Patron Founder Atsushi Hiratsumi Looks to Revolutionize Influencer Marketing
The influencer marketing model has evolved significantly from the original sponsorship and endorsement paradigm. From simply being paid to appear on advertising and marketing materials in past decades, influencers today help give a company a more human and less "corporate' touch. The major catalyst for this new wave of influencer marketing was social media. Thanks to massive organic social networks, influencers can better reach like-minded individuals, and companies have a less direct means of reaching consumers.
The status quo works, and it's a vital piece of most companies' marketing strategies. Influencers have a different sort of access to audiences, and their approach to advertising is seen as more authentic. Individuals aren't just sponsors, but true believers in the products they're promoting on their Instagram and Facebook accounts.
Even so, the model is not without its flaws on both sides of the equation. Companies can sometimes choose an incorrect influencer, have difficulties coordinating or encouraging positive behaviors, and more. On the other side, influencers must many times wait to be approached by third parties to start earning money through promotional activities. Because of the difficulties in connecting brands to the best available influencer, many companies turn to third party tools that add steps in the value chain and remove value.
Despite this state of functional stagnation, innovative technologies are constantly emerging that can disrupt the balance to create a better status quo. Blockchain, with its sophisticated decentralized architecture, offers an alternative model for influencer marketing, which connects influencers and brands directly, and allows for a more free-market approach to incentives and payments. Now, new startup Patron, a blockchain-based marketplace for influencers, is looking to change the way the market works and empower individuals to monetize their personalities how they want.
The Broken Status Quo
Influencer marketing isn't completely broken, but the way it works now is increasingly skewed in favor of companies instead of the real earners in the equation—influencers. Undoubtedly, social media and celebrity personalities who are approached by brands do make money from their partnerships, but their role in the process is more passive, and given less agency, than the brands who are looking to tap into individuals' existing networks.
This situation leads to a more mercenary approach to the marketing model, whereby influencers constantly jump from brand to brand who offers them marginally more benefits, and which leads to an increasing inefficiency in conversions and other metrics. The problem is compounded when many of these influencers, due to the constant brand-hopping, begin to lose credibility and status leading to accusations of fake endorsements.
Moreover, the need to find as many influencers as possible means companies have popped up as intermediaries between brands and potential assets. Several agencies now sit between the two, and extract value from the relationship while also reducing its efficacy. Influencers are most effective when they have a true stake in the brand they're promoting, or when they believe in it. This sanitized model means that influence is sold to the highest bidder, leading to reduced authenticity and less of a connection between brands and influencers. Moreover, this tangled dynamic means costs are significantly higher.
Patron's Proposition: Remove the Middlemen
Many of the problems of the current influencer marketing model are inherent in how it was designed. Because it was built by one side of the dynamic primarily for its own benefit, any other positive effects are viewed as collateral. This means that influencers are seen as valuable assets, but not as partners in any campaign. However, the model is built on a system that has recently met its potential match—blockchain.
New entrant Patron has built a platform on blockchain that emphasizes an equitable dynamic thanks to its decentralized nature. The company is working to create a marketplace based on blockchain that connects brands directly with influencers, removing intermediaries in the process. By allowing a peer-to-peer communication, Patron is hoping to solve many of the problems existing in the industry today.
The first is the ability of companies to connect with the right personality for their brand. Currently, influencers must go through gatekeepers to find the right brand, and even then may not be ideologically matched with companies they believe in. With Patron, influencers could register to the application, and brands could instantly find the right one thanks to detailed information and a transparent record of success.
More importantly, influencers regain much of the agency they have lost as they can be paid instantly, without having to forego part of their earnings to businesses who collect as much as 40% of a negotiated fee as commission. Instead, brands and influencers can come to agreements using Ethereum-based smart contracts that are more equitable and secure for both sides of the negotiation.
Finally, Patron and systems like it create an extra layer of incentive for influencers to do their best work, as they are directly benefited and receive real rewards in terms of fungible PAT tokens, which can be exchanged for bitcoin, Ethereum, Litecoin, and other cryptocurrencies, or even for fiat currencies on exchanges.
Changing The Game for the Better
Patron is still in the building phase of their development but are in the process of an ICO to raise the funds needed to finish developing their platform and take it global. The company's hope is to have a worldwide impact on how influencers operate and how brands find the right people to help promote their goods and products. With an initial presale that raised an impressive $10 million, the company is looking to make a big splash, and in the process redefine what an influencer sharing economy truly is.