When recession looms, barter booms.
Nowhere is this truer (in marketing) at the moment than with influencers.
Don’t take Digiday’s word for it. Here’s one from the coalface of influencer marketing, courtesy of Emily Dean. a social media executive at digital marketing agency Wolfenden: “With the ‘cost of operating crisis’ there has undoubtedly been a trend towards more gifting when working with influencers as opposed to the traditional paid approach.”
And here’s another view from Alex Payne, Sky Sports presenter and co-founder of influencer agency The Room: “Brands are being faced with their own ‘cost of operating’ crisis, meaning that they have less cash to spend on things like influencer relationships. This has led to a resurgence of what can be described as a ‘barter economy’ where brands exchange goods or services as opposed to money.”
To be clear, this isn’t one of those rundowns that claims a trend is taking over influencer marketing. If anything, the resurgence of these barter deals is just getting started. And it’s only really impacting some influencers — those who can’t really say no to proposals from cash-strapped marketers even if they wanted to. That’s because they tend to have smaller follower counts, or less leverage, than their larger counterparts.
“The higher up you get in follower count, and more importantly – view count, as an influencer, the more value you have to the brand, and so the more money you can command, along with having more leverage in negotiations, said Christian Di Bratto, a marketing consultant and talent agent who works with influencers. “The product exchange type of deal works for smaller sized influencers, and obviously on the brand side with marketers who would much rather just send out product rather than product plus money.”
That’s not to say this trend is bad for smaller influencers. Or at least, it shouldn’t be if these deals are brokered the right way i.e not just treated as a cost cutting exercise but as a way to build a more long-term partnership. So far this seems to be true if the six ad execs Digiday has interviewed are to be believed. That said, a resurgence of gifting is undoubtedly awkward given influencers are being asked to work and not get paid in cash. Remember, marketers are leaning further into the trend to spend less, not more, money. Even so, they need to make sure they’re making these relationships worth the hassle for influencers — for the sake of their businesses if nothing else.
That’s clearly what was going through the minds of the marketers behind Selena Gomez’s HBO show “Selena + Chef”. Influencers were sent a luxurious-looking trunk filled with cooking products from trendy home retailer CB2 alongside a cooking pan from kitchenware designer Our Place and beauty products from Gomez’s Rare Beauty company. Oh and there was also a tonne of custom swag from the HBO show.
“The reason this is important is because mailers like this cost a lot to produce and ship — your investment into what the mailer is and what is in it is critically important, as if it’s not interesting, Influencers will not post,” said Crystal Duncan, svp and head of partnership marketing at Tinuiti.
Marketers can ill-afford to assume they’re getting a post just because they’ve sent something to an influencer. So as much as these product mailers are being concocted to help marketers save cash, they’re not necessarily cheap. Even in times where budgets are getting slimmed down, this tactic isn’t necessarily a silver bullet. But it can help elevate a campaign’s effectiveness by virtue of recommendation.
“We recently worked with influencers for a client on both a gifted and paid basis, and over the same time period, the influencer with gifted products generated eight times as many sales as the paid influencer,” said Wolfenden’s Dean.
As ever, authenticity is king when it comes to this sort of marketing. The influencers who are going to survive and thrive in the current climate are those that have a social cause or genuine passion at the heart of their voice and the content they create, rather than just posting things that they’ve been paid to advertise. It shouldn’t be this way. Not when they’re having to work for something other than cash. But until advertisers loosen purse strings, succeeding with these barter deals could be key to influencers getting to a point where they’re so big that they’re no longer considered.
“Not only are influencers providing access to an audience via recommendation, but they’re also providing a unique lens for any brand’s messaging, they’re acting as outsourced creative directors and providing expertise — this absolutely should be remunerated,” said Sarah Penny, content and research director at Influencer Intelligence. “Brands may refine their strategy due to budget restraints, but it’s more a case of them becoming extra diligent to secure partnerships with those that are going to deliver. We’re continuing to see brands access a broad range of influencers across our platform.”
None of this is necessarily new. There’s always been two ways to approach influencer marketing – whether it’s through gifted products with no guarantee of a positive reaction (or any reaction for that matter) or through paid collaborations where the brand has more control over the messaging that is sent out to the influencer’s audience. The former, however, is having a moment on the back of the downturn.