full-fledged business, with multiple revenue streams via podcasts, licensing deals, branded merchandise and even software products.

“A company like Moe will help legitimize the industry,” Bernstein tells TechCrunch. “I feel this responsibility to my industry to put the best business practices I’ve learned along the way into a platform so I can help other influencers.”

We are in phase three of the influencer economy. Bain Capital Ventures’ Jamison Hill

Tech entrepreneurs, quick to pounce on any emerging economy, have also begun building services for creators and influencers from marketplaces that connect individuals with brands, financial solutions that help capitalize burgeoning influencer-led businesses, tailored monetization platforms and even a “LinkedIn for Influencers” intended to foster connections between influencers and brands.

“We are in phase three of the influencer economy,” Bain Capital Ventures senior principal Jamison Hill, who led the firm’s investment in the influencer shoutout marketplace Cameo, tells TechCrunch. “The first phase was the rise of the media platforms: YouTube, Instagram, etcetera, that allowed creatives to build audiences. The second phase was the emergence of influencer marketing, or connecting those influencers to brands to leverage their audiences … Now that influencer marketing has become an established part of the marketing playbook, we are in phase three: tools to help influencers further monetize their influence, like Cameo, and then manage their lives.”

While some businesses, like Cameo, have successfully raised venture financing, VCs have yet to fully tackle the influencer and creator economy. Founders and investors circling the space suspect a wave of Silicon Valley interest is coming, however, and that it will alter the category entirely.

“2020 will be a watershed year for investment in businesses around the creator economy,” Neil Robertson tells TechCrunch. Robertson is the founder of Influence, a networking tool for influencers that’s expected to announce its Series A financing in the coming weeks. “Influencers and creators are small businesses and if you think about all the things that small businesses need these days to succeed, they will be repurposed for the influencer marketing space.”

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CEO of Patreon Jack Conte attends VidCon 2019 at Anaheim Convention Center on July 12, 2019 in Anaheim, California (Photo by Jerod Harris/Getty Images)

‘People say we’re crazy’

As venture capitalists wake up to the business opportunity, they’re seeding startups that help influencers go from hobbyists to professionals.

We know creators are legit businesses. Karat, a startup building a bank for creators

Karat, a startup expected to enter Y Combinator’s Winter 2020 batch, is building a “bank for creators,” with its debut product focused on lending to individuals through a revenue-share agreement. The company was co-founded by Eric Lei, a former product manager at Instagram who focused on the creator and influencer side of the business.

The startup has already secured a seed investment from Maveron and CRV, TechCrunch has learned, and will receive another $150,000 in exchange for 7% equity upon entering YC next year. The company plans to give creators and influencers more independence from existing platforms by allowing them access to funding from a team well-versed in their unique capital needs.

Banks won’t underwrite an individual based on qualifications like their Instagram following, of course, and given that influencers don’t typically have a consistent income or a W2 statement to showcase their earnings, they may not be able to receive a bank loan to invest in their own brand. Imagine receiving a loan based on the size of your TikTok or YouTube following? Karat and other new startups focused on monetization could accelerate an influencer’s path to entrepreneurship.

“People say we’re crazy, but we know creators are legit businesses,” Karat writes on its website — the company didn’t respond to a request to chat about what they’re working on. “And just like any other business, you need capital to grow faster, services to make you more money, tools to manage it all.”

Karat’s approach to treating individual digital content creators as future “unicorns” is not isolated. Podfund, for example, writes checks sized between $25,000 to $50,000 to emerging podcasters. The company asks for 7% to 15% of revenue for three to five years depending on current traction, revenue and projected growth. Patreon, one of the first businesses to develop a tech solution for artists and creators seeking consistent income, recently announced Super Patron, a $50,000-per-year grant for creators, according to The Verge.

Influence, the “LinkedIn for influencers,” doesn’t directly invest in influencers or creators; rather, gives them a central meeting point to land gigs, learn about production, gain insights into brand deals and communicate with or befriend other influencers. Indeed, 175,000 people are using the platform, 30,000 of which are businesses, which pay between $229 and $600 in annual fees to reach influencers on the platform. Influencers, for their part, pay $48 per year for access to the company’s premium features.

“Think of the old days when a young woman got off the bus at Hollywood & Vine and said ‘where do I go to be a star?,’” Robertson, the chief executive officer of Influence, said. “That’s happening in the influencer marketing space, but there’s no answer to that question. People in the industry need a place to go and figure it out, to talk about it and learn about it.”

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YouTuber Caspar Lee, the co-founder of a startup called Influencer, attends the UK Gala Screening of “Wonder Park” in London, England (Photo by David M. Benett/Dave Benett/WireImage)

Rethinking value

While angel investors like Rebecca Minkoff might be savvy to the business proposition of influencers, many investors have remained skeptical. Influence’s Robertson tells us venture capitalists were initially uncertain of his latest startup despite his track record, which includes the sale of multiple software businesses, including the affiliate marketing company VigLink.

“We had to explain that there was a very different way to create value in the marketing economy,” Robertson said. “We needed VCs to rethink how value could be created in the influencer marketing space.”

Everyone wants to become an influencer. Influencer CEO Ben Jeffries

The first businesses to crop up in the space were traditional two-sided marketplaces: influencers on one side, companies and brands on the other. Naturally, these were also the first business to get funded. Ben Jeffries launched his startup, Influencer, in London in 2014 after his close friend matched with Caspar Lee, a YouTuber with 7.3 million followers, on Tinder. Once Jeffries and Lee were introduced, the pair begin brainstorming what became Influencer, a marketing platform that helps brands and influencers build more meaningful relationships. The business has attracted about $4.5 million in funding to date, including a recent $3.6 million Series A led by Puma Private Equity, a U.K.-focused fund.

“There’s money coming into the industry and with this influx of money is more companies entering the market,” Influencer co-founder and CEO Jeffries tells TechCrunch. “Attached to that, brands are becoming much more savvy in how to run influencer campaigns.”

The company has used its new cash to open an office in New York City and expand its American clientele. Another company, Tribe, has similarly raised VC to grow its American footprint. The Australian startup, which connects brands to “micro-influencers,” or every-day people with more than 3,000 followers on Instagram, Twitter or Facebook, raised a $7.5 million Series A in March. But even these straightforward marketplaces had trouble explaining their market to investors.

“What we used to always say to investors was ‘I guarantee if you ask your kids about influencers, that will spark a conversation and help you understand the industry and how crazy it’s going to become,’ ” Jeffries said. “When I was younger, everyone wanted to become a famous sports star. Now, everyone wants to become an influencer.”

Los Angeles-based funds, in closer proximity to the entertainment industry, have been quicker to invest in the creator economy. In fact, new funds have launched there with expertise in the category. Next 10 Ventures, an LA-based $50 million venture capital fund founded by Benjamin Grubbs, YouTube’s former global director of top creator partnerships and Paul Condolora, the former co-head of the Harry Potter franchise at Warner Bros., invests exclusively in the space. The firm even launched an accelerator for YouTube personalities in late 2018. The program, called The EduCator Incubator, planned to seed 25 to 40 “emerging video creators” with $25,000 to $75,000 in seed funding. Similar to Karat and PodFund, Next 10 signs a revenue-share agreement with participants of the accelerator, with a possibility for an equity investment in the future.

Rx3 Ventures, a new venture fund led by long-time Green Bay Packers quarterback Aaron Rodgers, is helping influencers in sports and entertainment get stakes in the companies for which they are hired to be spokespeople. The SoCal outfit has tapped influencers to become limited partners in their fund, giving them the opportunity to develop equitable relationships with the brands requesting their promotion.

“If I am going to support something, why don’t I take an equity position and benefit from the upside?,” Rx3 Ventures vice president Ryan McGuigan tells TechCrunch. “It’s all about getting a stake in these brands as opposed to signing some sort of endorsement.”

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Lil Miquela, a virtual influencer created by the venture-backed startup Brud, poses for a selfie

When anyone can be an influencer

This year, companies are expected to spend a total of $8 billion on influencer marketing campaigns, a figure that should swell to $15 billion by 2022, per data collected by Mediakix, an influencer marketing agency.

We all have that friend that somehow has 10,000 followers. Rx3 Ventures’ Ryan McGuigan

Factors including the onset of shoppable video and live shopping — a category still in its infancy led by startups like Tiltsta — will give more autonomy to influencers, who have proven an ability to transform browsers to buyers time and time again. CGI influencers like Lil Miquela, a digital avatar with 1.7 million followers created by the venture-backed startup Brud, or the lifelike personalized avatars that Genies, SuperPlastic and Toonstar have cooked up, should drum up more dollars. Plus, efforts to democratize the path to influencer, including courses on how to become an influencer and marketing channels that allow for people with only a few thousand followers to earn money, should expand the market size and fuel growth.

“We all have that friend that somehow has 10,000 followers,” McGuigan of Rx3 Ventures said. “Giving them the tools to monetize that reach is going to be important and also a valuable angle to approach influencer marketing for brands.”

“Now, more and more, we are seeing that anyone can turn into a “micro-influencer,” he adds. “Anyone with a decent following or free time can post about products — why can’t they be an influencer as well?”

With the expected influx of venture cash, entrepreneurship from creators themselves and startups looking to capitalize on the phenomenon, the creator and influencer economy is poised for a boom.