Posted on
16/3/2023

Kolsquare Explains: The Influencer Marketing Value Chain

In the digital age of 2023, influencer marketing has established itself as one of the most effective ways for brands to reach target audiences and increase visibility. The influencer marketing value chain can be divided into several phases, each of which is critical to the success of the campaign. For this reason, today on the Kolsquare Influencer Marketing Blog we explain what the value chain of influencer marketing is and what marketers need to pay attention to.

illustration with the text “Value chain” in the center and a growing red arrow
illustration with the text “Value chain” in the center and a growing red arrow

Key Takeaways

  • Key players in the influencer marketing value chain are influencers, brands, agencies and platforms.
  • Phases of the influencer marketing value chain include identifying the right influencers, building relationships with them, developing and executing a campaign strategy, and measuring the results of the campaign.
  • Of course, the pros and cons of influencer marketing need to be weighed to optimize the value chain.

As I’m sure you know, influencer marketing implies working with individuals who have a large social media following and using their channels and voices to promote products or services to their followers. So, when brands understand the influencer marketing value chain, they can maximize the potential of this powerful marketing tool to increase brand awareness, drive sales and build long-term relationships with their target audience. Whether you’re a brand looking to launch an influencer marketing campaign or an influencer looking to partner with a brand, understanding the influencer marketing value chain is essential to achieving your goals.

You can always request a free demo of Kolsquare’s services to learn the value that Kolsquare’s all-in-one solution, powered by the latest technologies, can bring to your influencer marketing strategy.

The Key Players in the Influencer Marketing Value Chain

Let’s start at the beginning and deal with the different players involved in an influencer marketing campaign: Influencers, brands, agencies and platforms.

Naturally, influencers are at the center of the value chain, as the marketing strategy revolves around them. Creators have built a loyal following and are, therefore, able to recommend products or services to their audience and ultimately promote them in a subtle way. Depending on their reach, engagement and niche, they can be classified into different categories, which you as marketing experts are surely familiar with.

Certainly, influencer marketing is a two-sided sword. Influencers are no longer just influential individuals, but also capable business people and founders who have built their businesses online over the past years. Accordingly, not only are you as a brand interested in a collaboration, but they are too. For brands, however, it is essential to find the right influencers and negotiate the terms of the collaboration. As a brand, you usually provide the products or services to your partners, and may provide guidelines on how they should be presented to the audience. Kolsquare side tip: Always give your influencers enough creative freedom. Their fan base follows them for a reason – they value their approach, passion and approach.

Platforms like Kolsquare act as intermediaries between brands and influencers, helping to identify the right creators for a campaign, negotiating the terms of collaboration, providing guidance and support throughout the campaign. They can also help develop campaign strategies, create content, and measure and analyze campaigns. These are the top 5 influencer marketing agencies in Germany.

Platforms or social networks play a crucial role in the influencer marketing value chain, as they provide influencers and brands with a way to connect and collaborate. These platforms can range from social media platforms like Instagram and YouTube, which you can then choose as your playout channel, to dedicated influencer marketing platforms like Kolsquare, AspireIQ and Upfluence. They provide tools and resources for brands and agencies to identify and work with influencers, track campaign performance and measure results.

What Is the Process of Influencer Marketing?

To better understand the influencer marketing value chain, we need to dive deeper into the influencer marketing process. To be able to guarantee the success of a campaign, following these five tips to optimize the process of your influencer marketing campaign is very important.

1. Identify Influencers: the first step of any influencer marketing campaign is to research and analyze potential collaborators based on their reach, engagement rates, audience demographics and content quality.

2. Negotiate skillfully: Once you have identified potential influencers, you need to negotiate the terms of the collaboration. This includes discussing compensation, deliverables, timeline and any other requirements or expectations. Terms may vary depending on the type of collaboration, such as sponsored posts, product reviews or brand ambassadorship. Read Kolsquare’s quick guide to negotiating pricing with influencers for more information.

3. Create the strategy of your influencer marketing campaign: Once you have identified the right influencers, work out a campaign strategy either directly with them or with their agency according to your marketing goals.

4. Launch the campaign: Once the campaign strategy is in place, the brand and influencers create content and publish it on KOL’s social media platforms. This may include Instagram posts, YouTube videos, blog posts or other formats. The brand can also provide influencers with exclusive discount codes or affiliate links to track campaign performance.

5. Measure success: Lastly, as with any campaign, you need to measure success. What metric are you tracking: engagement rates, website traffic or sales conversions?

Benefits of Influencer Marketing in Terms of the Value Chain

The benefits of influencer marketing for brands are numerous: compared to traditional advertising, influencer marketing appeals to a targeted audience. That’s why it’s also so important to clearly define your goals so that you can optimize the collaboration. Furthermore, influencer marketing is an effective way to build or expand brand awareness. By leveraging the reach and influence of influencers, brands can introduce their products or services to a wider audience and increase brand awareness. As a consequence, influencer marketing can increase your revenue by generating more sales, as the brand and consequently its products or services are promoted credibly and authentically.

The advantages of influencer marketing for influencers: Influencer marketing offers creators the opportunity to monetize their content, as by collaborating with brands to create sponsored content, they can earn money with their creativity and influence. In addition, collaboration can also increase influencers’ followings, as they can reach a larger audience. Together with a brand, creators can build and expand their personal brands and establish themselves as experts in their niche.

Challenges of Influencer Marketing in Relation to the Value Chain

Everything that has advantages also has disadvantages or at least challenges that you should be aware of. Consequently, let’s talk about some of the main challenges:

One of the biggest challenges of influencer marketing is the lack of regulation. Since there are (still) no clear guidelines or industry standards, there is a risk of falling for fraudulent behavior, such as buying fake followers or inflating engagement rates. This lack of regulation can also lead to a lack of transparency and authenticity, which in turn can undermine the effectiveness of influencer marketing. Because of these difficulties, there have also been negative publicity for brands that have worked with influencers in recent years.

Additionally, measuring the return on investment (ROI) of influencer marketing can be challenging, as the direct impact of IM on sales or brand awareness can be difficult to determine, making it a challenge to justify the investment. At the same time as influencer marketing has become more popular, the number of influencers on social media platforms has increased dramatically, making it increasingly hard to identify the right influencers.

About Kolsquare

Kolsquare is Europe’s leading Influencer Marketing platform, a data-driven solution that allows brands to scale their KOL Marketing strategies and implement authentic partnerships with KOLs (Key Opinion Leaders). Kolsquare’s technology enables marketing professionals to easily identify the best Content Creators profiles by filtering their content and audience, and to build and manage their campaigns from A to Z, including measuring results and benchmarking performance against competitors. Kolsquare has built the largest community of influencer marketing experts in the world, and offers hundreds of customers (Coca-Cola, Netflix, Sony Music, Publicis, Sézane, Sephora, El Corte Inglés, Lacoste, …) the latest Big Data, AI and Machine Learning technologies to drive inspiring partnerships, tapping into an exhaustive network covering 100% of  KOLs with more than 5,000 followers in 180 countries on Instagram, TikTok, Twitter, Facebook and YouTube. As a Benefit Company, Kolsquare has been pioneering Responsible Influence by championing transparency, ethical practices, and meaningful collaborations to inspire change.

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