Business of Fashion, BY ALEXANDRA MONDALEK
The social media giant is launching services that will help influencers better monetise their followings. But in the longterm, these changes may not best serve creators or brands.
Every change Instagram implements seems to spark influencer anger. Algorithm changes purportedly hide their content; removing “likes” supposedly makes content seem less appealing; making Reels and shopping tools more prominent on the platform worsens the user experience, some say.
But after years of frustration, Facebook — Instagram’s parent company — is finally courting creators by giving them what they want: more tools to make money.
At the end of April, Facebook announced that it will introduce new tools meant to improve the influencer experience on its platforms. Those include a matching tool for brands and creators and an affiliate marketplace that will enable influencers to get a cut of the sales from products they share. Influencers will also be able to have “Creator Shops” on their profiles, a feature previously only available to brands. Facebook declined to comment on the announcement further — and the timeline for the rollout of these features is still unknown.
The catch is that all of Facebook’s new services already exist — they’re just provided by third-party firms, companies that have helped grow the influencer economy, giving Facebook’s platforms a boost in the process. But with Facebook soon to offer many of the services they provide in-house, there’s a risk that influencers could elect to use those tools instead, leaving these firms in trouble.
Facebook has a history of copying the tools and features that make other businesses successful, which Mark Zuckerberg himself admitted during a US Congressional hearing in 2020 over the company’s alleged anti-competitive practices. (Zuckerberg did, however, deny that any of the company’s actions are illegal.)
So far, Facebook has spared those third-party influencer marketing firms from the fate that other of the tech giant’s competitors have met. And even as they encroach on the territory of the companies that provide influencer tools, these updates are likely not a death knell, as the influencer marketing economy has grown to rely proportionately less on Facebook-owned platforms alone.
A Boost for Influencers
In the influencer space, the widespread sentiment is that Instagram is too big to ignore, but not as creator-friendly — or lucrative — as other platforms.
Most social media giants have made public overtures to curry favour with influencers, particularly in the last year. TikTok launched a $200 million creator fund, with plans to grow to $1 billion over the next three years. In January, Snapchat introduced its TikTok competitor Spotlight, offering $1 million a day to users whose content went viral. YouTube announced both a $100 million fund meant to amplify Black creators and its first-ever beauty summit that will feature its top personalities. Even audio-only upstart Clubhouse is rolling out creator monetisation tools.
Facebook’s announcement in April, then, should be encouraging for influencers.
“To me, the biggest shift was just the overall messaging and saying, ‘okay, creators are really important to our platform,’ and that’s really something that [Facebook] hadn’t said and then put action behind,” said Mae Karwowski, CEO at influencer marketing platform Obviously.
And even if the updates are coming after competing platforms introduced similar initiatives, Facebook and Instagram are still important enough to influencers’ businesses that its new features will likely be welcomed with an attitude of ‘better late than never’ as opposed to ‘too little too late.’
The biggest shift was just the overall messaging and saying, ‘okay, creators are really important to our platform.’
“[Facebook’s] scale and ability to both find audience and monetise could make [Facebook] platforms highly compelling for creators over time,” read a JP Morgan equity research note published on April 29 following the company’s first-quarter earnings.
Janibel Rosanne, a beauty and lifestyle influencer with about 50,000 Instagram followers, said she expects the upcoming tools to be a “huge, expansive upgrade” to the influencer experience on the platform, which isn’t always frictionless. Influencers can find it more difficult to build a following on Instagram compared to other platforms, and say they are continuously told that they need to use new feature (like Reels) in order to surface their content to followers on the platform. The Instagram algorithm — which previously fed content to users in chronological order and now delivers content based on a user’s behaviour — is also a particular source of ire.
“I think it’ll be a good way to grow and make money, but a lot of people are going to be hesitant at first just because it’s another thing that we have to worry about,” Rosanne said of the new tools. “It’s just another thing to add into the mix on social media and that can get overwhelming. Some of us are already overwhelmed.”
Who’s At Risk?
While analysts believe the new tools will be a boon for influencers, those tools could potentially disrupt existing businesses in the influencer marketing space. For businesses that operate as SaaS (“software as a service”) or “click and buy” marketplaces — where brands pay to be matched with talent in an automated way, for example — Facebook’s new tools may spell trouble. But the impact will likely only be intense for firms whose businesses focus disproportionately on Facebook-owned platforms.
Firms that operate with a more comprehensive approach to influencer marketing — both in the platforms they work with as well as the services they provide — believe they are less susceptible to Facebook cannibalisation. ITB Worldwide, which offers influencer marketing services in addition to other creative and marketing services, views the new Facebook tools as a “complement” to its business, said managing director Emma Shuldham.
“We’re in the business of influence that’s data-driven, but it’s the human insights that will ultimately be what services our brands and our clients,” she said.
The idea of consolidating influencer operations to one platform once Facebook introduces its new tools — like its eventual brand-creator matching feature — may, in theory, be appealing to fashion brands. But in practice, fashion brands’ approach to influencer marketing must include other platforms to reach wider and often younger audiences who spend their time elsewhere.
Meanwhile, though the details of Facebook’s affiliate marketplace are still unknown (for example, what percentage of a sale influencers will make from followers’ purchases), it seems to pose less of a threat to veterans in the affiliate marketing space — where influencers make a commission off of products they promote that drive sales.
Content monetisation platform RewardStyle and its subsidiary, LikeToKnow.It, for example, allow consumers to shop influencer-curated shops through its app, but also use its affiliate links across platforms. Given the convergence in user experience across social media platforms, it’s likely that every social media platform will eventually take Facebook’s cue and creates a space for influencers to create their own shop pages. The consequence of that, however, is less efficiency for brands and influencers who will have to manage shops on several different platforms rather than one, said Kit Ulrich, general manager at LikeToKnow.It.
If Facebook Creator Shops are as under-utilised by consumers as they are in their current iteration — Instagram’s Checkout feature, which is available to brands and retailers and has been slow on the uptick — they may be more of a window-shopping tool than one that drives conversions.
“Imagine what that’s going to look like as a future of an influencer,” Ulrich said. “You’re building one shop and you’re figuring out how to market and bring your followers to one shop you own over time, or you can imagine a world where you’re managing eight different shops, and having to divide your time.”