By Mia Dand
In the constantly changing world of digital and social media, Influencer Marketing is the new black. However, due to the nascency of this space, it’s plagued with hype and chaos. In our latest report, we reviewed the current state of influencer technology in 2017 and highlighted critical considerations for CMOs as they adopt these new technologies.
Let’s start with a quick overview of what’s fueling the growth in influencer marketing.
According to Nielsen, more than 83 percent of global respondents say they trust recommendations from people they know over online banner ads (42 percent). This has led to greater reliance on social influencers who have credibility with a huge audience.
This growing popularity of influencer marketing is driving more demand for efficient scaling through automation technology.
Gartner says 33 percent of marketing budgets go to technology and CMOs will drive overall marketing technology spending to $32.4 billion by 2018. Influencer technology is benefiting from this positive increase in marketing spend.
Through our comprehensive research, we determined that influencer technology platforms have five core capabilities and vendors provide varying levels of features within these key categories.
We categorized 50 technology vendors in this growing market into three key categories:
- Influencer Discovery Nineteen platforms with varying capabilities to search, sort and rank influencers.
- Influencer Outreach Six platforms designed for outreach to media/journalists.
- Influencer Marketing Twenty-five technology vendors that offer self-service and/or marketplace platforms for engaging paid influencers.
We found that over 60 percent of influencer technology vendors were launched within the last five years. This is a key point that CMOs need to keep in mind as they evaluate vendors as many of these newer vendors may lack experience in working with large enterprises.
Number of vendor start-ups by year
Many of these companies are small, with less than 50 employees, which isn’t surprising given their recent launch and private funding. This finding leads us to another key consideration: staffing. Vendors’ staff size and expertise is critical for larger enterprise companies for two reasons:
1. Account management Smaller vendors may not have an adequate team to support multiple business units for large enterprise brands. Some vendors have overcome this limitation by partnering with third-party agencies.
2. Engineering A lack of engineering resources will impact the timeline for product enhancements and limit ongoing support for the technology platform.
Number of employees
Since many of these technology vendors are private or venture funded, their ability to grow or even stay in business is severely impacted by lack of funding. Based on the most recent funding data, here are the top ten largest influencer marketing platforms. Despite all the hype, 2016 was not a great year for getting new investment and only two vendors publicly disclosed receiving new funding: TapInfluence and Influential.
Top ten largest influencer marketing platforms by funding
Despite lack-luster funding activity, there were many more acquisitions compared to previous years across all three influencer technology categories, with the most recent acquisition being Little Bird by Sprinklr in November 2016.
What’s next for influencer technology?
- We anticipate continued churn as the influencer technology market matures and many platforms evolve, get acquired or exit. This will reduce “tools sprawl” fatigue mentioned as a key issue by many brands.
- This year will be the beginning of “Influencer 2.0,” which will bring standardization of core capabilities and the introduction of more robust workflow features.
- We will also see platforms becoming more sophisticated and focusing on deeper analytics that deliver performance and ROI metrics, instead of superficial vanity metrics.
For more insights on Influencer Technology in 2017, you can download our latest report at https://lighthouse3.com/influencertech2017