Managing influencer marketing partnerships requires managing processes, relationships and results. To deliver results influencer marketing teams need to focus 99% of efforts on campaign strategy, influencer activations to drive engagement rate and conversions and analyzing results. Supporting content needs across social media and owned channels means partnering with hundreds of influencers across campaigns. As part of the process, each influencer needs to be set up as a vendor, submit invoices for approval and ultimately have the preferred payment method processed by finance. This coordination takes a lot of time. Every minor error in onboarding, invoicing or the payment process leads to delays and requires several emails and days to solve. 

Working with a master vendor means marketing and finance can work through one vendor instead of managing hundreds of long tail vendors. Marketing has more visibility over payouts to content creators and ultimately spends less time on vendor support. This article dives into how working with a master vendor can streamline operations, improve speed and control, and alleviate common pain points when running influencer marketing campaigns. Influencer payments should be fast and easy for Marketing and Finance.

What is a Master Vendor?

The master vendor acts as a central hub for managing relationships with all the various freelancers and vendors a marketing team works with. Instead of businesses needing to deal with hundreds of macro-influencers and micro-influencers, a master vendor consolidates all these interactions, offering a single point of contact for vendor management and invoicing. The master vendor provides full visibility, payment setup and approval workflow and reconciliation. A master vendor is easier than working through finance systems because both marketing and finance can have access to the master vendor platform. This approach simplifies administration, reduces overhead, and enhances visibility and control over vendor spend.

Why use a Master Vendor when Working with Influencers?

Working with a multitude of small-scale vendors often involves a slew of administrative tasks, from setting up freelancers to ensuring accurate invoices and coordinating payments. These challenges are often amplified for Marketing freelancers like Tiktok influencers and UCG (user generated content) who typically are younger and less business savvy. A master vendor can manage domestic and International payments so you don’t have to worry about currency conversion or preferred payment method. From mega-influencers managed by talent agencies to nano-influencers, a master vendor can deal with all compliance and payment models.

Influencer programs can focus and work through a master vendor to ensure payments can be made quickly and easily. A master vendor can integrate with existing CRMs and influencer tools to create payouts based on agreed upon terms - upfront payments, affiliate commissions, flat fee payments and fees for usage rights can all be semi-automated and visible to all stakeholders.

According to Lumanu's recent interviews with talent management, roughly 50% of all influencer payments are late which causes unnecessary support to track down payment status and communicate with the influencer or talent manager. Most of the time late payments are due to coordination required between marketing and finance. A master vendor can ensure visibility and on time payments.

How a master works with existing influencer marketing and finance tools: 

A Master sits between influencer marketing platforms and Finance tools to provide better visibility, control and speed when working with influencers. The master vendor is setup once as a vendor for finance and streamlines vendor setup and support, saving hundreds of hours. Working through a master vendor as a single point of contact eliminates time spent on administrative tasks. The type of influencer does not matter as a master vendor can manage different business types and compliance.

Marketing can use existing tools with influencer partnerships managed via a brands CRM, influencer marketing platform or spreadsheets. Amounts for influencer rates, campaign descriptions, affiliate marketing commissions, etc can be manually uploaded on a set cadence or automatically fed into the master vendor via Zapier. The only compensation not covered by the master vendor are gifting and free products.

The process for Finance to receive, review and approve individual invoices is time-consuming. Marketing lacks access to finance systems and has limited control over when payments for collaborations are sent. All payouts must be entered into the accounting system. A Master vendor consolidates invoicing at the campaign or project level reducing accounting work by an order of magnitude.

Alternatives to using a Master Vendor

Outside of managing manually (aka the status quo) through an ERP or accounting software, there are alternatives to a master vendor which companies choose when working with freelancers. Each alternative has cons and pros:

1) Work with an agency

Hiring an agency as a single vendor to manage freelancers also gives teams without in-house expertise the ability to tap into an established network of influencers and expertise in campaign management. However this comes with high agency fees which is not cost-effective and eats up a significant portion of an influencer marketing budget.

Not having a direct relationship means less visibility and control over influencer relationships and content creation. The lack of transparency often means not knowing what influencers charge and makes it hard to calculate true return on investment (ROI) for performance-based campaigns.

2) Use AP automation tools (e.g. Bill, Tipalti)

Accounts Payable (AP) automation tools are software tools designed to streamline and improve the efficiency of the accounts payable processes.  AP tools were built for B2B transactions between AP and AR functions across companies. They work well for traditional supplier relationships but are not ideal when working with one off pay-per-post influencers or even long-term partnerships. Support is required to assist with issues during onboarding and questions about payment status. Marketing typically does not have access to these systems so typically must work with finance to resolve.

Often, Marketing does not have access to these tools to set up, review, approve, analyze or check the status of payouts. There are options to set up working queues and add marketing as users, however marketing does not have real-time visibility into payment status or reconciliation history to establish internal benchmarks.

3) Pay via PayPal

Many brands use PayPal to pay influencers. Most influencers/ freelancers have PayPal. As a 3rd party settlement organization, PayPal, like a master vendor, takes on tax compliance and filing. There are several issues teams run into with PayPal, outside of pricing which is ~3% of payment volume:

Paying talent management - Paying individuals works, paying a company via PayPal is not always an option. Roughly 30% of all payments sent through Lumanu are to talent management. Especially when working with higher end talent, except to need an alternate solution for these payments.

Reporting and reconciliation - It’s difficult to sort through PayPal’s transaction history and figure out who was paid and for what. Some companies even have multiple people using different PayPal account and submitting expense reports for reimbursement which makes the process for reconciliation a complete nightmare.

Improve influencer partnerships with a master vendor:

Working with a fintech master vendor is a win-win for marketing and finance. Marketing can stay on trend and work quickly with an instagram influencer to publish reels, or activate a UGC creator for a new product launch to support ecommerce or brand awareness. 

With a Lumanu as a master vendor, marketing can stay focused on executing on their marketing strategy and analyzing metrics across social media platforms. Larger and smaller influencers have fewer support needs and better visibility into payouts.

When creators and talent managers are happier the result is better output for the brand which leads to better content reaching your target audience.