How influencer networks are commoditising KOLs in Asia

To the untrained eye, it is getting harder to tell influencers apart. Facetune, flatlays and filters have homogenised social media profiles that supposedly dictate the flow and tide of the Internet (in many parts of the world, influencers are called ‘KOLs’, for ‘key opinion leaders’).

Who has real influence and who are wannabes? Muddling their distinguishability are the fudged numbers. Last year, analytics firm HypeAuditor found that 47% of Instagram influencers in Singapore artificially inflate their statistics on the social network.

Yet brands are no less eager to throw money at A-list influencers, who hold sway over their audiences’ purchasing journey. In China, for example, top Taobao livestreamer Austin Li (pictured below) once sold 15,000 lipsticks in 15 minutes.

The influencer industry—forecasted by Business Insider to be worth up to US$15 billion by 2022—draws its strength from voracious Internet consumption and high trust for word-of-mouth recommendations, both especially potent in Asia.

Austin Li's fame exploded after selling 15,000 lipsticks on Taobao in 15 minutes (Photo: @李佳琦Austin via Weibo)

Joy Lee, associate director of digital at Kantar in Asia Pacific, explains that marketers used to select influencers through a manual, curated process informed by their own personal networks. These days, however, the scale of partnerships between brands and influencers has leapt. Sponsored content on Instagram influencers’ profiles grew by 189% in Asia from 2018 to 2019, according to a Socialbakers report.

In fact, a survey in 2019 by Talkwalker and Social Samosa in India on 800 marketers showed that 34% of them work with 10 to 50 influencers, 15% work with 50 to 100 influencers, and 10% work with 100 to 500 influencers.

“Influencers used to be managed by agencies, somewhat like talent networks, and their rates and selection were not that clear to the marketers… But as time went by, influencers grew in prestige and attracted more and more media spend, and hence brands are now demanding greater measurability over their marketing dollars,” says Lee.

Thus, influencer marketing platforms have popped up around Asia to sift through the haystack of social media sensations. These companies typically help brands navigate and manage partnerships with influencers at scale with tech-driven solutions, whether it is scraping data from social networks to inform influencer search and analytics functions, provide ready access to Internet content creators, gauge impact, or weed out fakers.

Yet, these platforms are looking just as identical as the influencers they work with.

A quick glance at the 11 influencer marketing platforms in Asia that Campaign has surveyed in our Circle of Influencers profiling feature can give one a case of déjà vu. Save for one or two unique features, many of these platforms tout large influencer access, data- and AI-driven analytics and influencer selection, fraud protection technology, and measurement of ROI with similar metrics.

“Tech is easily copied—this sense of sameness is apparent across most types of platform solutions even in other verticals. Unfortunately this makes platform-based services very commoditised, unless a truly disruptive player makes a bid to become the market leader,” Lee points out.

For now, she says, the market remains fragmented with no dominant player.

Finding a footing

Amidst the influencer marketing gold rush, some players still found room to stand out in Asia.

“I am confident in saying that we are the only company in Asia to provide a local approach with regional expertise, and offer dedicated products and services for marketers and influencers across 11 markets,” says Kosuke Sogo, CEO and co-founder of AnyMind Group, referring to the group’s influencer marketing platform CastingAsia, which spans Southeast Asia, Japan, Taiwan and Hong Kong.

Sogo points out that local influencer marketing companies may cover one market or one region, but few has spread as widely across Asia as CastingAsia. He also sees platforms from US and Europe expanding their reach, but there is no strong focus in Asia.

“We have grown from Asia first and Asia remains our key focus,” he says.

Ampverse has also carved its own niche. Instead of jostling with the many generalist influencer marketing platforms, the company focuses on representing and managing esports and gaming content creators in Southeast Asia. The region is touted by Newzoo as the fastest-growing video games market in the world.

Cosplayer & KOL Alodia Gosiengfiao launched an eSports talent agency in Philippines

Charlie Baillie, chief commercial officer of Ampverse, sees increasing examples of gaming talents growing their subscriber base by the millions month to month, while the audience content consumption rate in the community is “surpassing a lot of other verticals”.

Yet, he points out, commercialisation of this space is still nascent in Southeast Asia.

“More brands—including FMCG ones—are eager to tap into the popularity of esports influencers, but are still in the early stages of assessing optimal ways to engage them. Meanwhile, gaming content creators tend to be younger and more inexperienced on the commercial side of the business,” he explains.

Ampverse positioned itself between the two sides to facilitate their partnership. On top of that, it is developing a portfolio of owned-and-operated media and content assets, be it gaming-specific channels, publishing assets and so on.

“While I'm sure there are some exceptions to the rule, most influencer platforms have minimal differentiation from a technology or talent perspective. At Ampverse, our owned assets differentiate us from a traditional influencer business, and we see ourselves playing in a different lane [compared to] other traditional influencer platforms,” says Baillie.

In certain markets, tech-driven platforms also sees few direct contenders in the playing field.
Parklu, for example, is a KOL relationship management and analytics platform in China that uses “sophisticated data algorithms”.

While platforms trumpeting similar data and analytics prowess are popping up all over the world, "this is simply not the case in China", according to Elijah Whaley, chief marketing officer of Parklu.
Whaley points out that local brands have little incentive to invest in technology to handle influencers at scale when they can “throw bodies at it”.

“Labour is cheap in China," Whaley says. "A lot of influencer marketing here is still managed via interns keying in data manually into Excel spreadsheets—simple ROI tracking methods without much use of sophisticated tech. It’s only multinational corporations or large Chinese brands that are using analytics technology."

He adds that Parklu’s main clients are multinational corporations in China, while a couple of local players have a stronger hold on the local market.

Over in India, Pranay Swarup, CEO and co-founder of Chtrbox, points out that a growing number of small-scale influencer marketing platforms is operating in the country. But he claims that only two or three direct competitors are operating at the same scale as Chtrbox, which has access to over 300,000 influencers.

As a whole, he says, the influencer marketing landscape in India is two to three years behind developed markets like China and the US. The market has only started growing rapidly in the last two years, thanks in part to rising consumption of social media on the go—mobile data costs have plummeted across the board following a telco player offering data for free. 

Juhi Godambe is one of Talkwater's 60 top Instagram influencers in India

However, Swarup believes that the Indian influencer market is at an inflection point.

The survey by Talkwalker and Social Samosa on marketers in India seems to agree—72% of respondents said they will increase the amount of money invested in influencer marketing in 2020. 

Moving forward

The lack of competition does not mean it is business-as-usual for these platforms. In fact, reinvention is underway.

Chtrbox, for example, has a new focus. Last year, it piloted working with a few influencers exclusively and helping manage the business aspects of their content creation, such as identifying suitable brand partnerships, legal contracts, public relations and so on.

Swarup says the platform will invest more in this business unit starting April.

The impetus came from the influencers, who requested extra help to deal with the ballooning business and opportunities, according to Swarup.

On average, he estimates, influencers’ earnings across Chtrbox have doubled in the span of a year. Some influencers are also keen to branch out into entrepreneurship, such as launching their own product lines, or monetising through offline channels and events.

“In the next couple of years, we will focus on expanding our marketing business and building new business units around digital talent,” he says, adding that this includes creating entertainment and content intellectual property with influencers.

In Southeast Asia, Ampverse has also stepped up on its partnership with influencers. Last November, it launched the Ampverse Creator Fund, which will pay signed content creators in the form of dividends on top of their normal earnings. The dividend is based proportionally on each talents' impact towards the commercial performance of Ampverse.

“Ultimately, we are a talent-first business that’s built to support gaming and esports talent from this region by embracing gaming talent as a stakeholder of Ampverse. The growth and success of talents across the region has a direct impact on our business and we wanted to implement a structure that ensures both parties are set to benefit for the long term,” Baillie says.

Over in China, shifting market conditions is compelling Parklu to make adjustments to its business model as well.

Whaley explains that the cost of running a KOL campaign on social media platforms in China is rising. Demand for content creators with proven track records of influencing their audience are skyrocketing, which leads them to command hefty fees.

He also points out that social media platforms in China are charging brands a percentage to run sponsored posts with an influencer—the percentage can sometimes come up to half the influencer fee.

All these translate to higher customer acquisition costs that is “out of whack”—sometimes even outpacing the lifetime value of a customer, Whaley points out.

“It’s making influencer marketing almost unjustifiable. However, the reality now is that it is impossible [for a brand in China] to reach and communicate with customers without KOLs,” he says.

Parklu sees the need to adapt. This year, the platform will add features that help brands retain customers, including community building and advocacy programmes, to increase the lifetime value per customer.

AnyMind Group's CastingAsia has also been busy evolving. In January, the group acquired Japan-based influencer network, Grove, which brings in 150 exclusive creators and 750 registered creators into the CastingAsia Creators Network. This follows the group’s acquisition of Moindy, a multi-channel network in Thailand, last year.

L-R: Grove CEO Junki Kitajima, Kosuke Sogo of AnyMind 

Anymind Group's Sogo points out that these acquisitions helped the group to build expertise in growing influencers’ presence on social media, including "delivering workshops for content creators, social media channel optimisation and monetisation, and content production expertise like video production and editing."

AnyMind Group also formed a joint venture with Japanese PR and talent agency Sunny Side Up, to expand its breadth of service offerings in Japan.

More acquisition and consolidation is "definitely in the cards" for the influencer marketing platform space in Asia, according to Kantar's Lee.

Swarup expects the same. "I see consolidation happening, because you can’t have too many small players. Everybody will be fighting for the same pie and reinventing a lot of wheels, building similar technologies. We are all working towards the same goal, and much like with other industries, the best will come together and grow further together.”