WPP recently acquired social influencer marketing agency, Obviously, after acquiring influencer shops Goat and Village Marketing over the past year. Creative and media agency McKinney (parent of Cheil Worldwide) this year acquired August United, an influencer marketing agency. inFi, a pioneer in LinkedIn influencer marketing, was acquired by Cherrystone Media; the former had worked with brands like Amazon, Spotify, Aditya Birla Group, Smallcase, among others. Just a few years back, Martin Sorrell’s S4 Capital acquired influencer marketing company, IMA, combining it with its content arm MediaMonks to bolster output.
Experts say this trend of bigger network agencies gobbling up smaller influencer marketers is driven by the need to stay relevant in a rapidly changing landscape, and to provide clients with comprehensive solutions that leverage the power of influencers. And it is likely to continue as influencer marketing continues to evolve — marketers are spending over 10% of their annual digital marketing budgets on influencer marketing to tap into the hyperlocal reach provided by them.
Statista values the influencer marketing industry in India at over Rs 12 billion in 2022, and says it grow at a compound annual growth rate of 25% over the next five years, touching Rs 28 billion by 2026. As of last year, there were more than 150 registered and unregistered influencer agencies in India.
Larger agencies have typically relied on a combination of in-house strategy development and downstream agencies for the execution of influencer marketing campaigns. Strategic acquisitions are undertaken to gain specific business expertise and capabilities that can be internalised, which then leads to improved outcomes, say experts. “Many influencer agencies specialise in managing campaigns with micro or nano influencers, who can be highly effective for niche brands. Network agencies can scale these models to meet the needs of larger clients,” says Yasin Hamidani, director, Media Care Brand Solutions.
What is in it for the influencer marketer? That’s a no-brainer.”The influencer marketing agency wants to work on campaigns for brands of all sizes to be able to scale up,” says Preety Singh, co-founder & MD, Boomlet Group. But acquisitions can be costly and requires much to ensure a mutually beneficial deal.
A key issue that needs to be sorted out when two companies come together is the integration of technology, says Kalyan Kumar, co-founder and CEO, KlugKlug. Some smaller agencies like Goat may not have a strong technology foundation but they might offer significant presence in specific markets and excel in providing managed services, making them a prized catch.
Experts also say such acquisitions have not necessarily benefited the two brands involved. “Once integrated into a larger organisation, the smaller agency loses some of the attributes that make it a dynamic and growth-oriented entity. Factors such as incentives and entrepreneurial spirit often experience a decline under these circumstances,” Kumar notes.
The growing competition also means that network agencies must differentiate themselves from competitors. “They need to showcase the value added — such as expertise in influencer selection, data-driven insights, and brand safety measures, to attract and retain clients,” suggests Gautam Madhavan, CEO and founder, Mad Influence.