The influence economy is coming
Is your brand seeing rising CPAs on once-profitable strategies like promoting your brand on Google and Facebook?
Image by Elijah Macleod via Unsplash
If so, take comfort that it’s not just you. It’s apparent to us at Tailify how widespread this sinking feeling is from conversations with our clients. What’s less apparent is why it’s happening.
The answer hides a secret which points to the future of marketing – a shift we call the influence economy.
Understanding the true nature of influence
To understand the influence economy, we must start by understanding the nature of influence.
Ask yourself this question: who or what has influenced you most in your life?
Most people I ask mention a teacher, a public figure they look up to, or a book they’ve read by one of the latter. Rarely does anyone mention a newspaper, a network, a company, or any advertisement they’ve seen by one of the latter.
We take in information from many sources, yet only some truly move us – and most don’t. What’s the difference?
Mass channels like TV, newspaper, and even paid social advertising may hold our attention, but they do not hold our trust.
Messaging which invades our attention around the edges of content is so often filtered out, while messaging coming from those we trust has a direct line into our brains. It is as if we have a personal assistant at the doorway to our minds asking of those who arrive to influence us, “And who are you exactly?”
Think of those who’ve moved you and those you’ve ignored in your own life, and this equation will become self-evident.
The shift in influence
So what explains falling CPAs across once profitable mass media and programmatic channels? The answer lies in the history of influence.
In the early days of humanity, we were influenced entirely through word of mouth. Human networks were small, and we distinguished the trustworthy from the untrustworthy by familial or tribal bonds. Those closest to us and those highest in the hierarchies in which we were embedded held the most sway. This was the context which shaped our brains for millions of years.
The growth of civilisation from 10,000 BC to the 1990s brought a new source of influence – mass media – with exponentially increasing bandwidth. From the stone tablets of Mesopotamia to the printing press, radio, and television, it became possible for one voice to reach millions of people with one message. But mass media was so expensive and bandwidth was so limited that only a few could put across their message, and these few were most often already sources of authority atop hierarchies, such as government, enterprise, and religious leaders. Due to the lack of alternatives and relative source credibility, mass media had our attention as well as our trust. Brands looking to influence people could then reliably turn to mass media to change beliefs and behaviour.
The birth of the internet in the 90s began to change the game. Increasing bandwidth allowed new voices to win attention, undermining the influence of legacy mass media sources like newspapers and TV. At the same time, Google and Facebook made it possible for one voice to reach millions of people with not one but millions of different messages based on newly available data about these consumers. This micro-targeted approach combined with a shift in attention towards these new platforms allowed brands to influence people much more cheaply and effectively.
The growth of social media in the last five years marks a new tipping point and brings us full circle. Mass media, once the home of influence, has seen sharp declines in trust and attention. Google and Facebook are also losing trust due recent revelations of their handling of personal data, bringing a corresponding decrease in attention and therefore influence for the ads they serve. At the same time, social media has enabled millions of people to reach millions of people with millions of different messages. The increasing variety and quality of voices on social media has made it easier than ever to tune out non-consensual messaging and tune in to trusted voices. If the world of mass media was a public park, this world of social media is a jungle of walled gardens, with consumers enclaved inside with those they trust and brands left outside without a key.
In short, influence is shifting to influencers, individuals we pay attention to and trust over all other sources. Where influence once lived with mass media channels and then programmatic platforms, influence has now dispersed into the vast social graph – a word of mouth community like those of our ancestors, now played out on a global scale.
The influence economy is coming
The scattering of influence from mass channels to networked individuals in turn heralds a shift in what is valued in marketing. Prior to this age, we lived in an attention economy, where attention was the scarce, valuable resource to be efficiently managed between buyers and sellers. Now that trust and attention have become uncoupled, attention alone is no longer what marketers need to grow their brands.
Influence is the new coin of the realm, the scarcer, more valuable resource to be efficiently allocated. We call this future of marketing centred around influence ‘the influence economy’.
In the influence economy, there will be winners and losers. Marketers seeking influence will outperform those playing the old game of chasing cheap CPMs and wondering why it isn’t working anymore.
The influence economy will reward brands not with the deepest pockets, but with the fullest heart – the ability to connect authentically with influencers and their audiences. That’s because earning influence requires honouring a double consent – the influencer’s consent to work with a brand and the consumer’s consent to following the influencer. If brands operate manipulatively and don’t add value to both relationships, they will be rejected by the social ecosystem, while brands who add value to the community will find themselves not only welcomed but evangelised.
The influence economy is an exciting future. In addition to rewarding brands for authenticity rather than manipulation, it will entail a shift in resources from trillion-dollar ad platforms to the creators themselves, who will now be compensated directly for their ability to move people, creating a more viable career for millions of creators. Most importantly, the influence economy is the dream of the individual who seeks to be free to learn from anyone and to focus on becoming who they most want to be with the help of those they most want to be like.
Whatever you feel about it, make no mistake. The influence economy is coming.
Ian Randolph, head of product and R&D at Tailify
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