How top DTC and e-commerce brands are responding to the shifting creator economy

May 12, 2022 Mary

Influencer marketing has become an essential strategy for DTC and e-commerce brands operating in the creator economy. But the practice has veered far from the simple, one-way street enjoyed by many early adopters.

Content creators are increasingly claiming control of their destiny regarding brand-influencer relationships. They understand how critical they are to the success of virtually every digital marketing strategy, and it’s now up to brands to make initial contact, pay for content fairly and efficiently and invest in the tools that enable them to do so.

With that understanding come changes to the dynamic between advertisers and the influencers helping to drive successful campaigns.

Creator payment preferences are evolving

There has been a stark change in how brands pay influencers over the last year. As influencer marketing continues to gain momentum as one of the most viable digital marketing strategies, creators are beginning to place a higher value on their content and demand a more comprehensive compensation model.

Traditionally, marketers have chosen one of three compensation models for influencers: Product seeding, flat rate or commission.

Initially, influencer marketing thrived on a product-seeding approach that offered creators free merchandise for social media posts. But gifts alone aren’t enough for many influencers — especially those with more significant followings. At the very least, these creators want compensation structures that involve cash payments and product seeding.

“Times are changing,” said Marisa Pardo, vice president of brand partnerships and engagement at ABLE. “The influencer’s job is legitimizing, and [they] are starting to recognize, ‘OK, this is my job. You need to pay me for my time.’”

But for many brands, a paid approach isn’t realistic from the jump. Tubby Todd founder, Andrea Faulker Williams, said her brand always starts its influencers on a product gifting payment scale. Once the influencer can prove their ROI potential, they move to a paid structure.

“We always start everyone there just to make sure they’re a good fit with the brand,” Williams said. “I would never feel comfortable paying anyone that didn’t sincerely love the brand. And I never want to pay someone who hasn’t used the product.”

But in any pricing negotiation, transparency is the best policy.

“Just be honest,” Pardo at ABLE said. “Tell them, ‘We’re a small brand. We have a small budget. We have to test before we can pay you that amount.’”

Brands are partnering more with nano- and micro-influencers

Nano and micro-influencer partnerships are rising as more macro and celebrity influencers price out smaller brands. For the most part, these niche creators — who generally have between 1,000 and 100,000 followers — still listen to pitches involving products in exchange for posts.

“I’m seeing a lot of nano-influencers create quality content with a small flat rate,” one GRIN customer said during an anonymous brand survey. “They are also more responsive and easier to work with.”

Nano- and micro-influencers tend to engage far more meaningfully with their audiences than their macro and celebrity counterparts. A high engagement rate indicates to brands that their products and services will appear in front of a captivated audience that trusts the influencer when it comes to product recommendations.

“Engagement rate is the number one piece,” said Bonnie Taylor, Talent Resources’s strategy and communications vice president. “I want the hyperlocal micro-influencer who might only have 50,000 followers. But guess what? They’re going into the exact store you need. They are going to give you the traffic, the numbers, the conversions that are going to prove you should expand your reach.”

Nano- and micro-influencers have a knack for nurturing a community of people who share the same core values. These communities add an element of exclusivity. And when influencers promote products to their community, members view it more as a recommendation from a friend rather than a billboard.

“Too many brands are going after macro-influencers when they should be going after nano-influencers,” said Movetic CEO Josh Roush. “Brands need to find authentic influencers that align with their lifestyle and values.”

Roughly 72% of all digital marketers plan to use influencer marketing in 2022. As the strategy continues to gain popularity, the more advanced players in the space have already graduated from spreadsheets to a platform that allows them to automate their programs and operate at scale.

“I’m probably one of the most organized people on the planet, but that spreadsheet gave me anxiety,” said Victoria Shanley, director of operations and marketing at Frenchie Bulldog. “I knew there were better ways for me to spend my time other than going back to the sheet constantly.”

Along with influencer marketing managers at leading DTC and e-commerce brands such as Allbirds, MVMT Watches and Cuts Clothing, Shanley found their solution with a top-rated creator management platform.

Creator management platforms can enable brands to easily discover and recruit brand-aligned influencers and send products and payments to each with a single click. Top-rated platforms also allow brands to manage content and analyze campaign success while automating busywork at every possible step.

“Experiencing GRIN has been life-changing,” said Lily Yang, influencer marketing coordinator at City Beauty. “Being able to have GRIN as our influencer marketing platform just makes everything so much easier.”

With marketers shifting creator payment processes to more fairly compensate influencers for their efforts, there’s also been a change in the types of influencers with which many brands partner. Nano- and micro-influencers are now getting more spotlight as marketers realize their unique benefits over macro and celebrity influencers. As influencer marketing continues to ramp up, brands are leveraging creator management platforms to gain more time to focus on what’s truly important: Scaling their influencer programs and building genuine, collaborative relationships with authentic creators and their audiences.