Disclosure - this blog header image was generated by AI, the article was written by a real person

Before taking influencer marketing in-house, most brands start by working with an agency. This is a logical first step because:

• An agency partner can help prove the business case for influencer marketing.

• Agencies specializing in influencer marketing have in-house expertise.

• Agencies provide resources a brand doesn’t (yet) have for managing influencer discovery and campaign execution. People and technology

Agencies are great partners who can provide tons of leverage when executing influencer marketing campaigns. Influencer discovery, outreach and campaign management takes time. This article dives into why it makes sense to take a hands on role as a brand while in the “agency” phase of influencer marketing. Specifically why it is worth considering managing payments directly. WHY? Marketing teams can reduce costs, increase flexibility and begin to foster stronger, more reliable relationships with influencers and talent management. In this blog post, we'll explore:

• The benefits of building direct influencer relationships

• Why brands should consider having control over influencer payments

• How Lumanu gives control and visibility of payments to brands who partner with agencies (without adding any extra work)

The Benefits of Building Direct Influencer Relationships

“We were working with an agency which was great to get us started but decided we could improve performance and run a more efficient influencer program by taking our influencer marketing in-house. We could build longer term relationships which we believed would result in better performance and that’s exactly what happened”. Director of influencer marketing - Tula skincare

Before transitioning to a full in-house program, many brands take the first step of having direct control over payments and (sometimes) executing contracts. Why?

Enhanced Visibility and Transparency

When brands work through an agency partner, they lose visibility into the details of their influencer partnerships, including payment amounts and schedules. This lack of transparency can lead to misunderstandings and misalignments, as brands may not have a clear picture of how much influencers are being paid or when they are being compensated. By establishing direct relationships with influencers, brands gain full visibility into every aspect of the payment process, ensuring that all parties are on the same page.

Stronger Relationships

Direct relationships with influencers are also essential for fostering trust and loyalty. When brands work through agencies, they may not have the opportunity to establish a direct connection with the influencers who represent their brand. This can be especially problematic when switching agencies, as the brand may lose valuable relationships that have been built over time. By managing payments and interactions directly, brands can cultivate long-term partnerships with influencers, which can lead to more authentic and effective collaborations.

The Importance of Controlling Payments

There is a trend of brands who work with agencies requiring that the brand takes on all payments. Companies ranging from public companies to DTC beauty brands are seeing value in managing influencer payouts. Let’s dive into WHY. 

Timely Payments and Improved Reputation

Late payments are a common issue in influencer marketing, especially when intermediaries are involved. Influencers who are not paid on time may become frustrated and less willing to work with a brand in the future, damaging the brand's reputation in the influencer community. Direct control over payments ensures that influencers are compensated promptly, helping to maintain positive relationships and a strong reputation. This reliability is crucial for attracting and retaining top influencers who can drive the success of your campaigns.

In a recent survey by Lumanu, creators were asked how likely they would be to work with a brand or agency again if they weren’t paid on time. Over 55% of influencers surveyed responded with 4 or above - indicating that they would likely not work with a brand or agency again if they were paid late.

We supported this survey effort with dozens of conversations with IG, Tiktok and YouTube creators and asked the question “do you have a preference of working directly with a brand or through an agency hired by the brand?”. 100% of talent stated that they prefer to work directly with a brand with the primary reason being that they were much more likely to actually receive payment and receive payment on-time.

Lower Cost and No Markups

One advantage of managing influencer payments directly is cost savings. When brands rely on agencies or influencer platforms to handle payments, they often incur additional fees or markups in the range of 10%-30%. These fees add up quickly, especially for larger campaigns. Influencers may be more likely to offer a better rate when dealing directly with brands for payment as there is a perception that payments via agencies can take longer and are more likely to be delayed.

By taking on vendor management and control of payments, brands can effectively pay agencies for the value they bring to the table - campaign strategy and execution while eliminating costs and ensuring that the majority of their campaign budget goes directly to influencers. It takes agencies headcount and time to manage the onboarding and payment process which isn’t adding value when there is an alternative to control payments.

Increased Flexibility and Agility

Control over payments allows brands to be more nimble and responsive to changes. In the dynamic world of influencer marketing, campaigns may need to be adjusted or expanded quickly. When payments are managed internally, brands can easily modify payment schedules, amounts, and terms without the delays or restrictions imposed by third-party platforms or agencies. This flexibility is crucial for maintaining a competitive edge and capitalizing on timely opportunities.

How Lumanu Enhances Control

“Overall Lumanu is a major time saver - it’s reliable. Brands like it and creators like it. Being an influencer marketer, you’re like a salesperson, a relationship manager, a lawyer and an accountant all wrapped up in one. Lumanu makes the end-to-end vendor and payment process easy so I can focus my time on finding new creators, deepening creator relationships and building our broader partnership strategy.” Director of partnerships - Ubeauty

Full Visibility and Direct Control

Lumanu provides brands with the tools they need to take full control of their influencer payments. By using Lumanu, brands can manage payments directly from their own accounts, ensuring complete visibility into every transaction. This level of control not only reduces costs by eliminating third-party fees but also allows brands to make informed decisions about their influencer partnerships.

Streamlined Vendor Management

One of the challenges of managing payments internally is dealing with vendor onboarding and compliance. Lumanu simplifies this process by acting as a single vendor for all influencer payments. This means that brands only need to onboard Lumanu as a vendor, and Lumanu handles the rest, including compliance and tax reporting. This streamlined approach saves time and resources, allowing brands to focus on building and managing their influencer relationships.

Compliance and Security

Lumanu ensures that all payments are compliant with relevant regulations and provides robust security features to protect sensitive information. This includes handling tax compliance and providing detailed reporting, which can be a significant burden for brands managing payments on their own. With Lumanu, brands can rest assured that their payments are not only timely and accurate but also give them the ability to track and audit easily.

Improved Efficiency

Lumanu acts as a master vendor to make it easy for brands to manage payments while giving full control over payouts. Instead of sending an agency a chunk of money and letting them reconcile and manage payouts, direct payments take a step out of the process. By centralizing payment management, Lumanu helps brands ensure payments are made in real time. Lumanu gives brands the ability to invite their agency partners to manage the process while maintaining visibility.

To wrap it up…

Control over payments is an important part of all influencer partnerships. By managing payments directly, brands can reduce costs, increase flexibility, and build stronger relationships with influencers. Direct relationships provide the transparency and trust needed for effective collaborations, while timely payments help maintain a positive reputation in the influencer community. Lumanu enhances this control by providing full visibility, streamlining vendor management, ensuring compliance, and increasing overall efficiency. For brands looking to maximize the impact of their influencer marketing efforts, taking control of payments is not just an option—it's a necessity.