Is the influencer agency market ready for takeovers?

By combining these capabilities with Epsilon’s unique data and identity assets, Publicis Groupe will empower all of its clients to lead in identity-driven influencer marketing, through a brand-safe, premium marketplace that directly connects brands with preferred access to millions of diverse creators and their audiences.

This comes about a year after WPP announced it would acquire Goat, an influencer marketing agency specializing in end-to-end influencer marketing campaigns based on data, performance and measurement, in 2023.

Other recent acquisitions of influencer marketing agencies include We Are Social acquiring a majority stake in Singapore-based influencer marketing agency Kobe Global Technologies to bolster its influencer marketing services in Southeast Asia in 2022. Earlier this year, we also saw The Smart Local (TSL) Media Group acquire X10 Media, an influencer marketing services agency operating in Singapore, Malaysia and Indonesia.

Is there any upward trend?

According to Shufen Goh, director and co-founder of R3 and president of AAMS, there is a growing trend among chain agencies to take over these specialist stores.

According to Goh, these can be for a variety of reasons, including access to established technology, infrastructure, talent and community knowledge. They also give network agencies the opportunity to elevate their social or media offerings by integrating that knowledge to close the loop.

However, the challenge and risk with any acquisition, and particularly with a specialist influencer marketing firm, is the loss of its unique culture and ability to remain agile, Goh explains.

“As influencer marketing and community building become a bigger priority for brands to connect with increasingly diverse audiences, more such partnerships and acquisitions seem likely as network agencies look to quickly fill any gaps in their current offerings,” Goh added.

Indeed, influencer marketing is revolutionizing the media and advertising industries, becoming a ubiquitous growth engine for brands due to the channel’s unique ability to forge meaningful connections with consumers.

Social media spending is expected to reach $186 billion by 2025, surpassing global linear TV ad spending for the first time. According to Publicis, influencer marketing will be the fastest-growing segment.

Goh added that clients prefer simplicity and that if influencer marketing can be consolidated with the same team that already handles media or social media activities, it makes sense.

Elaborating on Goh’s comments, Karl Mak, co-founder and CEO of Hepmil Media Group, said the increased number of acquisitions sends a positive signal for the global creator economy. “I personally believe that the creator economy will continue to grow in importance in global markets, so this trend is sure to continue,” he said, adding:

A big acquisition like this is a sign that the creator economy isn’t static. In fact, it’s gained so much momentum that big network agencies are having to take action to stay ahead of the competition.

Saying this, Mak cautioned that while this is good for the market, the downside of this deal could be that smaller players will have to face more competition in the market, forcing many of them to change their business profile or consolidate in order to remain competitive with “giants” such as Publicis and WPP.

He added that large agencies have the scale and breadth of offerings to appeal to a specific clientele that requires scalable, multi-market solutions, while smaller shops have the agility to provide more personalized solutions. “At Hepmil, we see room for both to play different roles in a rapidly evolving market, which should lead to healthy competition, hopefully sparking new models and innovation,” he said.

Natural progression

According to former ad tech Jeffery Seah, who is now a partner at Quest Ventures, these acquisitions are a natural next step in scaling creative and media operations as marketers now look to “align sales funnel building with conversion attribution” – something that was harder to do before data became a priority for agencies.

Seah explained that with both the media landscape and traditional buying becoming more fragmented than ever before, influencers are the most effective channel for delivering business results.

In Southeast Asia in particular, customers are used to fast, good and cheap solutions. “Thanks to influencers, they have adapted to fast, good and valuable partners,” he added.

He shared that influencers are now being used from market research to distribution to conversions. “The agencies in the middle need to create unique value in these three-way relationships, beyond being an enabler or a middleman leveraging FTE margins and costs,” he said.

As influencer companies are acquired by larger networks, Seah also believes that “marketers will partner with large agencies and/or influencer marketing firms that can adopt a new way of doing business 24/7 996 (9am-9pm, 6 days a week). Working closely with content and influencer agencies like Hepmil and Partipost, he shared that the landscape in Southeast Asia is much more dynamic in these spaces due to the concentration of geographic acquisitions.

That said, the influx of takeovers of smaller influencer agencies by larger networks has its drawbacks. According to Aditya Aima, Managing Director, Growth Markets at AnyMind Group, believes there could be a reduction in the diversity of influencer marketing innovations, which would have a broader impact on the influencer marketing economy.