November 6, 2018: Influencers are the new VCs, Snapchat’s PR firm sues influencer for failing to deliver, Facebook releases Q3 earnings report and adds ability to share IGTV in Stories, and Pinterest launches carousel ad format.
Here’s what is worth knowing this week:
Venture Capital Is The New Social Capital
Influencers are more than their Insta handle. In addition to launching their own brands, they’re consultants, advisors, and investors in an increasing number of fashion, beauty and lifestyle brands.
Influencers are investors?
Yes, you read that correctly. Influencers are investing in companies that are seeking a new kind of “social capital,” beyond that of Silicon Valley. These brands are offering equity to influencers in exchange for small cash investments – typically ranging from $10k to $50k – or, sometimes, no upfront payment at all.
Influencers are expert brand builders. It’s a win-win for both sides. Influencers get some level of ownership within an organization and brands get access to influencers’ intellectual capital in return, such as trend expertise, industry connections, strategic audience insights, and more.
Which brands are doing this?
Warby Parker, Spotify, Drunk Elephant, Outdoor Voices, and Casper, among others.
How about the influencers?
Arielle Charnas, Danielle Bernstein, Abie Cohen, and Ashton Kutcher, to name a few.
What’s the influencer POV on this?
Take it from Danielle Bernstein, creator of WeWoreWhat, that this is the next big thing in the influencer space. Expanding on the BoF article, Bernstein posted to her IG Story and said: “I’ve personally invested in multiple start-ups and brands over the past few years that range from fashion to lifestyle to fitness, and tech space[s]…When I believe in a new company or brand and choose to invest, I also like having ‘skin’ in the game, too. As an investor, I do a few things but not limited to: play the role of strategic partner; help advise on digital strategy; and use my following and connections to help with growth. I will continue on this path and am constantly keeping an eye out for new opportunities. I have always considered myself a serial entrepreneur more than [the] creative person you guys see on social.”
We’ve said it before, and we’ll say it again: influencers’ value to marketers and brands expands beyond content creation alone. Marketers can leverage influencers’ unique knowledge about the business, industry, trends, consumers, creativity, and content to discover opportunities to gain a competitive advantage or increase market share. After making millions from brand partnerships, it makes sense that influencers are now becoming investors in the brands they love as well.
Snapchat’s PR Firm Sues Influencer for Failure to Comply with Contract
Snapchat’s PR firm has sued “Grown-ish” actor Luka Sabbat for failing to complete his side of a branded partnership. Specifically, Sabbat agreed to promote Snapchat’s Spectacles on Instagram, and in-person during Paris and Milan Fashion Weeks, but failed to publish all contracted posts.
What does the case say?
According to the case, filed on October 30th, 2018, PR Consulting (yes, that’s the name of Snap’s PR agency) claims to have signed an agreement with Sabbat to share three Instagram stories and one post featuring him wearing Snap Spectacles on his account in exchange for $60k ($45k of which he was paid upfront). According to PR Consulting, Sabbat posted only one story and one post. PR Consulting is seeking to recoup the $45k it already paid, as well as another $45k in damages.
While this potentially sets a precedent on influencers’ legal obligations in brand partnerships – whether Sabbat followed directions or not, the bigger question here is why. For high-stakes partnerships in particular, it’s a huge risk to bring in an influencer only at the point of campaign execution.
If an influencer “didn’t follow directions,” chances are there’s a bigger reason (i.e., bad lighting at an event where they were required to post, Spectacles looked unflattering) that could have been prevented by aligning with the influencer sooner in the planning process. Whatever the reason may be, influencers understand their audiences best and they know what content resonates. To maximize opportunities for success, marketers need to collaborate with influencers earlier: offer a trial or preview; ask how the influencer(s) would position, style, and use the product in his or her day-to-day before the campaign goes to market.
Facebook’s Q3 Earnings Call: Biggest Takeaways
Last Tuesday, Facebook released its Q3 2018 earnings report. While it was slightly more promising than its disastrous Q2 earnings report, a stagnant/declining user base in key revenue-driving markets (i.e., North America and Europe) and missed revenue targets were causes for concern.
During the call, FB confirmed that the number of daily active users in the U.S. and Canada has remained flat at 185 million, while the number of European users has slipped from 279 million to 278 million (GDPR or data scandal? Too close to call). Shockingly, the company’s ad rev is still kickin’. Facebook says it grew ad revenues 33 percent year-over-year, coming in just under Wall Street analysts’ estimates. Profit was $1.76 a share, well over analyst expectations.
Zuckerberg also used Tuesday’s call as an opportunity to draw attention to the changing landscape of social networking. Specifically, he called out the increasing importance of video, as well as the company’s emphasis on empowering creators to build communities around their content (via FB groups and stories). Expect more of FB’s platform features to be introduced to WhatsApp and Messenger as more consumers opt-out of the News Feed. We found it interesting that Zuck inferred that users’ increasing preference for video was to blame for declining social engagement. ?
As users continue to migrate away from the seemingly video-heavy and under-personalized News Feed, the value for brands on FB remains in community building – specifically through creators and private groups. With users continuing to flock to groups to connect with those who have similar interests, brands have the opportunity collaborate with influencers who own those groups or who are active within topical groups to increase relevance, just like Starbucks has done with the Leaf Rakers Society (see, even the PSL needs help).
If It’s Not in Insta Stories, It Doesn’t Exist
In a bid to drive engagement and user adoption, Instagram has added a new option to share IGTV content via Stories.
What’s the deal with IGTV?
Since its launch in June, the overall reception of IGTV has been subpar. Facebook’s inability to attract the necessary volume of creators and publishers to the video platform has begun to prove problematic, as it has begun to struggle with the amount of content required to drive user adoption. Without enough content – or bigger audiences – Facebook will also have trouble successfully monetizing IGTV. Creating new ways to drive engagement on IGTV is one way that the company may be able to speed up the launch of any ad offerings.
To IGTV or to not IGTV? That is the question. Although creators and publishers have been somewhat apprehensive about creating content for the platform, brands still have the opportunity to use it as a test-and-learn opportunity before it becomes pay-to-play. In fact, AB InBev recently announced plans to create an IGTV-exclusive “Brewers On Tap” series, seeking to use the channel to increase brand awareness and market share among younger, “mobile-savvy” craft beer drinkers. For tips on how to get started with IGTV, check out our guide.
Pinterest Rolls Out New Carousel Ads
Pinterest has announced a new ad format, called Promoted Carousel, which allows advertisers to use up to five images within one ad to tell stories on the platform.
Tell me more.
Visually speaking, the ads look just like good ol’ Promoted Pins, except these ads have dots below the images, allowing users to swipe through or tap an image to see the website. Each image can feature a different photo, title, description, and landing page, and can be served in Pinterest’s home feed, Related Pins, or search fields. So far, Covergirl, DSW, REI, Toyota, and Cheerios have used the ads to drive product awareness and engagement.
Just in time for that big Black Friday and Cyber Monday holiday push, amiright? Expanded capabilities for sponsored storytelling on Pinterest increases marketers’ needs for proven, Pinterest-first content – an a ideal use case to test and repurpose high-performing Pinterest creator content. Not sure where to start? Check out our webinar on how to optimize influencer-generated content for Pinterest.