The transactional 'pay-per-post' model of influencer marketing is losing its effectiveness, and forward-thinking brands are responding by treating creators as long-term business partners — integrating equity, royalties and revenue-share models into their deal structures.

The market for top-tier creators has become intensely crowded as the creator economy matures. Even with rising budgets, marketers risk losing creators to direct competitors, which threatens both effectiveness — building distinctive brand associations — and efficiency, delivering returns at a decent ROI.

The distinctiveness problem is acute in crowded categories. A successful new parent creator can expect every nappy brand to get in touch at some point, and multiple brands jumping onto the same creator voice make it harder to cut through the rest of the sector. Paying high, standard fees for fleeting, transactional impressions also drives high churn among a narrow creator set, with limited defensibility against competitor bids.

Escalating competition for top talent and rising customer acquisition costs compound the pressure. Demand is outpacing the size of the creator pool affiliated to any particular category, so that new parent creator can charge a higher CPM for the same effort — putting ROI under strain.

Two routes: wide or deep

Brands have two options to solve the competition problem. The first is going wide: expanding the breadth of selected creators to those outside the category, using unexpected influencers from different verticals. This increases the chances of being remembered by building lateral associations that cement the core brand idea.

The second is going deep: increasing the commitment to and longevity of partnerships with specific creators, so the relationship becomes more than transactional.

Research published by the IPA last October found influencer marketing's long-term ROI multiplier is ahead of any channel — which makes a case for activating it over the long term rather than in bursts.

The performance evidence supports this shift. In one ambassador programme, creators at Billion Dollar Boy over-delivered by 34%, adding significant content value and driving an additional 1.2 million organic views.

From media channel to shareholder

Leading brands are moving away from treating creators as media channels. Beyond exclusivity arrangements, some now integrate equity, royalties and revenue-share models into deal structures. These align incentives toward long-term brand building rather than short-term vanity metrics such as clicks or engagements.

The audience effect matters too. When creators shift from paid spokespeople to shareholders, their followers perceive the endorsement as genuine commitment rather than just another sponsored post.

The model has already produced outsized results. Creator Alix Earle took an early equity stake in prebiotic soda brand Poppi and supported the company through organic TikTok pushes, Coachella activations and Super Bowl moments. That long-term alignment paid off when PepsiCo acquired Poppi for nearly $2bn (£1.5bn).

New infrastructure is emerging to support the shift. Creator ownership platform OWM is being built explicitly to match creators with brands based on equity deals rather than one-off fees — moving influencer marketing onto the cap table.

Creator-led brands reshape the market

Creators are also taking matters into their own hands. Billion Dollar Boy research in October 2024 found 88% of creators had already launched a product or service, and 65% of consumers were buying creator-founded products and services.

The rise of creator packaged goods has produced mixed results in recent years — from KSI and Logan Paul's Prime to Mr Beast's Feastables and Top of the Mornin' Coffee by gaming creator Jacksepticeye.

Some brands remain resistant. Influencer Steph Elswood faced pushback from her own traditional brand deals when she founded non-alcoholic spirit company Carouse. She shifted toward negotiating royalty and equity deals, pairing her storytelling and community insights with the distribution scale of established brands.

Rather than treating fast-growing creator brands as a direct threat to heritage brands, there is a collaboration opportunity through royalties and co-creation — fusing a creator's cultural relevance with a legacy brand's scale and supply chain.

Ligia Patrocinio, global head of Desperados at The Heineken Company, advocates this approach. Speaking at The Digital Marketing World Forum in 2024, she said: "Rather than viewing creator-led brands as a threat, savvy brand leaders can recognise the opportunity to leverage their complementary strengths."

The underlying argument is straightforward: treating creators as invested partners for long-term growth is a more sustainable and effective way to build brands than, as the analysis puts it, throwing money into the category bear pit and seeing which creators are willing to bite.

Source: Marketing Week (https://www.marketingweek.com/influencer-equity-over-fees/)