Five Ways to Make Your Agency Influencer Spend Go Further
I joined agencies around about the time the word “influencer” became the word on every marketers lips, for good or for bad. At the time, the agency I joined was obsessed with what it’s competition was doing to see such huge growth in such a short space of time. Clients we’re throwing money at them.
“They’re guaranteeing results! They can’t guarantee organic results, it’s impossible to predict with creators!?”
“They’ve got a program that boosts the content without the client knowing!!!”
5 million views on a USA Influencers IG Post was made up of 4.5m viewers in Asia. The client didn’t ask, the agency wasn’t telling.
It was the Wild West (it still is).
Fighting for a point of difference has become the key focus for agency leaders. At the same time, brands are still trying to grasp who they should listen too when it comes to influencers and social media. Every day there’s a new ‘expert’ trying to explain how to get the most out of the tactics. But, whilst this happens, a silent war has been waged against brands that they have no idea is happening.
A war built on confusing and deceiving financial models, that take brands for a ride.
“We’re going to hit their target views and still have $50,000 of influencer spend remaining”
“Great, take it as margin”
“But, couldn’t we spend the $50,000 and hugely over-perform, or even better, use the cash to launch another campaign for them? We’ve already taken our agency fee.”
“No, let’s take it as margin and not tell them.”
Now. I for one understand that agencies need to survive, and knowing where the next big paycheck is coming from can be concerning. But when did cash-flow, profit and deceit trump transparency, honesty and trust. I believe you can have the latter and still build a highly successful business.
WAY ONE - CHECK THE CONTRACTS!
During my tenure as an agency leader for a fast-growing agency we came across a client who wanted us to contract a ton of influencers, but wanted to sign the contracts themselves. Smart, I thought, we’ll be unable to take margin and their spend will go further.
Sure, some brands prefer to work on a margin mode with influencers, they pay a set amount for the campaign, want to hit a pre-determined result, and the agency can take the remaining cash as their profit (I hate this model, it’s hard to resource plan for). But going back to my earlier note, agencies can whack a bit of paid spend behind a campaign, and all of a sudden your spend has achieved the results for next to nothing and your agency has pocketed a tonne of extra cash, and chances are they’ve bought the results in a country you don’t even care about.
Am I painting a bleak picture of adland… good, it’s about time it owned up to it’s failings.
Ardent never hides creator contracts from brands, in fact we make constant reference to the costings in our reports to ensure the results you see are reflective of the cash you spent. If you’re partnering with an agency ask to see the creator contracts, it removes any difficulties later down the line.
WAY TWO - SEPARATE YOUR DIRECT COSTS & AGENCY FEES
Building on the above, when you partner with an agency ask them to break down their agency fees and direct costs. Productization vs Hourly Rate-Cards is a hot topic which can make agency fees more difficult to justify, certainly for start-ups, but it’s important to align on the value the agency brings to the process. If an agency feels like they should be making more money from a project thats a conversation they need to feel comfortable having, sometimes it won’t work out and that’s okay.
When building out fees, I always seek to understand the time it will take to deliver a piece of work and add 10-20% contingency. Sure, I could productize or even charge bigger brands more money, but where I’m at currently is I’m not here to make more cash for the same amount of work, I’m here to build relationships and deliver campaigns that leave behind a legacy. The marketing industry has never been more difficult to retain and justify spend, and agencies who can ride that wave with brands will hopefully gain enough respect to benefit in the long-run (am I being naive… maybe).
WAY THREE - BUY INTO PAID BOOSTING
The deceitful agency had a point from earlier. Paid boosting is smart (only when it’s done properly). You pay all this money for a piece of work and the algorithm destroys it. Sometimes sh*t happens, you assess where it failed and take learnings for next time. But what if the piece of content resonates well with the people who see it, and causes them to act. BOOST THE HECK OUT OF IT! Challenge your agency to build a model that utilizes paid to maximize the results of the assets. You may be surprised that allocating an extra $10,000 of spend can drive incremental growth that far outweighs the spend. Curiosity wins most of the time.
At Ardent we recommend paid on every single campaign. We explain how it works, what it’s goal is and what we think it will achieve. What’s better, we add it as an inclusive cost (within your budget) or an exclusive cost (outside your budget) at your request. This way you can see how this tactic should improve your performance without impacting the initial request.
WAY FOUR - GET USAGE FOR THE CONTENT
As standard, you should get usage for the content you create, as long as it’s worth it. Creators who produce high-quality assets that cause consumers to take action should be in a library of assets that you can reuse time and time again (didn’t I just talk about boosting…). It’s a age-old theory that if you see success doing an action you should keep doing it until it stops being successful. The same rings true for influencer marketing, so ensure your agency is contracting with a clause that guarantees usage rights for appropriate content for an extended period of time – most of the time you can do this without incurring extra spend.
WAY FIVE - ADOPT A “INCREMENTAL CREATOR PLAN” MODEL
It’s not an industry term, we just use it at Ardent to describe how we work with clients when we’ve not spent their money but we know we’re going to achieve the results. When negotiations are effective, everyone can win. If you’re a brand that’s committed $100,000 to influencer activity and your agency is able to negotiate rates down to $60,000 (which you’ll know if you see their contracts), ensure you had a model that allows the agency to continue to contract up to the $100,000 for an additional cut of margin. It means you’ll drive more success and the agency doesn’t lose out, and in some cases it may mean contracting additional assets with the same talent which means everyone does win.
Sometimes brands prefer to be cash conservative, if an agency has negotiated the rates effectively it pays to not share that information with the brand if there’s fear they’ll request the cash back (not helpful for the old cash flow forecast). A solution; commit the cash to the agency regardless of outcome, even if that means using the cash for a future campaign, just make sure it’s paid according to the original payment terms. Not always ideal for the agency but a better solution than pulling the cash.
BONUS! WAY SIX - PAY UPFRONT. HAPPY CREATORS OFTEN EQUAL BETTER WORK...
There’s a huge issue in the industry around payment terms, brands not paying on time or agencies not managing cash-flow effectively. In the end creators lose out. It erodes trust at every level and can be huge risk from a PR perspective.
Brands should consider paying their influencer fees upfront, or at-least 50%, to ensure the agency can negotiate contracts with stronger terms and confidence. Ardent will typically contract brands on 50% upfront payment for direct costs, that are then paid directly to talent upon contract, with the final 50% paid upon the completion of work. That may sound simple, but there are still some risks more of which will be explored at a later date.
But payment on time benefits everyone, so a conversation with your finance teams to ensure that payments can be made upfront and on-schedule gets everyone better work, faster.
