influencer-to-consumer brands, shopping, instagram influencerAccording to Business Insider, the influencer marketing industry is projected to be worth up to $15 billion by 2022, representing a five-year compound annual growth rate (CAGR) of 38 percent. Notably, the influencer marketing industry is growing at a faster rate than the direct-to-consumer industry, which Forrester forecasts to grow at a CAGR of 18 percent from 2018 to 2020. 

As brands continue to find new ways to harness the full potential of influencer marketing, influencers, too, are pursuing new ways to diversify their offerings. As a result of their rich knowledge and subject-matter expertise, influencers are finding new ways to monetize their influence, helping to contribute to the overall growth in the influencer economy. 

In addition to earning revenue from partnerships, influencers also collect money from fans through donations, paid subscriptions and Kickstarters. Some influencers also offer services that complement their social media expertise. While photo and video presets are a popular offering, the services that influencers offer have expanded far beyond a package of Instagram filters, like VSCO. These services include, ebooks, online coaching, podcasts, hosting retreats, merchandise, running influencer marketing agencies and running influencer communities. 

In this blog post, we look at one of the newest ways influencers are monetizing their influence: Influencer-to-Consumer (ITC) Brands. 

Collaborations, Partnerships, Collections and Influencer-to-Consumer Brands – What’s the Difference?

A collaboration is a one-off campaign with brands where the influencer is responsible for creating content usually in the form of photos or videos. For influencers, the benefits are that they require a low commitment/risk, however the downside is the minimal creative authority and control influencers have over their content. 

Compared to a collaboration, a partnership is a longer-term relationship between an influencer and a brand in which the influencer contributes more than content alone over a period of time. For influencers, partnerships are usually more lucrative than collaborations and creative input is more valued.

A collection is an exclusive, limited-time product or offering between an influencer and a brand in which the influencer acts as a creative or design lead on a collection available exclusively through a brand or retail partner. For influencers, the benefits are greater access to distribution, resources, capital and experience. 

An influencer-to-consumer (ITC) brand refers to the process of selling products and services directly between influencers and consumers. A retail partner can help expand influencers’ distribution, but this is secondary to influencers’ own direct-to-consumer channels. 

4 Insights Learned from Analyzing 55 ITC Brands

As part of our Influencer-to-Consumer Brands Index Report, we analyzed the top 25 influencer-to-consumer brands with the highest equity as measured against six essential attributes: Revenue; Website Traffic; Company Size; Share of Voice; Brand Engagement; and Brand Following. Below you’ll find the key insights we discovered from analyzing all 25 brands. 

1. Influencers Have More Engaged Communities Than Their ITC Brands Do On Instagram 

When comparing influencers’ followings to their respective ITC brands’ followings on Instagram, influencers have 4.4x larger audiences than their brands, and generate 2.2x more engagements per post, supporting the notion that 68 percent of people go to Instagram to interact with creators.

ITC Brands follower count

ITC brands follower countAs a result of this heightened engagement with influencer-owned accounts (vs. brand-owned), influencers often use their personal accounts to gather consumer insights and feedback around new product launches. 

2. YouTube Influencers Generate More Website Traffic to Their ITC Brand Websites Than Instagram Influencers Do

Influencers whose primary platform is YouTube generate 2.6x more website traffic to their brand.com per month than influencers whose primary platform is Instagram.

ITC brands website trafficThis also supports the hypothesis that video is a more effective way of selling and communicating multiple selling points, when compared to static images that can usually only highlight a single attribute.

3. Mega-Influencers Generate More Traffic to Their ITC Brand websites Than Macro-Influencers Do

Mega-influencers generate 2.23x more website traffic to their ITC brands per month than macro-influencers, which could be a direct result of the difference in obstacles that mega- and macro-influencers face when launching their own brands (i.e., time, resources, money).

ITC brands website trafficHowever, when comparing influencers and their brands’ followings to their ITC brands website traffic, there is no correlation (i.e., having a higher following on a personal or brand account does not correlate to more website traffic), which makes sense, given that there is typically no correlation between social engagement and business outcomes.

4. The Majority of Influencers With ITC Brands Created Capsule Collections Before Launching Their Own Brands

60 percent of influencers worked with an established brand or retailer to create a capsule collection before launching their own brands. Inevitably, this experience gives these influencers an advantage over influencers who are “self-starters,” as they are able to rely on resources and learnings from those partnerships.

Influencers who are categorized as “self-starters” have to launch their ITC brands independently, raising personal funds, building capital, obtaining resources, and fostering their own learnings instead of leaning on a larger brand with more experience.

 

Supporting Influencers in ITC Ventures Remains Brands’ Top Opportunity

As the number of popular influencers who are building multi-million – and even billion-dollar – businesses of their own, brands have new ways to partner with influencers. 

Where brands can offer benefits to influencers is in their access to resources, business knowledge/acumen, and most of all, experience. For the majority of influencers launching their own brands, this is the first time they’ve ventured into the space. Whereas influencers already have the engaged audience and often times have already developed an overarching marketing strategy, brands can offer unique support because they’ve already done a lot of the things that influencers will have to do in order to successfully run businesses.

Brands have the opportunity to host internal workshops, incubators, AMAs, and more to help steer influencers in the right direction. 

 

What’s Next for the ITC Industry? Growth 

The influencer marketing industry continues to grow as more influencers begin to enter the space and move up the ranks from micros to macros, making the space increasingly competitive for influencers. As marketers continue to prioritize micro-influencers over macro-influencers, there is growing pressure for macro-influencers to differentiate themselves and monetize beyond their influence and reach by leveraging their experience.

Simultaneously, is an increasing number of influencers across the funnel fed up with the control Big Social has over their ability to monetize. From unexplained algorithm changes that throttle influencers’ content to a lack of transparency around what can be monetized, influencers are looking to reclaim their economic power, largely stemming from the desire to self-monetize.

As brands continue to unlock the full potential of influencers and as more influencers move into the space, it’s likely we will begin to see more influencers enter the ITC brands spectrum – progressing from collaborations, to partnerships, to collections to, ultimately, launching their own ITC brands. 

 

For more insight into the top 25 influencer-to-consumer brands, check our our Influencer-to-Consumer Brands Index report.