Advertisers are Shifting Performance Ad Dollars Toward Creators
A surge of recent investments and deals is reshaping the influencer marketing industry, with performance advertising firms leading the way. Despite ongoing uncertainty surrounding TikTok, these developments signal a growing confidence in influencer marketing, projected to see $9.3 billion in U.S. advertiser spending this year.
Key Deals and Investments in Influencer Marketing
- ShopMy recently raised $77.5 million in a Series B funding round.
- Later acquired influencer marketing firm Mavely for $250 million.
- Agentio, a marketplace for YouTubers to sell ads, raised $12 million in Series A funding.
- Influur secured $10 million in Series A funding, and Levanta raised $20 million in November.
The Shift Toward Performance Marketing
According to Chris Erwin, founder of RockWater, influencer marketing is now increasingly seen as a performance-driven ad channel, not just a tool for brand awareness. Technology advancements have allowed influencers’ social posts to be linked directly to sales data, improving the ability of advertisers to target and measure campaigns.
Influencer Marketing Firms Reap the Benefits
The current influx of capital is mainly benefiting established influencer marketing firms looking to scale, rather than early-stage startups. With a stronger M&A market, investors are focusing on later-stage companies with more assured returns. Companies like ShopMy are excelling at closing the conversion loop, using affiliate models to drive results.
Mergers and Acquisitions Shaping the Space
Later’s CEO, Scott Sutton, highlighted two types of M&A deals emerging in the space: those aimed at growth and those helping companies pivot or scale. An example of the latter is the closure of Ghost Agency, a firm that helped brands sell products on TikTok Shop.
Big Players Cashing In on New Investment
The new wave of investment in influencer marketing is helping established firms scale, rather than focusing on early-stage companies. As investment strategies evolve, there’s growing interest in building specialized services off social platforms, with companies creating true economies around influencers.
The Rise of Performance-Centric Influencer Marketing
The current trend in influencer marketing is shifting away from content that builds brand awareness and toward measurable outcomes. Brands are increasingly seeking to achieve tangible results, with an emphasis on sales and campaign performance. Later’s acquisition of Mavely, with its technology that tracks sales, highlights this move into the technology space.
The Challenge of Building Performance-Centric Software
Developing software tailored to meet performance advertisers’ expectations is a costly and labor-intensive process. As a result, Later opted to acquire a software company instead of building one from the ground up, allowing for a faster transition into the performance-driven space.
Companies Seek to Build Their Own Creator Technology
While some firms, like Later, are acquiring technology to enhance their influencer marketing services, others like Dash Social prefer to build their own creator platforms. Dash Social recently invested heavily in developing a purpose-built creator platform integrated with its existing tools and relationships with advertisers.
