Future of Marketing Briefing: Agency fees in creator deals are the next transparency headache for marketers

William Bradley, a senior director at Responsible Marketing Advisory, saw it first-hand recently when trade body the Incorporated Society of British Advertisers asked the consultancy to build a framework for managing creator work. Before the workshop, he polled the members of the organization’s media leaders group and creator forum on how transparent their creator agency fees were. Just 42% said fully. Another 21% said partially, and 37% said they were unsure.  

“Its outgrown governance,” was how Bradley framed the findings.

Then again, it always does. Creator costs are the latest in a long line of agency fees marketers can’t quite account for. Marketing management consultant TrinityP3 argued a bundled creator deal can leave as little as 35% of the budget for talent against as much as 60% when the same work is billed line by line. The Association of National Advertisers’ figures from earlier this year are softer but point the same way: agencies take 30% of influencer spend on average and only 39% of agreements are transparent to the marketer.

“What marketers are doing is they’re trading convenience and ease for a fee,” said Darren Woolley, founder and global CEO at TrinityP3. “Now that’s fine as long as you know what the fee is and are able to justify it.”

Often they can’t. Most hand over a lump sum and leave the agency to carve it up, which made sense once brands moved from a handful of big-name influencers to rosters of 20, 50, sometimes hundreds of them. Few marketing teams have the people to run that many relationships, so agencies took it on, first as a sideline and then, as budgets grew, through dedicated creators units the big groups built inside their networks. Each step puts another layer between the brand and the creator, and each layer can take a cut. Wooley said the extra margin tends to sit in management fees and technology pass-through costs that tend to go through the agency. 

Tim Mitchell, co-founder of DRPCRD, a creator content platform built specifically for agencies, has seen it happen inside a big holding company, where creators went onto a media plan as a single line item. The client got one number for a batch of content, sometimes with guaranteed views thrown in, and left the agency to hit whatever objectives it chose. The agency fee, the creator fee, the tech fee and any paid dollars to boost the content all went in together. 

“Good agencies will manage that effectively, bad ones will take as much of that budget for themselves at the expense of results (and creators),” said Mitchell. 

Which kind you’ve hired is, conveniently, the question consultants are queuing up to answer for a fee. One audit firm said it already checks how creator budgets are split between talent fees, agency mark-ups, production, usage rights and paid amplification, as part of wider reviews of agency commercial models. Creator marketing isn’t a specialization in its own right, they added, which said something about how far behind the scrutiny still is.

That it’s happening at all says more about what marketers don’t know about creator marketing than about agencies hunting for margin. Many still don’t know how to plan for it, so creator work lands on the media plan as a single number covering the agency fee, the creators, the tech and any paid boosting. The marketer sees one figure for a batch of content and moves on, and whatever the agency takes out stays inside it. Scattered budgets make that harder to catch. When PR, e-commerce and paid media teams each buy creators on their own, nobody on the brand side sees the full bill. Even brands that do see it struggle to say what it bought since few can connect a creator post to a sale. Without that understanding there’s no way to judge whether any agency’s cut, large or small, is earning its keep. 

“A creator fee can be different because it can be buying creative, talent, distribution, IP audience access and usage rights at the same time, while the third party may be adding value through selection, negotiation and management,” said Entropy Consulting’s founder, Alex Tait, who set up Unilever’s pilot influencer program. “Marketers should absolutely know where every pound went, but the ultimate transparency is knowing both where the money went and what incremental value the whole investment produced.”

It’s too early to say how this will ultimately shake out, and a transparency crisis on the scale of the last ones is still some ways away. The rhetoric is starting to sound familiar, though, and marketers are working out what they don’t know. You can hear it in how they talk about creators. A couple of years ago the language was “authenticity” and “test and learn”. Now it’s “control” and “value”, with a lot more talk of measurement. Marketers reached for the same words when agency rebates came to light, and again when programmatic grew too big to keep buying on trust.

“You won’t get a bigger advocate than me of transparency in paid media,” said Tait. “But I’d be wary of simply importing the same definition into creator marketing. You could argue paid media is more of an inventory transaction: you want to know what the inventory cost and what every intermediary took along the way.”

Diageo’s Martha’s Vineyard push doubled as a creator recruiting drive

Diageo showed up on Martha’s Vineyard this summer with more than 11 brands across 35 activations, for what was its first portfolio push around the island’s festival. Jazmine Settles, senior manager, brands in culture at Diageo, explained why the company went in as a group, how it judges whether a cultural moment is worth the money and what the trip did for its creator pipeline.

What triggered the move from a brand-by-brand approach to a portfolio one?

Even though some of our brands have been there before, there’s been more attention on the vineyard for the last couple of years. We also have a partner we work with at Diageo — Kellie Pean, co-founder and CEO of Brand New: A Collective, who created a week of activities. It was their first year. They took over one of the biggest hotels on the vineyard for a residency and created a hospitality platform, and we were their beverage partner. It was a series of wellness events, nightlife and panels. Since that opportunity was presented to us, we thought we might as well as see what else was going on. From there, we found a few other opportunities. 

Does the event open doors with creators and talent?

Being in those rooms allows us more access to influencers and creators, and to have them adjacent to our brands. Part of how we build out sponsorships is ensuring the right people are there, not just the consumer but the talent. We get the images, impressions and views and it gets picked up by the media.

I’m also there on site meeting creators who want to work with Diageo, or maybe aren’t aware that we put a lot of effort into responsible drinking and have non-alcoholic brands like Seedlip and Ritual. I met a lot of creators who said “I would love to work with you guys but I don’t drink” or “I just want to drink less.” We have those opportunities as well. Everybody knows Don Julio or Johnnie Walker but showing the breadth of the portfolio is pretty beneficial for us.

So its a recruiting ground for creators as well as a way to reach shoppers?

100%. Now people know Diageo is on the vineyard and supporting the community and its events. I’ve already gotten so many emails and DMs. By the time next year rolls around, there will be creators reaching out to us proactively for deals or just to be invited to things, which is really helpful.

Authenticity has become a malleable word in marketing. What does it mean to you now?

It does sometimes come across as a buzzword. But as an individual, authenticity means a lot of different things to me, especially as it pertains to culture, and Black culture at that. Being a Black woman in marketing, I’m responsible for knowing my culture but also those of those consumers we’re looking to market to. So authenticity to me, regardless of the consumer, means making sure we’re showing up with the right people and the right partners, in a way that feels organic and comfortable for everyone. 

Is that harder now when every brand seems one reaction away from a reputational crisis?

I wouldn’t say it’s harder. I’ve worked in PR over the course of my career for maybe a decade, and there are always sensitivities. Maybe things are a little more sensitive now. But it’s really important to live your values, first yourself morally right, and make sure your decision-making is based on who you are and the things you feel comfortable representing. We also work for really big companies so we have internal conversations to make sure we are supporting particular efforts. I just think there’s a lot more to navigate than before. Ensuring that you’re leading with best efforts is super important.

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3 million: Total million weekly users that Meta’s Muse has recorded

86%: Percentage of Criteo’s CPG clients that recorded at least one transaction referred by ChatGPT

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