Business Perspectives
May 2023
Business Perspectives
May 2023
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Connecting Brands with Digital Content Creators

Connecting with online content creators who are passionate about particular brands can be a powerful way for those brands to reach their target audiences. Influencer marketing has become a $16 billion market, with an annual growth rate of 47 percent.1 “Brands that understand how to win with creators are succeeding,” says Bryan Gold, the co-founder and chief executive of #paid, a platform that connects online creators and companies. “Brands like the eyeglass retailer Warby Parker have grown into billion-dollar companies because they understand the value of working with content creators.”

Two men on a couch and behind them the paid logo
#Paid Co-Founders Bryan Gold (left) and Adam Rivietz (right)

Marketing through online influencers is not a new phenomenon. It began with the advent of social media sites like Facebook, YouTube, Twitter and Instagram but platforms like #paid and the rise of mega-personalities like Mr. Beast are changing the game.

When developing traditional print or digital ads, many companies have historically had to work with a creative agency to develop the ads and the same or perhaps another agency to place the ads on various media sites. Platforms like #paid now allow brands, or even an agency, to partner directly with creators to develop and distribute original content directly to the creators’ followers.

“Unlike banner ads, which people often ignore, the content developed by online creators has built-in credibility,” says Bryan. “People have chosen to follow each creator, and they value and trust the content the influencer posts.”

At a time when marketing budgets are under scrutiny and marketers must prove they’re spending every dollar wisely, partnerships with content creators can be [compelling]. “The companies that use #paid routinely find that the campaigns they develop with content creators are much more efficient and cost-effective than traditional advertising,” says Bryan.

#paid has conducted multiple surveys which highlight the effectiveness of creator content relative to traditional media campaigns. As Scott Frederick, a managing partner at Sands Capital Ventures, notes, “When surveyed consumers found #paid’s campaigns with creators to be 2.11 times more credible, 2.10 times more relatable, 2.07 times more realistic, and 1.77 times more authentic than traditional branded ads.” 2

Independent sources also demonstrate the value of using influencers and creators for marketing campaigns. According to a 2022 survey by Oracle and CRM Essentials, 80 percent of consumers have purchased products in response to social media content and only 13 percent discover new products or brands from traditional advertising. Further, 37 percent of consumers trust influencers more than they do brands, and Millennials and Gen Z-ers are twice as likely to trust influencers as Boomers are.3


Carefully Vetting Creators

The practice of marketing through digital creators has been around long enough for some skepticism to have crept in about its effectiveness. “Some companies have worked with influencers, and the only engagement they saw on posts were likes and comments, but those are not meaningful metrics that drive business results,” says Bryan. Additionally, there are now many services that target online personalities with the promise they can help them build an audience. “But many of these services are using bots to build that audience, and companies are skeptical about working with influencers that might have a high number of fake followers.”

Bryan believes that #paid has a positive approach that addresses these issues and concerns and enables brands to fully leverage the power of connecting with well-regarded creators.

  • A focus on content creators, not influencers. “Many online influencers are simply out to make a buck,” says Bryan. “They’ll endorse the product of any companies that will hire them, but after they get paid, they often don’t continue to promote the product.”

In contrast, “genuine creators post content about a particular topic because they’re really passionate about it,” says Bryan. “These creators are willing to work with brands in ways that are a natural and authentic extension of who they are,” Bryan explains. “They know if they don’t stay true to themselves and exhibit a high level of integrity, their followers will notice.”

  • Setting minimal standards for engagement. Creators aren’t eligible to sign on with #paid, unless they have at least 5,000 followers on Instagram and an engagement level of at least 1.5 percent on their posts. The latter standard does vary, though, because the threshold for what constitutes good engagement can be different according to the subject matter.

  • Screening for appropriateness. #paid has a proprietary feature called Handraise, whereby creators can volunteer to work with brands that are promoting products in their category. Scott says, “There is also an algorithm that will narrow these volunteers on the basis of whether the demographic, geographic and psychographic makeup of the creator and their followers align with the target audience a company is trying to reach.”

Bryan adds, “Before any names are handed off to a brand, there is a double-check to make sure the creator hasn’t ever posted content that would be misaligned with the brand.” He says, “Companies in certain sectors, like financial services, sometimes want an additional screening, like a background check, and we can provide that, as well.”

  • Delivering meaningful metrics. “We report statistics, like the cost-per-acquisition or engaged users’ propensity to purchase, that are more meaningful drivers of business decisions,” says Bryan. Scott adds, “The automated tools that #paid provides to help brands see the return on investment they get from campaigns with creators are among the reasons why #paid has such high net promotor scores.” Nine out of ten of the brands that work with #paid say they’d recommend the firm to others. Scott adds, “#paid is also experiencing what is known in the retail business as strong ‘same-store sales growth’ because existing clients are often doubling and tripling their use of #paid over the course of a year.”
     

“With over 80,000 creators on its platform, #paid has become one of the largest creator marketplaces in the world,” says Scott. “Bryan and his team are enabling brands to develop high-quality campaigns at what we see as a fraction of the cost of traditional advertising. That is one of the reasons why a number of advertising agencies have become direct clients of #paid.”

Enabling Creators to Thrive

The care that the #paid team takes in scrutinizing creators not only helps brands. It also can benefit the creators who have been able to develop meaningful and rewarding partnerships with companies. There are now 80,000 creators and 250 brands on #paid. “In the past three months alone, we have paid out $2.9 million to hundreds of creators,” says Bryan. “We’re enabling creators to make a living by covering topics they love and inspiring their audiences.”

As Scott notes, “#paid was the highest-rated influencer marketing platform on G2 Crowd in 2022 [a site that offers peer-to-peer reviews of software applications].” He adds, “Simply put, creators and brands love #paid.”

A Flexible Development Process

Brands can engage with creators in a variety of ways when using #paid. They can, for example, commission the creator to develop a piece highlighting one of their products, or they can engage with their customers using #paid’s Creator Licensing Tool that provides brands with access to a creator’s social media profile. “People don’t want to be spoken to by brands, and they usually scroll right by the ads from brands that appear in their social media feeds,” says Bryan. “They do respond, though, to a post from someone they follow, letting them know they’ve had a great experience using a particular product.” The Creator Licensing Tool enables brands to directly generate that content.

In addition to connecting brands with creators, #paid can also deliver the information that will determine the optimal locations to place ads. “Pinterest, as an example, is a great site for an evergreen campaign because new users will click on content for months after it was originally posted,” says Bryan. “Instagram stories, though, are generally only up for 24 hours and then disappear. That might serve another purpose, like driving traffic to, or generating interest in, a one-day event.”

Delivering Compelling Success Stories

The solutions that #paid offers are enabling brands to benefit from the affinity followers have with creators they admire. As Bryan says, “When companies work collaboratively with creators, that affinity can be shared with brands.”

Insights gained from campaigns developed with creators often inform the advertising that brands do across all platforms. “A campaign that we did with Nivea showed that the bedroom was the best location for people to be shown using moisturizing cream,” says Bryan. “When people were seen applying the same products in their kitchen or outside, the content wasn’t as effective. That was an insight Nivea used across other media, including traditional ads.”

Sands Capital Lending Key Support

In 2021, Sands Capital was the lead investor in #paid’s Series B round of financing. The two firms have formed a close working relationship. “Scott has been a valuable partner, sharing insights on large strategic issues as well as operational best-practices that can make a big difference for our business,” says Bryan. “The team at Sands Capital has also introduced us to C-Level executives and decision makers that have turned into customers. It is hard to find a

more concrete example of value-add than that,” says Bryan. 

Scott Frederick
Managing Partner, Scott Frederick

Scott says, “Bryan and I talk just about every week. We share a mutual interest in productivity hacks and optimizing human performance, so our discussions go well beyond the traditional CEO/board member dynamic. And I love that. I believe it makes us both better at our jobs, and it can give Bryan the opportunity to stay focused on his ‘North Star,’ which is doing right by creators. I believe Bryan is a great representative for creators because he’s able to put himself in their shoes and design differentiating features for the #paid platform that creators want. The Handraise functionality is a great example of this. If #paid can continue to establish itself as an effective platform for the creator community, the company’s future could be very bright.”

Bryan says focusing on customers’ needs is key to the culture that he has worked to create at #paid. “It’s easy to get consumed with solving problems that only serve internal company needs,” he says. “But Scott helps keep me focused on adding value to the brands and creators who work with us. If we do that then everything else usually works itself out.” It’s a credo that has enabled #paid to build its brand.

1 “Influencer Marketing vs. Traditional Marketing [Full Comparison],” Digital Marketers World, 8/1/22, citing statista data
2 #paid Meta-Analysis of Brand Lift Results. General Population US & Canada (n=2,000)
3 “37% of Consumers Trust Social Media Influencers Over Brands,” CISION, PR Newswire, 5,3/22


Disclosures:
As of May 30, 2023, #paid was held in the Global Ventures III strategy.


Warby Parker, Facebook, YouTube, Twitter, Pinterest, Nivea and Instagram are not held in any Sands Capital portfolio and were referenced for illustrative purposes only.


This communication is for informational purposes only and does not constitute an offer, invitation, or recommendation to buy, sell, subscribe for, or issue any securities. The material is based on information that we consider correct, and any estimates, opinions, conclusions, or recommendations contained in this communication are reasonably held or made at the time of compilation. However, no warranty is made as to the accuracy or reliability of any estimates, opinions, conclusions, or recommendations. It should not be construed as investment, legal, or tax advice and may not be reproduced or distributed to any person.

The series, Partners for Growth, features profiles of founders of portfolio companies that represent a subset of Sands Capital holdings and are meant to illustrate the types of businesses in which we typically invest before they make an initial public offering. The series uses rotation whereby companies are selected to highlight different sectors and growth industries. The founders featured in this series agreed to participate and have approved their stories prior to publishing. Compensation was not provided to participants; however, Bryan Gold can reuse the content with Sands Capital’s permission. Usage rights to the content featured are as of May 30, 2023, and is subject to change.


As of May 30, 2023, Global Ventures III owned 12.5 percent of #paid, having invested in the Series B funding round. Mr. Gold has no other relationships or affiliations with Sands Capital and does not invest in its public or private strategies.

The endorsement provided reflects Bryan Gold’s personal experience and may not be representative of the experience of others and is not a guarantee of future performance or success. Sands Capital has a relationship with Bryan Gold via investment with #paid. Mr. Gold has no other relationships or affiliations with Sands Capital and does not invest in its public or private strategies.


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