Asia Pacific (APAC) is set to lead influencer marketing becoming the world's largest influencer marketing platform market by 2024 surpassing North America. Here's how.
The global influencer marketing platform market size is expected to grow from $5.5 billion in 2019 to $22.3 billion by 2024, at a Compound Annual Growth Rate (CAGR) of 32.4% during the forecast period.
The North American influencer marketing platform market currently leads the world by size. New research by Markets and Markets a US research firm forecasts that within five years APAC will become the dominant region.
There are a few reasons for APAC growth in influencer marketing platform market:
MCNs or multi-channel networks. Remember them? Like those tiny sunglasses inspired by The Matrix franchise MCNs were big in the 2010s. MCNs offer management and marketing support to creators. They provide production, promotion and monetization. MCNs help creators build audiences, provide access to video production and search out brands for influencer marketing deals. They then bundle vertical specific influencers making them more attractive for advertisers. In return MCNs take a portion of advertising & sponsorship revenue.
By the mid-2010s MCNs started to lose favour. There were stories aplenty of creators being bound by in perpetuity clauses; management time being devoted to top-tier talent at the expense of up-and-coming creators; and too much money being taken from creators in return for too little value received.
China is now re-imagining the MCN. Ruhnn Holding, one of China’s largest key opinion leader (KOL) – or influencer – management companies is tinkering with the largely Western model; adapting it for the Asian market.
Where the new version differs from the old is the high level of commitment and expertise expended on nurturing talent. Lauren Hallanan, a Chinese social media marketing expert who analyses the KOL market explained: “I typically use the term incubator to describe them, because it’s very similar to what you think of as a start-up incubator.”
Ruhnn selects around 1% of talent from scouring 800 profiles a month. The firm then puts the selected creator through marketing tests before running a series of dark posts with their content. If the creator’s audience grows Ruhnn is likely to then offer them a deal.
This hyper-commercialised version of talent scouting reflects just how sophisticated China’s influencer industry has become observes Chris Stokel-Walker in his article for the BBC: China’s influencer incubator. China could serve as a model for other countries’ social media stars looking to make money, Stokel-Walker believes.
Advertisers initially loved working with Western-based MCNs. It relieved them of what IBM used to call the FUD factor. Fear, uncertainty and doubt were largely removed from working with creators because the advertiser knew that by going through an MCN the creators were usually trustworthy sources of high-quality social media content. In short: working with an MCN took a lot of the legwork - and guesswork - out of finding relevant channels on which to advertise.
Stokel-Walker quotes Hallanan. “Social networks really are encouraging these influencers to work with the MCNs.” Working with large companies reassures advertisers and social networks that influencers have been vetted and will act responsibly – while also ensuring they are dependable in their posts.
Compared with the US or UK China offers a more seamless integration of e-commerce revenue streams and online payment systems. China’s social media monolith, WeChat, already allows users to send money and to make purchases straight from the app. Instagram is keen to play catch-up. Adam Mosseri, the platform’s chief, was recently quoted in an FT article as saying he wants to “connect the dots thoughtfully” between shoppers, sellers and the app’s huge number of “influencers” and help the 1bn MAUs to indulge in “window-shopping.” Alibaba and Amazon are already in this space.
Stockel-Walker cites Dayi Zhang, “the queen of e-commerce”. Last year Zhang sold more than one billion yuan (£114m, $145m) of products through her online store, which puts out more than 1,000 products each year.
Zhang acts as research and development department as well as promoter and seller. Whilst live streaming, she asks her fans what they think of what she’s wearing; whether they’d like items in a certain colour, cut or fabric. “We can convert those ideas and fashion trends into sales,” says Mac Zhou, vice-president of Ruhnn. “This is a fast-responding industry.”
This positions influencers right the way across the customer journey, from new product development through to the well-trodden turf of awareness building through to consideration, sales, and aftercare.
WeChat’s owners, Tencent, are now courting US influencers to do more activations in Asia. A recent panel at an East-West forum event in the run up to this year’s Vidcon was titled: “How Tencent could help your influencers’ business in China.” The event was hosted by the Qingteng Club, a group affiliated with Tencent Holdings - according to a report by Lucas Shaw in business-title, Bloomberg.
Tiktok, the short-form video app, Tencent and Baidu - an Asian internet browser - were all scheduled to speak at Vidcon. There role: to explain Tiktok’s stratospheric growth and to woo US influencers to create for new audiences on new platforms. YouTube is outlawed in China.
The Chinese tech companies newfound interest in US influencers is at odds with traditional media. Chinese film studios are rumoured to be imposing an informal ban on American nationals, fearing that a worsening trade war could lead Beijing's censors to place restrictions on US-related content, reports the FT.
China boasts more cinema screens than the US. Box office takings are on a par with American counterparts. This has been sufficient in the past to woo A-listers such as Christian Bale and Matt Damon. But, no more it seems.
Several large Chinese TV stations have also imposed a ban. Most American actors impacted are those who have moved to China to meet a rising demand for portrayals of foreigners.
Efforts by the Chinese film industry to distance itself from the US were evident at this year’s Shanghai film festival. None of the 15 films in the competition were American, compared with six last year. According to the FT one US executive who was a producer on a movie featured at the festival said he was instructed to avoid the event’s red carpet at the last minute.
Scott Guthrie is an influencer marketing strategist, event speaker, university guest lecturer, media commentator on influencer marketing and active blogger. He works with brands, agencies and platforms to achieve meaningful results from influencer marketing. That tells you something about him but it's not giving you a lot of detail, is it? So, read more here.