RxBar's "new" strategy: influencers as an agency

In article published yesterday in Digiday, RxBar describes their new influencer strategy that involves partnering with social media influencers to promote new limited flavors of its protein bars. Their first partner is CrossFit influencer, Cole Sager, who is now promoting a limited-edition hot chocolate flavor to his 267k followers on Instagram.

According to RxBar, what's different about this strategy compared to a normal influencer campaign is that RxBar wants to leverage influencers as an agency, giving the influencer 100% control over (and responsibility for) the creatives and placement to sell the new flavors. In return, the influencer receives a portion from each sale, just as an affiliate would, in addition to an undisclosed base fee.

RxBar's strategy sounds like a hybrid between influencer and affiliate models, and so far I'm not convinced that this type of model will work. On the surface it sounds like a great idea, since there is a relatively low up front cost for the brand, the influencers give the brand a lot of reach, and the bulk of payment to the influencer is on a CPA basis. Normally, based on what we learned in class, CPA-based marketing channels usually have low quantity/low quality reach because the risk to advertisers is high. I don't see RxBar's new hybrid approach as innovative enough to overturn this logic.

Firstly, influencer traffic is usually top-of-funnel and is difficult to convert directly without a corresponding paid/content strategy. This is especially so on a platform like Instagram, where influencer posts are transient and quickly buried under a nonstop stream of new posts. Secondly, the incentives for the influencer are not the same as a typical brand's marketing team or agency. Whereas brands and agencies want to generate as many sales as possible at the lowest cost, good influencers prioritize authenticity and must not over sell, or they risk being seen by their followers as "selling out". Therefore, I think that the most likely outcome is that RxBar's partnership with Cole will fail to meet expectations, both on the side of the brand as well as the influencer.

That said, one interesting part about RxBar's strategy is how it addresses attribution issues when it comes to influencers. Rather than guess at click-through and conversion rates based on Instagram profile link clicks, RxBar seems to be assigning each big influencer with a specific "limited" flavor to promote. This capability is somewhat unique to RxBar, which can formulate new flavors relatively quickly and afford the corresponding inventory risk.