This Media Buying Briefing covers the latest in agency news and media buying for Digiday+ members and is distributed over email every Monday at 10 a.m. ET. More from the series →
The impact of social media and social commerce on marketing in the last three years is about as significant as digital’s impact on media over the last 30 years. Just about every marketer and agency realizes that the purchase funnel just doesn’t work the way marketing schools have taught it since the 1970s.
Recent Omnicom research confirms that there’s a generational shift happening. Today, the gap of distinction between marketing to a 20-year-old and a 30-year-old is almost as wide as between a 12-year-old and a 50-year-old. Particularly around younger generations, the, er, influence of influencers and creators is undeniably powerful. Growing in power alongside this reality is the rise of the influencer agency.
Krishna Subramanian, CEO and co-founder of influencer shop Captiv8, explained the difference: “How do you market towards Gen Alpha, Gen Z, millennials and Gen X? Everyone has a different way of looking at it, and you’ve got to think about it from a marketing standpoint. Who might make purchases on their phone. Is there a certain limit that they might hit? There’s maybe boomers who might not buy a plane ticket on their phone, whereas maybe Gen Z will only buy on their phone? And what is that price point? What is that shopping experience?”
This kind of thinking is why it’s important to note that there are two ways to look at the emerging influencer marketing industry: the talent side and technology side of the business. Talent-driven influencer agencies focus on supporting and repping creators and influencers, as well as creative services for influencer activations. They sometimes offer software-as-a-service that focuses on driving top of the funnel marketing objectives, while aiming to attract ad dollars away from TV to the creator space for branding and awareness.
Community-focused creator shop Buttermilk offers a good example, as it builds partnerships with some 80,000 creators and works with 25 current clients, like Gap and Dior. Jamie Ray, CEO and co-founder of Buttermilk, contends that agencies like his are growing quickly, because brands see them as “community experts.”
“Rather than just leveraging the popularity of individual influencers or relying solely on tech solutions, community-first agencies build and nurture vibrant communities around shared values and interests,” Ray said.
The science-tech side of the influencer agency world really straddles data, commerce, measurement and ad tech in varying increments. Agencies including Captiv8, CreatorIQ and Influential embody this second type of influencer agency — and, from what M&A execs say, are the ones more likely to be acquisition targets by agency holding companies looking to beef up their influencer/creator expertise.
More than one finance source with knowledge of holding companies pointed to Publicis as a likely acquirer, not only because it has available liquidity but because it could stand to burnish its expertise in the growing practice. The holdco already has its Fluency practice, which has influencer capabilities spanning media, creative, PR, affiliate and social.
However, one finance exec with knowledge of Publicis’ holdings, noted influencer work “is a gap in their offering and would make sense given the growing influencer segment and client needs.” The exec said they believe Captiv8 would make a good fit.
Publicis declined to comment.
Ryan Detert, CEO of Influential, another one of those agencies leaning into the tech-focused managed services part of the market, believes the majority share of sending and consumer attention are happening on the data and technology platforms that are used to vet creators, provide metrics and identify audiences.
“We are the largest tech-enabled managed service influencer platform, by revenue, in the world,” Detert said. “For most brands, it requires both people [services] and technology to work with and leverage creators effectively.”
Influential has worked with major brands from Denny’s to Ulta Beauty, grossing some $500 million in campaign revenue to date and offering a network of 3.5 million creators.
As far as the mergers and acquisitions appetite, analysts and investors alike say the market is interested in influencer companies that do both, too. Sean Everett, CEO of startup and tech advisory firm Evergence, said investors paying attention to the “SaaS-based businesses” will gravitate toward the tech platforms.
“But even SaaS is under threat these days with dampened growth,” Everett cautioned.
Maureen Kerr, head of the media and entertainment practice at management consulting firm Arthur D. Little, added investors want to see that companies have infrastructure going beyond the talent services.
As for some of the companies gaining investor interest? Kerr listed IZEA being on the watchlist, as well as content and social platform Jellysmack, full-service influencer marketing platform Upfluence, influencer and talent agency Viral Nation, and data-driven influencer platform Traackr, among others focusing on both influencer services and software.
Additionally, with the recent explosion of artificial intelligence and other immersive technologies, agencies are seeing different ways to leverage influencers and software integrations. Coming out of Cannes this month, TikTok launched an AI feature for brands and creators to create avatars for their campaigns. Influencer marketing company IZEA was among those launching an AI product, IZZY — a tool aimed at building influencer profiles, audience analytics and other content features.
IZEA CEO Ted Murphy sees the tech-focused influencer agencies being attractive for delivering the quantifiable results, but those on the creative and talent side also stand out for their “deep relationships with influencers and the ability to craft authentic, compelling content.”
“[In the] long term, we believe these concepts will begin to merge as the industry inevitably consolidates,” Murphy explained. “Ultimately, brands are most interested in agencies that can seamlessly blend strategic excellence with technological innovation, offering a holistic solution that addresses the art and science of influencer marketing.”
IZEA also recently introduced voice cloning and text-to-speech in FormAI, its AI suite, that can generate content in creators’ voices (or from 100 pre-existing voices in a dozen languages). The company said two more features are coming to FormAI later in June.
As is often the case in growing a business, some influencer shops started out doing one part of influencer marketing — but are now expanding into the other area to keep up with client demands and innovations. Naturally, that means some of them will continue to do a bit of both the talent and tech services, much like global influencer agency Billion Dollar Boy.
“The world’s brands are looking for expertise that checks all those boxes,” said Thomas Walters, Europe CEO of Billion Dollar Boy. “We often hear from brands that they prefer consolidating their creator marketing needs under one agency, rather than working with multiple agencies for different needs.”
Ultimately, it comes down to agencies needing to deliver work at scale, but also offering depth of knowledge and data in the influencer marketing space — combining a mixture of creative, talent and technology. That’s part of why BDB continues to invest in a variety of offerings, from its creator membership community FiveTwoNine to its AI-powered influencer platform Companion. — with Michael Bürgi
Color by numbers
More people are watching TV strictly on their phones now — an increase of more than 1 million homes since 2022, according to The Advertising Research Foundation. It comes as no surprise, though, that the device-only TV growth is driven primarily by younger viewers, with the ARF stressing a need to redefine TV audience measurement and consumption signals. Some study highlights:
Penetration of paid AVOD services more than doubled in 2023, to nearly half of U.S. households — with younger households disproportionately leading the changes in paid streaming.
Households headed by people aged 18-54 were more likely to subscribe to streaming services than households headed by people 55+.
Adoption of AVOD was far less influenced by household income than SVOD was, with paid AVOD penetration increasing from 17% in 2022 to 45% in 2023, while the penetration of SVOD fell from 79% to 72%.
In 2023, 10% of younger households passed up on a paid streaming TV service, and 62% had three or more. That’s compared to 28% of older households that had no paid streaming TV subscription, with 41% having three or more.
Takeoff & landing
Dentsu announced it’s expanding its Business Transformation unit, BX, from its Japan home operations to a global offering.
Digital marketing consultancy/agency Incubeta merged with Persuasion Technologies, a Google Cloud Platform partner. The merger gives Incubeta deeper access into APAC markets.
Account news: According to reports, Omnicom’s PHD successfully defended its Singapore Airlines media business, which it’s had since 2019 … Bay Area full service agency Cutwater won creative and media duties for San Francisco Bay Coffee.
Personnel news: Screendragon, a work management platform supporting agencies and marketers, tapped P. Cory Hogan to be its new CEO, hiring him from Lob where he was chief revenue officer.
Direct quote
“A lot of companies are buzzing around sustainability at Cannes, emphasizing the urgency to move faster. … Companies are moving from policies to measurable outcomes. The focus is on reducing storage, optimizing assets and effectively measuring these efforts. Sustainability has definitely not fallen off the agenda at Cannes.”
— Simon Sikorski, president, global operations, of tech firm XR Extreme Reach.
Speed reading
Michael Bürgi covered a raft of news announcements from Omnicom during Cannes Lions, relating to partnerships with Amazon Ads, The Trade Desk, Tik Tok Shop and Instacart.
I wrote about Captiv8 launching a brand storefront offering to expand creator commerce opportunities beyond social media.
Seb Joseph sat down with Brandtech Group CEO David Jones and Pencil co-founder Will Hanschell to get an explanation of the non-holdco’s approach to generative AI.
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