With thousands and sometimes millions of followers, social media influencers are rapidly staking their claim to licensing turf once reserved solely for TV, film, music or sports celebrities.

Yet unlike performers whose popularity tend to soar (or dive) around a new film, TV show, concert tour or championship, influencers have a built-in sense of authority on particular subjects plus constant contact with their fans through YouTube, Snapchat, Instagram, Twitter or other platforms. In terms of moving product and developing brands, they can prove to be celebrities on steroids.

Many entertainment and sports celebrities, of course, are still potent brand builders, and others will undoubtedly succeed going forward. But, says Chris Vaccarino of Fanjoy Co., an ecommerce company that designs and develops limited licensed apparel collections for about 70 influencers, “The engagement with fans is much deeper; everyone feels like the influencer is their best friend,” he says. “The fans have a much deeper understanding of who the influencer is as a person and feel more connected. From that perspective, the fans are much more willing to buy products endorsed by them.”

“Influencers are today’s celebrities for millennials and Generation Z,” says Brand Central Group’s Ross Misher, whose firm represents YouTube star Jake Paul and has previously handled licensing for fashion blogger Emily Schuman of Cupcakes and Cashmere. “Millennials look to lifestyle bloggers for everything from which brands to buy to what to cook for dinner.” And studies have shown that Generation Z are choosing YouTube over traditional TV and cable for daily updates from their favorite influencers, Misher says.

A Greater Influence

Indeed, 18-to-34-year-olds tend to favor social media influencers over traditional celebrities. Of more than 1,200 Millennial and Generation Z consumers surveyed by the research firm Fullscreen and social analytics firm Shareablee, 44% tried an influencer suggestion, compared to 36% for celebrities. And 44% of both groups were more confident in influencers promoting a brand against 35.7% for the brands themselves. And 37% said they would be more likely to trust a brand after an influencer promoted or posted about it.

The results of influencers driving their followers to brick and mortar and online stores can be startling. When YouTuber LaurDIY, aka Lauren Riihimaki, brought her crafting brand to teen- and adult-sized onesies sleepwear and did an in-store appearance at an Ardene department store last December in Canada, the initial supply sold out in two days and “we couldn’t keep up with the online traffic,” says Linda Del Percio of Kersheh, a sleepwear licensee that’s readying a two-piece sleepwear ensemble for launch at the Canadian department store later this month. Ardene also is readying an in-store display for LaurDIY-licensed product for the fall.

Fanjoy started out with a variety of gift boxes (Ariana Grande, My Little Pony and others), but when it signed a deal with Jake Paul and added the bulk of its influencers (David Dobrik, Funk Bros., Wolfie Raps and others) last summer, sales rose from $1.2 million in 2016 to $33 million last year as shipments jumped to 800,000 from 20,000, says Vaccarino.

And Arielle Charnas, who has said she started her blog and Instagram handle Something Navy almost a decade ago to lure back an ex-boyfriend, reportedly sold $1 million worth of merchandise at Nordstrom in 24 hours last September in a cobranded collaboration with the retailer’s private label Treasure & Bond. Nordstrom has since signed a DTR agreement with Charnas for the Something Navy brand which will be applied to a collection of jewelry, apparel and accessories this fall.

The Risk Factor is Familiar

While the benefit of influencers can be a sharp spike in sales, they carry the same risk that traditional celebrities carry: they’re real people. YouTuber Logan Paul (Jake’s brother) faced a backlash late last year after filming and then posting a video of a victim’s body in Aokigahara near Mount Fuji, an area in Japan known as “suicide forest” for the high number of people that have committed suicide there. The video received 6.5 million views within the first day of its posting, but the uproar led YouTube to remove Paul from its top-tier advertising program. Also last year, the YouTube star known as PewDiePie (Felix Arvid Ulf Kjellberg), was dropped by Disney for making jokes about anti-Semitism.

“They are like any other celebrity brand and you want make sure they stick to what their plans are and that they are responsible,” says Brand Liaison’s Laurie Smith. “Much depends on what a YouTuber does on and off line and they need to have a long-term vision.”

That long-term program hinges on influencers’ unique ability to galvanize their followers behind a product and drive them to a store or website, say industry officials. That ability to marshal the collective interest of followers also is something that is being written into contracts. Influencers are commonly being required to make a certain number of posts, tweets, and in-store “meet and greet” appearances as part of their licensing agreements, say industry officials. And how many of these an influencer is required to make can depend on their status as superinfluencers (more than one million followers) or micro-influencers (less than a million but with a rabid fan base) and also the size of the guarantees licensees pay.

“You want to have a minimum amount of social and marketing support and meet and greets; that is all outlined before the ink is dry(on the contract) because you want to make sure it is in line with what the influencer has planned for the year,” says Del Percio.

Staying True to the Brand

At the same time, however, they also must remain true to their brand or risk alienating an extremely loyal fan base. A critical component of that is making sure they promote and use the brand. YouTube gaming personality CaptainSparklez (Jordan Moran) makes trips to retail stores to highlight his licensed toys. Riihimaki was already a fan of adult-size onesies before she signed the agreement with Kersheh and wears them on her YouTube shows.

“The really big piece of the agreement when you are working with an influencer is that there is buy-in on their part in that they will be using the product themselves” because that will provide “a level of authenticity” to their followers, says Plaid Enterprises’ Jon Bogle, whose company is developing LaurDIY stencils and acrylic paints and also has licensing agreements for the Martha Stewart and Waverly brands. “It is important that they not be seen as just using their name and hoping to get a big check out of it.”

Many influencers start with narrow programs to test the value of their brands, says Digital Brand Products’ Daniel Landver, whose firm represents fashion stylist/blogger Chriselle Lim and Charnas. For example, LaurDIY licensed her designs to PopSockets, which makes a knob that attaches to a cellphone to create a handle; thousands of units were sold in the line’s first month last year, laying the groundwork for further expansion, says Smith. Lim, whose blog, The Chriselle Factor, turned into a YouTube channel with 740,000 subscribers, last month launched a ready-to-wear line co-branded with the J.O.A. clothing label online and at 40 Nordstrom stores. And Fanjoy initially built its influencer program around Jake Paul with hoodies and t-shirts and has done the same with the other brands it has added, says Vaccarino.

“We usually start with 3-4 products to see if fans even want to buy something from influencers,” says Vaccarino. “Many times this is the first time they are selling anything, so we don’t want to shove a lot of product down their followers’ throats so as to overwhelm them. We start with a few items, test the market and adjust once we see what their fans are buying.”

The slow building of an influencer brand is part of a strategy to build some staying power that allows it endure over several years rather than months.

“Social media changed everything,” says Denny King of Cousin Corp. of America, which will launch LaurDIY jewelry components, kits, pliers and other products in June. “They all have a voice like we have never seen before and if you aren’t all over it and trying to learn everything you can, you will fall behind.”

Social media’s growing influence is still grounded in some traditional qualities. Bonkers Toys earlier this year unveiled a license to create a “Ryan’s World” toy line based on the Ryan ToysReview YouTube channel, which features a 6-year-old boy opening toys and playing with and reviewing them. The decision to go with Bonkers was partly based on its “strong retail distribution” and ability to bring products to market quickly, says pocket.watch’s Stone Newman, whose company is representing Ryan.

Contacts:

Brand Central Group, Ross Misher, CEO,310-268-1231, ross@brandcentralgroup.com

The Brand Liaison, Laurie Smith, 516-857-3115, laurie@thebrandliaison.com

Cousin Corp. of America, Denny King, Pres., 727-536-3568 x205, dennyking@cousin.com

Digital Brand Products, Lauren Conlon, Licensing Dir.,323-486-9045, lauren@digitalbrandproducts.com

Fanjoy, Chris Vaccarino, CEO, Chris@fanjoy.co

Plaid Enterprises, Jon Bogle, Marketing Dir., 768-291-8152, jbogle@plaidonline.com
Pocket.watch, Stone Newman, Chief Revenue Officer, 917-371-0779, stone@pocketwatch.com

The Kersheh Group, Linda Del Percio, Marketing Mgr., 514-337-4175, ldelpercio@thekershehgroup.com