Instagram has a reputation among social media platforms for not being the most creator-friendly. There is a greater difficulty to gain a following and less support given to influencers trying to expand and make money. Facebook’s new services will now provide in-house tools for influencers to get more profit from the sales of the products that they promote. While this news is exciting and encouraging for the creators who previously felt overlooked by the app, the new tools could also harm the already existing marketplaces and overwhelm influencers. Business of Fashion takes a closer look on how Facebook’s new tools would effect the businesses, creators, and community at large…
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.
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.
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.
Bu“[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.
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.
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.
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.
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