Jenny Chan 陳詠欣
Apr 18, 2019

Brands are relying less on agencies to manage KOLs in China

R3 whitepaper finds marketers in China can no longer only rely on agencies to select and launch KOL campaigns.

Brands are relying less on agencies to manage KOLs in China

Fragmentation of social media in China has led to concerns and challenges in the everyday management of KOL collaborations. A lack of consistency in standards has also caused unreliable methods of campaign evaluation, affecting two-thirds (AdMaster data) of Chinese marketers who are investing in influencers, vloggers and KOLs.

Thus, marketers can no longer rely solely on agencies to select and launch KOL campaigns, according to a recent white paper on KOL market practices in China, where R3 reviewed the roles that KOL search engines and multichannel networks (MCNs) play in the process of dealing with KOLs.

Since 2016, the increasing demand for KOL marketing, spurred by the average person spending half their day consuming digital media, has contributed to the rapid expansion of MCNs and KOL search engines.

Intensifying competition between different service providers means marketers will need to work with multiple parties to achieve optimisation.

Of all the service providers, agencies have the best ability to offer consumer insights and competitive rates, said Carrie Zheng, lead consultant at R3 China. On the flip side, KOL communication processes at agencies can take considerable time. It is harder to identify a suitable all-in-one media planning and purchasing agency, and when marketers prefer to separate those functions, agencies unfortunately suffer from unclear divisions of accountability.

Simply relying on agencies will diminish the ROI for marketers and put them at risk of losing their competitive edge. Zheng said marketers can consider more direct partnerships with KOLs as an option.
 
This arrangement works well in a cooperative structure where a KOL participates in content or product development. A two-way relationship offers KOLs the opportunity to better understand the needs of marketers; it also provides marketers greater control and flexibility. If marketers opt for this, they must be prepared to dedicate enough time for KOL management and expect low price transparency, advised Zheng.

If their focus is price transparency, partnerships through a KOL search engine may ensure that. Apart from supplying access to a data pool of KOLs at different price tiers, these search engines mainly function as monitoring systems with algorithms to help with choice, Zheng observed.

However, a lack of top-tier KOLs should be anticipated as most resources available on such search engines are independent, grassroots KOLs with medium to small followings.

MCNs are also involved in contracting independent KOLs, as a third-party liaison between them and marketers. Commercially, they fill the roles of a professional celebrity-type agent and a content developer.

For KOLs, MCNs furnish stable business opportunities. Simultaneously, for marketers, MCNs are more reliable in terms of results. There is a price to pay, of course, at a markup for quality KOLs, pointed out Zheng.

That said, overall digital marketing budgets are moving towards social media platforms themselves. Fast development in AI and lower financial risk form a solid basis for platforms to partially replace MCNs, according to R3, predicting that platforms will work closer with marketers by offering exclusive (but costly) advertising segments that the other three players cannot.

Source:
Campaign China
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