Refluenced scales and sees influencer marketing at a turning point

m&k: When we first started 18 months ago have talked about Refluencedyou were still a young start-up with a clear vision. What has changed since then?

The market has evolved rapidly - and we have evolved with it. The creator economy is no longer a niche market, but an integral part of modern marketing strategies. We have not only sharpened our business model, but also our platform to bring brands and creators together even more efficiently. Particularly exciting: scaling to Germany has shown us how differently markets work and what levers are needed to grow internationally.

And we have learned that building a sustainable and dominant company is not a sprint, but a marathon - characterized by perseverance and constant adaptation. Our long-term goal is to revolutionize the creator economy and create a market comparable to Spotify's transformation of the music industry, Uber's transformation of the transportation sector or Canva's reshaping of content creation.

 

You have now placed over CHF 1 million in product value with influencers. What does this milestone mean for you - and how does it change your position in the market? 

We brokered CHF 1.7 million in product value and paid out over CHF 230,000 in cash to our nano- and micro-influencers - in collaboration with our clients. In total, we were able to connect more than 10,000 influencers with companies. This success shows that we are meeting an urgent need on the part of both influencers and companies and are actively contributing to the positive development of the still young creator economy.

 

You deliberately gave up your majority on the Board of Directors and brought in external experts. What prompted you to take this step? Were there moments when you thought: "I wish we hadn't done that"?

It was essential for us to bring experienced experts on board who can help us with their know-how. The Board of Directors offers us precisely this opportunity to accelerate our growth and gain valuable impetus. There has never been a moment when we have regretted this step - our Board of Directors advises us comprehensively and gives us a lot of freedom without predefining our strategic decisions.

 

You were at Creator Economy Live in Las Vegas - what was the most surprising insight you took away with you?

We have established that the social media market will not revolve around one dominant provider in the future. Instead, there will be a large number of specialized apps that serve different needs and niches. Users will use several platforms in the future - depending on what content or functions they are looking for. One example is LTK, an up-and-coming shopping app that influencers use to present and sell their favorite products. The company has received 300 million in investment in 2021.

 

The US market is considered a pioneer. Where do you see the biggest difference compared to Europe - especially in terms of performance metrics and budgets?

Significantly higher budgets are used in the USA - due to the larger market capacity and higher appreciation as well as the higher costs of advertising. Even if the campaign objectives vary, the focus everywhere is on impact: if there are no quick results, the campaign is switched.

 

Influencer prices, sales performance, company key figures - the call for transparency is getting louder. What does this mean in concrete terms for platforms like yours?

The market is still fragmented - almost like the Wild West. For us as a platform, however, this offers a great opportunity, as we have extensive data that we can use to bring influencers and companies together transparently in one marketplace and support them.

 

Many brands rely on AI-supported tools for matching, communication and reporting. Will the human instinct for the right creator-brand fit eventually become superfluous?

AI can process far more data than a human being - which is why we see great potential in its use. Nevertheless, there are situations that cannot be predicted from data alone; here, human intuition remains indispensable. In many cases, AI will provide us with valuable support and enable us to make well-founded decisions, but human input will continue to be crucial for particularly important decisions.

 

You often talk about the trend from macro to micro - what advantages do smaller creators have over the big stars?

The keyword is "authenticity". Smaller creators have the advantage that they are often closer to their followers - creating a digital word-of-mouth effect. They also make up the majority of active users and can therefore have an enormous influence. There are also many other advantages of smaller influencers.

 

If TikTok loses market share, which platform will benefit the most?

Should TikTok be banned in the US, we see Instagram as the main winner, followed by YouTube Shorts and lastly Snapchat - although opinions differ here.

 

The creator economy is a market worth billions, but there is no dominant platform. Why has no global standard been able to establish itself so far?

In our opinion, this is because social media platforms often do not work directly with the specialized influencer tools. In addition, the market has long been dominated by large influencers, while additional management structures have led to inefficiencies. Last but not least, the requirements of companies and influencers are so diverse that a standardized solution was difficult to implement - AI will be a great opportunity for this. 

 

Customer lifetime value (CLV) is becoming increasingly important in influencer marketing. How do you ensure that brands work with the right influencers who will have a long-term impact?

The key question is: what makes the right influencer? Is it high-quality content, reaching a local target group, maximum reach or the direct sales effect? We use algorithms based on extensive data from influencers and companies to develop a scoring system that determines the optimal fit. We also use AI to promote long-term collaborations and build a strong ambassador network. We want to roll out these functions soon.

 

In your collaboration with Milano Vice, you reduced the cost per purchase by 47 percent. What were the most important success factors of this campaign?

The key to the success of the Milano Vice campaign was the cooperation with a large number of smaller creators who created a wide range of content. This content was reinforced by targeted partnership ads that were played out on behalf of the creator. This native type of advertising made the campaign appear much more authentic and less intrusive, which led to a significant 47% reduction in cost per purchase.

 

You see yourselves not only as an influencer platform, but also as a content management tool. Where do you see yourselves in comparison to traditional social media tools?

User-generated content is becoming increasingly important. Our platform enables companies to source high-quality content directly from creators and distribute it seamlessly via their own channels. This method is not only extremely cost-efficient, but also ensures that up-to-date, trendy content is always in use.

 

Keyword paid media & performance boosts: How do you combine organic content with targeted advertising?

We have integrated a function directly into our platform that makes it possible to distribute the organically created influencer content via paid media with so-called partnership ad codes. This function eliminates the need for additional interaction with the creator and guarantees the company maximum flexibility. The content is played out in the name of the respective creator - as shown in the example above with Milano Vice. 

 

Which platform is currently the most exciting for influencer marketing for your customers: Instagram, TikTok, Pinterest or LinkedIn?

From a monetary perspective, Instagram dominates, but we also see enormous potential in TikTok. In the near future, we plan to offer YouTube Shorts - possibly also Snapchat Spotlight, if demand increases accordingly.

 

You rely heavily on nano- and micro-influencers - is this a long-term trend or will big names be in demand again at some point?

We are convinced that the trend towards nano- and micro-influencers will continue in the long term and complement the big influencers. While in the past the focus was often only on the big names, companies are now also recognizing the added value of smaller creators - a trend that will continue in the long term.

 

There is a special twist in your business: influencers are not remunerated with money, but with products. Why does this work so well?

In the beginning, we mainly remunerated influencers with products. We now also offer cash compensation and have already paid out over CHF 230,000 to our creators - a trend that continues to grow. Our goal is to pave the way for creators to have an independent content career and to be able to grow on Refluenced. 

 

Many start-ups experience phases in which the account balance comes perilously close to zero. How did you get through the critical financing round?

As a start-up, we strive for rapid growth and make high investments, which puts a considerable strain on the account balance. If unexpected costs arise or the ambitious sales target is not achieved, liquidity bottlenecks can quickly arise. Even large scale-ups repeatedly experience phases in which rising fixed costs become a financial challenge - you are always living at the limit, so to speak.

 

A point that you often emphasize: experience is not decisive, attitude is. Why is that the case?

The importance of experience varies depending on the development phase of a start-up. In the early phase, attitude and drive are the most important factors, while experience becomes increasingly important as professionalization progresses - as we have experienced.

 

You've talked a lot about networking and how it has helped you move forward. Is there an encounter that changed everything for Refluenced?

The decisive impetus often came from individual contacts - be it in the acquisition of investors, expansion into Germany or the recruitment of key team members. These experiences show: As a start-up, you have to actively cultivate your network and not focus exclusively on product development in the basement.

 

You are no longer a classic startup - at what point is a startup no longer a startup?

We still see ourselves as a start-up - because we are based on technology, are building a highly scalable product and have the potential to change the market in the long term. In the last 18 months, we have taken three decisive steps: raising outside capital, expanding into Germany with the opening of an office in Berlin and the targeted recruitment of new employees. So far, these bold decisions have paid off in full.