Influencer Marketing

Influencer to Investor: Brands Are Giving Influencers Equity

Cutout hands taking piece of a pie chart

We’ve all become familiar with influencers as brand ambassadors, co-branding partners, keynote speakers, and even entrepreneurs as influencer marketing has become a staple in nearly every big brand’s digital marketing strategy. Because the fact of the matter is, influencer marketing works.

And as we head into 2023, the stage is set for influencer marketing to evolve further as even more opportunities present themselves for brands and content creators alike. However, alongside these developments there are also challenges that will push brands to build stronger long-term business relationships with influencers. 

How can they achieve this? By giving influencers a stake in their business.

Giving Influencers a Seat at the Table

Pricing varies depending on the influencer, their niche, the size of their audience, their type of content, and other factors. In recent years, the most popular ways to pay influencers include the following: 

  • Per post payment
  • Performance only
  • Fixed rate
  • Fixed rate and performance bonus
  • Gifts, rewards, store credits
  • Content licensing fee
  • Affiliate marketing

In fact, many influencers and businesses still abide by the above traditional ways to give and receive compensation. 

But as the industry moves towards securing more long-term relationships between brands and influencers, this aligns with giving influencers a stake in the business. One of the ways to do this is to offer compensation through stock option. 

Stock options are not just for employees but also for contractors, investors, and consultants. Through stock options, a business can grant a party (the influencer) the right to buy (or receive) stocks at a predetermined value. Stock options are usually included in a legally binding contract which means the influencer will become a contractor for the business. Once the nuances are settled, the business can utilize stock options (by itself or along with other compensation methods) to pay the influencer.

The Benefits of Influencers Becoming Company Investors

Stock options for influencers will not just pave the way for more long-term partnerships but will also foster a mutually beneficial interest in the success of the company. In addition, as influencers get more involved with a company or brand, this helps them establish a creative flow that evolves over time. 

Long-term deals cemented by stock options for the influencer will also open the doors to multiple collaborations that can tap various stages of the buyer’s journey.  

A deal involving stock options means an influencer will not only be contractually obligated to post about the brand, but since they have a financial stake in the company they’ll be motivated to post to help the brand succeed. Often, this leads to them going above and beyond. In the current landscape where one-off deals are becoming more challenging to translate into ROI, this type of long-term contractual relationship is best for companies that want to have an effective long-term strategy involving influencer marketing. 

The Next Evolution of Influencer Marketing is Here

Celebrities investing in start-ups is not new, but a celebrity stock option plan (CSOP) fosters mutually beneficial business relationships because both parties are relying on the success of the company. It also allows influencers to be part of a brand without having to start their own business. This is especially true in the case of Nudestix turning its beauty influencers into investors:

“Perma-Influencers” and Nudestix

Olivia Ponton and Stephanie Valentine are the first “perma-influencers” for makeup brand Nudestix. The beauty company labelled these partnerships as CSOP, meaning, in exchange for equity in the business, the influencers have agreed to regularly post about the brand throughout 2022 and into 2023.

This type of deal makes sense for both influencers, who are moguls in their own right. Olivia Ponton has worked as an ambassador for the company since March 2022 and currently has a limited-edition blush line with them called Nudies Bloom. They both believe in the product as well the company, which is why they decided to take the leap and invest in its growth.

This type of partnership builds a stronger bond between the brand and the influencer, but also their audiences, because it’s not just about a one-off post anymore. It’s a mutually beneficial relationship that can actually build anticipation more than a one-time #ad or #sponsored post. These influencers can provide their followers with insider knowledge, exclusive offers, a leg up in giveaways, live events, and more, while also learning the ins-and-outs of building a better business acumen.