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Welcome To Commerce 3.0, The Social Kind

When it comes to a social media platform’s life cycle, the major apps are coming into their “ecommerce stage.” 

After years (or in Threads’ case, months) of building maximum engagement and erecting teeming advertising businesses, social-media apps are investing in further monetizing via commerce. 

Just as Pierre Omidyar and Jeff Bezos brought commerce to the internet with eBay and Amazon, respectively, we have seen Meta launch Facebook Marketplace, and this past year, TikTok Shop’s U.S. program hit $100 billion in sales in a single day, inspiring other platforms like YouTube, Pinterest and Instagram to follow suit.

So here’s the question: how can marketers make the most of the budding age of social commerce? 

According to Scott Sutton, CEO of Later -- a company that manages social media and influencer campaigns where creators receive commissions for posting sponsored content -- marketers' access to a deep well of data is key.

Later, originally a social-media scheduling software known as “Latergram,” was born out of the idea that the future of marketing would be centered around the creator and the audience. And, given the way the industry is moving, their focus was an advantageous one.

Recently, Later acquired influencer platform Mavely for $250 million, giving the company access to data derived from a pool of 120,000 more creators who have driven one billion in gross merchandising volume for over 1,400 brands like Nike, Lululemon, Old Navy, adidas and Macy's.

Over the years, Later itself has carried out over three million influencer activations and over 300 million posts.

Now, combined with Mavely's creator base, as well as its sales-tracking technology, which can track the sales of specific products from individual campaigns, Later is building out a data-driven understanding of what creator strategies work best on social media.

According to Sutton, creators have the unique ability to deeply resonate with consumers, and as their presence has grown across social platforms, Later has found that “more marketers want provable ROI.”

“They want data and the ability to target their message and their outcome,” Sutton tells MediaPost.

By analyzing consumers’ cart makeup and attributing individual posts to outcomes, Sutton says Later can fine-tune marketers' outcomes, whether it's brand awareness, conversion or ROAs.

Sutton likens marketers’ growing need for data in the creator economy to the natural life-cycle of the media industry, in which every channel -- newspapers, magazines, cable TV, digital media -- started out as fruitful spaces for marketers but as they became more crowded, they demanded the need for enhanced measurement and targeting tactics.

The future of the creator economy, according to Sutton, is performance centered. “It's not just hiring celebrities to make a splash, it’s engaging with creators and their audiences to drive outcomes in a really meaningful way.”

With commerce becoming more intertwined with the social media landscape, and more “everyday influencers” -- creators who have smaller, more niche followings -- brands have new opportunities to target a specific audience with influencer messaging.

However, this involves sifting through a plethora of possible creators. That’s where relevant data becomes essential. 

“Part of what we're trying to understand is which creators are good at using their content to drive which kinds of outcomes,” says Sutton. 

With a whole new generation of commerce-centered creators adept at driving product sales in a trustworthy way -- in a way that makes consumers feel good about the interaction -- marketers have the ability to spend the same amount of money on utilizing a diverse group of creators across a hyper-focused targeting campaign, compared to one expensive celebrity-based campaign with wider, less specific consumer reach.

“If I hire 60 creators, I can be hyper-focused in my Northern Nebraska soccer moms, or in kite surfers from Hood River, Oregon, or snowboarders from Park City,” Sutton explains. “Whatever my niche is, I can very narrowly market to them, and so my return on investment is high, whereas a lot of celebrities have a loose affiliation, and it's not as resonant."

In other words, in social media's ecommerce era, ROI comes down to diversity of content, the effectiveness of ad dollars, how far they go, and marketers' ability to effectively target their audiences.

Sutton makes a point in telling MediaPost that while data is not Later's product, data, paired with AI, is the heart of what the company is using to fuel desired outcomes for marketers.

At the end of the day, the CEO believes that those who deeply understand performance will be the ones “who can take the most sophisticated AI tools with the richest data sets and turn them into the most effective outcomes for creators and marketers.”

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