Two news items jumped out at me this month. I scour the headlines of several hundred blogs and websites looking for the latest and greatest ideas and tools, just to make sure I know what’s happening out there. Two stories cracked open something I’d been thinking about in a very vague way. Suddenly, it was crystal clear.
The first was “Amazon is testing a TikTok-like feed in its app.” The second was “Walmart may launch platform using social media influencers.”
At first glance, one might think these are logical evolutionary steps in retail giant innovation around consumer behavior to ensure they’re getting their piece of the pie. And they are. But if you look a little deeper, these two innovations may just change the influencer marketing landscape forever.
There are a handful of reasons why:
- Brands covet conversions/sales over any other success metric
- Consumers know retail channels are all about conversions/sales
- Creators will have to change to survive
- Retailers want to control everything, which is bad news for a lot of us
Let’s dive into each one and better understand what this retail push toward self-owned influencer and creator programs may mean for the industry, and your brand or clients.
Brands Covet Conversions & Sales
Every single bit of hesitation from the C-Suite, the sales team, investors and other naysayers would be gone if budgets dedicated to influencer marketing come with a near-guaranteed return rate. If the channel was built around driving sales and the only question was which creators could drive more efficient sales, we wouldn’t have 75 percent of the frustrations the industry begets.
Don’t believe me? Find the brands and decision-makers most happy with influencer marketing. Ask them why. Their answer will inevitably be something like, “We have a predictable and efficient return on investment.” Which means they use influencers as affiliates and/or social commerce beacons and optimize around creators who focus most of their energy on driving sales.
As Amazon and Walmart build creator mechanisms that puts better retail tools in their content-making hands, the segment of creators that brings with them that efficient return on investment will be empowered to be that on Amazon and Walmart. The brands that sell there will not have to do the same kind of influencer discovery we do for most campaigns. In fact, Amazon and Walmart will likely provide those lists to their supplier brands to optimize sales.
Think about it this way: I can spend $100,000 on a big influencer awareness campaign and hope we figure out a way to drive customers to purchase by clicking from a social network to a retail location. I hope for 3-4X return, but have no way of predicting it will work or not. Or, I can (hypothetically) pay $100,000 to Amazon’s Inspire creators and Amazon matches my spend with the top 10, 20, or 50 of its creators who drive ridiculous conversion rates for my category. The Amazon team can likely give me an estimated return on ad spend that is accurate based on previous data. I’ll know going in 3-4X in return is likely.
Who would you spend your money with?
Consumers Know Retail is for Retail
The concept of social commerce has always been silly in my mind. People don’t go to social networks to shop. The whole reason social networks emerged is because consumers wanted to get away from channels that yelled advertisements at them.
When social media creators with audiences emerged, here in swooped the marketers, mucking it all up. Now Instagrammers and TikTokers and Pinteresters (Is that what we call them?) have Buy Now buttons on their posts and Gen-Z consumers are going to these channels to shop as well as be social.
But regardless of the generation, all consumers know if they’re on Amazon, they’re shopping. If they go to Walmart.com or are engaged with Walmart in any way, they know it’s about buying products Walmart sells.
As Amazon, Walmart and perhaps other retailers add influencer and creator feeds, product content, product recommendations and beyond, they’re adding content consumers are predisposed to consider purchasing because they’re on a site to do so. This changes the percent chance that content will lead to a sell. Consumer intent is baked into the event.
The lion’s share of the purchase friction in influencer marketing is all the influencer content happens on sites not intended to be places to shop. These moves flip that and that changes how brands and creators have to approach the process.
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The Creator & Brand Change
Because brands covet conversions and sales over everything else and these new retail networks for creators will make it circumstantially easier for people to purchase products recommended by creators, the influencers themselves will have to become Amazon or Walmart focused. Follow my logic here:
- Brands will see a direct path to conversion for influencers and demand conversions now be prioritized in influencer selection
- Creators who aren’t adept at driving conversions, or whose audiences are not as apt to purchase, will cease to get opportunities
- Those creators will have to change to become more conversion drivers to join those who already are to remain competitive
- Brands will continue to push creators towards performance models (affiliate or commission only) because there will now be an established community of creators who optimize around that model to earn their fee. If a creator says “I don’t work in that model,” the brand can just pass and find someone who does
Certainly, this is most true for direct-to-consumer brands. There will still remain a world for non-e-commerce products, B2B companies and those that serve multiple retail channels where branding and awareness is imperative. But if you think for a minute one of those CMOs is going to see consumer brands paying 10% commissions to influencers rather than $5,000 per post and not pull budget and focus away from creators, you don’t know much about how marketers think.
Retailers Love Control
Perhaps the most frightening thing about Amazon and Walmart developing creator programs and platforms is that it might spell doom for the influencer marketing services industry. To date, brands and agencies have relied upon influencer marketing software companies, managed services, and influencer marketing consultants to find, engage and manage creators. The APIs of the social networks make all that discovery and filtering feasible.
But if you put those networks of creators into a retailer’s ecosystem, along with all the data that comes with them, and the Amazons and Walmarts now have data they can leverage to sell more stuff. And since the difference between them winning and losing is who sells more stuff, why on earth would they share that data?
What that means is for the Taggers and Izeas and Mavrcks of the world, there won’t likely be an API for Amazon Inspire. Or for Walmart’s creator community. The only way you’ll be able to rank and prioritize successful and efficient creators there will be to spend your influencer dollars with that retailer.
Now think about the first of our points. Brands covet sales more than anything else. So, if I can get the top creators who drive sales on the big retail channels from the retailers, and I can’t predict how the creators on social networks will perform for me, why would I care who is most influential on TikTok? Or Instagram?
This shift in the influencer space, if it includes the retailers prioritizing their wholesalers with the creator programs and products, could mean influencer marketing software dies. It could mean the discovery piece of what agencies and consultants often charge handsome fees for disappears.
And that is frightening.
And now, for a world from reality
Part of my job, as I see it, is to watch for these potential doomsday scenarios. When market conditions change, the industry talking heads try to determine what it might mean. Typically, we’re making shit up and nothing comes close to the nightmares of which we speak.
We talk about the 800-pound gorilla in the room a lot. But there are millions of other gorillas out there, too. While they are both giants, Amazon and Walmart aren’t the only retail channels for brands to leverage.
And not every brand is retail sales first. Many consumer product goods companies leave the conversion marketing up to the retailers and focus on top- and mid-funnel activities like awareness and education. Both of those executions are perhaps most perfectly delivered by creators on social networks.
So, influencer marketing software and agencies aren’t going to die. But when the retailers lead the way, the market does shift. And we need to be aware that it is so we can plan and adjust accordingly.
What Can We Do About it?
As with any major change to consumer behavior or even industry changes beyond our control, we have to simply be aware and react. But there are a few things I see as important steps in ensuring this is less of a seismic shift and more of an adjustment.
First, the influencer marketing software companies need to be lobbying Amazon, Walmart and anyone else who decides to walk down this path to allow access to their creator data. The more retail creator data surfaces in tools like Tagger, IZEA, Traackr, Mavrck, Creator IQ, AspireIQ and beyond, the more brands using those platforms are apt to choose influencers who are effective on retail networks.
Creators need to ensure whatever data about their retail performance they can see is surfaced in their media kits and other items brands and agencies look for when choosing creators.
Agencies and managed services need to find ways to discover effective retail partners, and not count on an help from the retailers. Amazon has no incentive to tell you who its best sellers on Amazon Live or this new Inspire platform are. So you’re going to have to live on Amazon to figure out who is publishing regularly, seeing engagement in their streams and on their content and beyond. It will have to be manual, grunt work before someone makes it easy. Get ready to watch a lot of content.
And the social networks need to find mutually beneficial programs for Amazon and Walmart creators to publish their Buy-Now content on their regular social media without penalties in the algorithms. Maybe that’s a revenue share or commission with Meta, TikTok, Twitter, etc., for each conversion from that network. Maybe it’s an agreement that the retailers will spend a certain amount with the network to ensure their creator content isn’t penalized. But if this partnership doesn’t happen, creators will be incentivized to post less on social networks and more on the retail sites.
What changes can you see coming as the retail giants plant influence stakes in the ground? How can this affect your favorite creators? What about talent managers? SaaS solutions?
And if you’re on the brand or agency side of things, how does this change your thinking for building influencer campaigns? I’d love your thoughts. Email me at jason@jasonfalls.com so we can discuss.
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Photo by Roman Kraft on Unsplash
The original version of this content first appeared on jasonfalls.com.