đ Hello, welcome to Goodwill Factories. Each week I go in depth on an issue in the creator economy.
This week: Creator Marketing
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The conversation on the creator economy largely focuses on the growth of creators or the tools enabling them. But what about what is being built by the creator economy? Itâs not something thatâs focused on because itâs a bit of a macro level idea that doesnât seem obvious. Creators are giving a new value to the infrastructure that theyâre building their audiences on. As they individually build their audiences, theyâre collectively adding value to a distribution network. Whatâs interesting about this is that creators are the gatekeepers of this network.Â
This is a post about whatâs typically called âinfluencer marketingâ. Through speaking with creators and brands, thereâs some misconceptions on both sides about how it works and how to think about it successfully. I contrast this mode of advertising to what itâs typically compared against; paid ads, or, PPC.Â
Ultimately, creator marketing needs to find its footing in the marketing toolbox. Here I cover the strategy behind creator marketing and contrast it against paid advertising to really get to the bottom of where creator marketing works best.
The Law of Shitty Click Throughs
I love this article by Andrew Chen. His argument is fairly simple: all advertising channels provide diminishing returns on engagement over time. The average click through on a display ad in the very beginning of the internet was 78%, facebook ads now has an average CTR of 0.89%.Â
What Andrew is saying is that companies often donât find defensible differentiators in their advertising channels. Tactics are easy to replicate and consumers eventually disregard ad placements. Whatâs the solution to all of this? Andrew suggests that itâs finding untapped marketing channels. Agility and innovation are key differentiators that can make a companyâs marketing dept a key competitive advantage, however, I believe thereâs another way to prevent this.Â
Thereâs a shift in marketing strategies for companies today that leans towards media. Itâs not enough to have a blog any more now that companies are adding newsletters and communities to the list of acquired companies as well as partnering with creators. This February, HubSpot purchased the famous newsletter TheHustle in a move that beefed up Hubspotâs marketing department. This is about differentiation through distribution.Â
Distribution is not enough anymore now that anyone can get their message onto the screens of potential customers. Building an internal media company is about differentiation through strengthened distribution. Everything is about building trust with the buyer, and companies are very quickly realizing that who distributes your message is just as, if not more, important than where your message is distributed. Facebookâs limitations have become creator's opportunities.Â
Not everyone can afford to purchase a newsletter, and Iâm not positive thatâs the best play. But the reason behind why companies are differentiating through distribution is so that they donât fall victim to the law of shitty click throughs and win the attention of an audience.Â
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Networks
I love scrolling through Facebook Ad Library to see what people are doing for their ads. What I usually see is something that makes me think âhow the hell are they actually targeting people with this?â One of my favourites is Chewy, an online pet store, targeting people who are about to buy a cat.Â
At the core ad networks are infrastructure to distribute a message. The ads that get served on these networks are supposed to be timely message thatâs delivered to the right buyer. My fundamental gripe with programmatic advertising is that itâs an over-engineered solution. In this, we lose an important aspect of humanity and realness in advertising thatâs essential to brand building.Â
When it comes to targeting, are we really getting the results we think we are? Google no longer uses search history to deliver ads, which brings into question whether targeting based on activity was ever really effective, which is what programmatic advertising typically uses to target users with ads. Google is a multi billion dollar company thanks to ads, they wouldnât jeopardize their greatest source of revenue for nothing. It's important to remember that ad networks predict whether a person falls into you targeting parameters. Don't be fooled into thinking it's exact all the time.Â
Thereâs this interesting idea in my head floating around that since weâve become so used to (what seems like) an infinite supply of goods that solve our needs, advertisements need to serve more of a purpose than simply letting consumers know a product or service exists. You see this - a desire for more authentic and real advertising - becoming more demanded by newer generations.Â
Distribution, but make it cool
What about sponsored content? How targeted and effective is that? Itâs tempting to think of creator marketing in terms of PPC, but ultimately I think this is the wrong mental model to view it with. Creators of all sorts are curious what their CPM is so that they can price sponsorship deals. Brands are concerned about whether that CPM is actually working out as well as monitoring other PPC metrics like ROAS, CPA, and conversion rates - which is strange because this is content, not programmatic advertising.Â
With PPC ads youâre buying distribution. Creator marketing is distribution that is authentic and has meaning to audiences. It places your product in context, not a newsfeed or on the peripheries of a webpage. With paid advertising, youâre simply bringing you message to the market, but through creator marketing youâre capitalising on attention.
This is what a lot of good content marketing does. Readers are immersed in an environment talking about problems and being faced with possible solutions. At this rate, if I told you that you could explore this type of advertising with Fohr, #Paid, or Izea how much more likely are you to look into what they offer compared to seeing an ad? While this post definitely isnât sponsored, I hope you can see the point.Â
Now, marketers have the ability to tap into distribution that audiences want to consume. With existing ad networks the ads we see are placed without us asking for it. On the flip side, when weâre consuming the content of people we follow or subscribe to, weâre much more engaged with the message. This is what Seth Godin calls âPermission-based marketingâ. By involving creators, influencers, and ambassadors with their own brand development, their products are seen as being useful by fitting into a greater narrative.Â
Moving forwards
Modern digital brand building will be overtaken by more authentic advertisements. Why? Because itâs becoming more necessary for brands to become integrated into the lives of their customers in a way that people want. Doing this as a brand without partners is a difficult task. Weâre finding that itâs not only about what you say that builds brands, but how and where you say your message that counts.Â
Thereâs a message to be heard for both marketers and creators.Â
For creators, itâs not enough to simply post a photo or mention the company in content. Itâs important that sponsorships are not just things that needs to be done to make a career out of being a creator, but theyâre apart of the content you create. Work with brands you actually want to work with, create stories, and fit products into that narrative.Â
If you want to see this point in action, look at Casey Niestat. He recently made a video about his brother, Van. Towards the end, he mentions that Van is starting a YouTube channel. Van now has 320k subs and has only been around for a week. Go ahead, make a case for why a facebook ad would deliver those results. What made this work, and what makes all of Casey's sponsorships work, is that he weaves them into a greater narrative.
For companies, itâs essential that they release some of the control theyâve become accustomed to via ad networks. Theyâre renting another personâs audience and relying on the storytelling ability of the person who is responsible for having that audience in the first place.Â
Companies that lean in to creator partnerships will see the best results. Itâs not just about your messaging and positioning. Collaborating with those who own a meaningful connection with your target audience bring that message to market. Believe me when I say that your brand and a creator make a heck of a better story that you and a platform. The best ad networks arenât ad networks at all. As consumers want more and more authenticity, the ability to weave your brand into a lifestyle or an environment is becoming more and more important.
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Best,
Brent