Evie Barrett
Oct 19, 2022

Big brands are losing money by not in-housing influencer marketing

Brands spending more than half a million annually on influencer strategies should use an internal team instead of external agency partners, says UK creator economy company HYDP.

Big brands are losing money by not in-housing influencer marketing

The Lost Billions report claims that when it comes to influencer marketing, “in-housing becomes financially beneficial when annual budgets exceed £497,000 ($560,000). As budgets rise above £500,000 ($563,000) annually, the cost savings grow exponentially, and as budgets reach £2m ($2.25 million), the cost savings reach nearly half a million ($563,000).”

A brand spending between £500,000 ($563,000) and £2m ($2.25 million) per year on influencer marketing via an in-house team is calculated to be making an average cost saving of 12.5%.

HYDP said it was taking a “brave stance” by publishing these findings, stating: “After all, as a business, a large proportion of our revenue is predicated on the fees brands pay us to execute projects for them. However, our core ethos as a business is to pioneer a more transparent, impactful future for the creator economy. And to do this, we must accept that the current landscape is broken.”

The firm came to this conclusion by performing extensive financial analysis, calculating the cost of executing different influencer brand budgets with an in-house team or agency team, based on analysis of average salaries and people costs.

The research factored in the idea that creator fees can vary between brands and external partners, with HYDP claiming to have seen evidence of agencies or partners surreptitiously charging a margin of up to 80% on top of creators' fees to brands. It estimates the average margin to be 30%.

Competing with agency knowledge

The creator economy business said brands must not only make financial considerations when deciding whether to hire an internal team for creator campaigns.

In answer to the question: “Can a small internal team be as effective as an external partner who will likely have access to a higher volume of staff?”, HYDP writes: “It's vital that if you build an internal team, they're motivated and incentivised to continually learn and develop, exploring and absorbing as much external knowledge as possible.

“Without this, your competitors (who use external partners) may devise and deploy better strategic and creative outputs as they pull from innovative cross-industry knowledge. Over time these small losses can lead to significant shortfalls.”

There are obvious benefits to having an internal team that “will live and breathe your brand” and has “a real-time connection to the inner workings”, said HYDP, finding that out of 30 surveyed content creators, 73% said campaigns ran more smoothly when brand representatives were their main point of contact.

However, the research also found that 40% of creators have experienced brand representatives “lacking the production experience, audience knowledge and platform foresight to contextualise creative requests”, often “because brand representatives struggled to see the flaws in the brand's creative direction and/or strategy”.

It warns if brands want to create successful influencer campaigns with an internal team, they must first “take a step back and seriously consider if your brand is an attractive place for the creator economy's top talent to work”.

Additional benefits

HYDP suggests the closer relationship built by creator-brand integration can also help businesses more broadly, as they may use creator expertise in content production for their brand’s own social channels, as well as consulting their knowledge on current trends to inform strategic and creative brand decisions.

The Lost Billions report concludes: “It’s important to view creators as more than social media billboards or add-ons to campaigns. Developing and implementing a robust strategic plan to integrate creators into your business will not only make your relationships with creators more financially efficient but also help drive your brand forward.”


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