By Nat Ives 

One year after Unilever PLC warned that fraud was undermining influencer marketing, the company is buying a stake in a software company that helps marketers manage influencers.

The investment is largely an effort to better understand influencer marketing, which Unilever continues to use on a large scale, according to the company.

Unilever criticizes, in other words, because it cares.

"We very much love working with influencers because, as you know, they're very influential in driving consumer opinion," said Vasiliki Petrou, executive vice president at Unilever and group chief executive at Unilever Prestige, which comprises brands including Dermalogica, Living Proof and Kate Somerville.

Brands have increasingly been turning to so-called influencers -- people with some level of social-media following -- to help them reach consumers in social media.

But many influencers have been caught buying followers or using bots and accomplices to make their posts look more engaging. Unilever, the maker of Dove soap and Axe body spray, last summer complained about poor transparency, a lack of accountability and fraud in influencer marketing.

"At best it's misleading, at worst it's corrupt," Unilever marketing chief Keith Weed said last June, as he prepared to call out the problems at the Cannes ad festival, the marketing industry's most prominent gathering.

Mr. Weed also called for social-media platforms to do more to help fight problems with influencers. "Some platforms already do things in this area, but they have to do it at a larger scale and with more transparency, so the industry can be reassured that the influencers on their platforms are not using these practices," he said. (Mr. Weed retired last month.)

The company promised not to work with influencers caught inflating their impact. But it never backed away from using influencers as a strategy.

Now Unilever Ventures and TVC Capital have led a $12 million Series B investment in SocialEdge Inc., doing business as CreatorIQ. The startup's Enterprise Creator Cloud platform is designed to help advertisers find influencers, manage their work and measure the results.

It is the first move into the sector for Unilever's venture-capital and private-equity unit, whose portfolio includes skincare brand True Botanicals, daily-delivery service Milkbasket and ad-targeting firm Blis.

Unilever wanted to better grasp the tools and techniques at play in influencer marketing, said Luis Di Como, executive vice president for global media at Unilever. CreatorIQ also provides services in the detection of fraud, he added. "And if there is a financial return, there will be an added value," he said.

Nano-influencers and Advocates

Unilever already uses CreatorIQ, among other tools, to help handle proliferating influencer relationships. Its executives believe consumers listen to influencers in a way they no longer do to marketers speaking for themselves.

Ms. Petrou's Prestige group is complementing traditional influencers with people who have smaller followings -- dubbed micro- and nano-influencers -- and expanding its roster of influencers in the process. "The micro-influencers sometimes have a very engaged audience," Ms. Petrou said.

Other marketers are also adding to their ranks of influencers.

Calvin Klein works with hundreds of influencers at any given time, according to Marie Gulin-Merle, chief marketing officer at Calvin Klein Inc. and chief digital officer at Calvin Klein parent PVH Corp., saying the brand employed more than 350 to promote its Instagram-friendly pop-up house at Coachella this year.

This year Calvin Klein is also monitoring social media to find fans who might help amplify its messages without being paid, Ms. Gulin-Merle said in an email. It plans to enlist some 3,000 advocates this year and have 7,500 up and running by next year, she said.

"We generally think that the usual 0.2% top-tier influencers are a limited and sometimes saturated pool, and that we really need to talk to the 2% of our consumer base that are brand advocates and sometimes micro- or nano-influencers," Ms. Gulin-Merle said.

Calvin Klein uses a mix of tech platforms and agencies to manage its influencer campaigns, and works directly with the advocates it is recruiting. It isn't a CreatorIQ client.

The new funding round values CreatorIQ at $40 million to $50 million, roughly four times its previous valuation, people familiar with the deal said. The company plans to use the money to pull in additional measurement and data, pursue further growth and double staff this year to about 160 people.

Unilever says the influencer ecosystem has improved since its call for action last year.

Platforms such as Twitter and Instagram say they have deactivated millions of fake followers over the last year in an attempt to restore trust in the counts.

Write to Nat Ives at nat.ives@wsj.com

 

(END) Dow Jones Newswires

June 11, 2019 13:57 ET (17:57 GMT)

Copyright (c) 2019 Dow Jones & Company, Inc.
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