Influencer Marketing: Ethics, Actions and the Future

November 1, 2016 James Rubec


How Mode Media’s Collapse Affected the Influencer Marketing Industry:
Insights from Three Influencer Marketing Leaders

Whether you are an active user of Snapchat or Instagram, or just a casual reader of blogs and YouTube there are influencers who you’ve watched or followed that are paid to discuss brands. For retail brands, this is an increasingly valuable channel for advertising and for professional communicators, a must-have tactic.

Earlier this year Mode Media, an influencer marketing and content promotion company that Business Insider called a “Billion Dollar Juggernaut” went bust. It didn’t just quietly shut down, slowly finalizing its contracts and laying off staff; the brand shut its doors and stiffed its contractors. The contractors in this case are some of the world’s most effective and valuable content creators and influencers.

We spoke with leaders from three influencer marketing companies, #Paid, Rizer Social and IZEA to learn what they do to engage influencers and ensure they are remunerated by brands.

Relationships are key

influencer-camera-setup-dx3-digest“It’s really sad at the core of it, it was the seventh largest content network worldwide and supported a lot of great influencers and people,” said Richard Wong, VP Marketing at #Paid. “This has been devastating for the company’s employees and the industry itself.”

What makes it sad is that these independent content creators were out somewhere between $500,000 and $1 Million in unpaid contracts. If you know a blogger who produces paid content, they are more likely than not out a few hundred dollars or more.

All three companies we spoke to have similar formats to ensure content creators are paid for their work. For #Paid content creators are paid three times during a campaign; once when they accept a request for content, the second payment when content is submitted and finalized and the third when it is actually posted.

“Influencers deserve to be paid,” said Wong. “We reached out to those affected by Mode and told them how we could help support their lifestyle and work with great brands.

Brand and influencers audiences must align

For Rizer Social payment comes in two instalments. Once a request for content is signed and again when it is completed, half-first, half upon completion.

For Tristan Rahman, Co-Founder of Rizer Social, he aims to give brands the ability to monitor, analyze and coordinate influencer marketing through an end-to-end technical solution. All of the technical wizardry aside, it does’t negate the importance of aligning the rights influencers with particular brands.

“We want to work with influencers who are cooperative,” said Rahman, explaining that not every content creator is a safe bet for brands to place their paid marketing budget behind. “We don’t want to compromise an influencer’s genuine personality, but we also want to be very careful about the openness of their opinions, it all comes down to our recommendation.”

Rizer has to navigate authenticity with risk of negative brand exposure.

“We want to remove all of the grey areas and we can show the narrative from start to finish,” said Rahman.

All three brands we spoke to, Rizer, #Paid and IZEA provide a metrics-based solution which enables brands to track and evaluate the performance of a specific campaign.

Set content creators free

cu5ejepwyaa1aw2One of the things that scare brands away from influencer marketing is that you don’t have complete control over what the influencer does, says and produces. According to Tiffany Heimpel, Managing Director of IZEA Inc. in Canada, that unpredictability isn’t a defect but rather a feature.

“When you work with influencers you can’t control what they say and that’s exactly when it works best,” says Heimpel. “It works when it is in their voice, their tone and they are communicating with their niche.”

When Mode Media fell, IZEA spoke with its brand and agency partners, letting them know it was available to help and see if the brands needed to reallocate resources. Mode Media lacked the ability to coordinate with influencers through the wide array of social channels and for IZEA this presented an opportunity.

Brands will often work with a roster of 20 to 30 influencers, finding those that fit best for certain programs and rolling new influencers in where their niches allow. IZEA gives brands that opportunity to approve, evaluate and coordinate with wide groups of influencers at once.

Future of influencer marketing

Advertising is a $520 Billion USD industry globally, and without hard numbers of segmentation between influencer marketing and traditional advertising, it is difficult to discuss the scope. Print readership is down, Canadians are cutting their cable subscriptions at 2-3% a year, soon enough influencers could be the gateway to the largest audiences of any channel out there.

The question is, are you ready to jump in, or are your competitors?

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