Latest / The CMO Podcast with Fexingo: Marketing Leadership, Budgets, and Executive Strategy / How CMOs Use Influencer Equity for Long-Term Brand Value
Transcript
- Lucas: So we talk a lot on this show about influencer marketing — the CPMs, the ROI, the attribution headaches. But there's a structural conversation happening quietly in CMO circles that I think is more interesting than any single campaign metric. Luna: I think I know where you're going — are we talking about giving influencers equity instead of cash? Lucas: Exactly. Not just a sponsored post fee, but actual stock or options in the company. It's been percolating for a few years, but I'm seeing more term sheets cross my desk where the influencer is basically a early-stage investor. And the logic is pretty compelling. Luna: What's the logic? Because on the surface, giving away equity sounds risky for a brand. Lucas: It is risky. But the upside is alignment. If an influencer owns 0.5 percent of your company, they're not just posting for a fee — they're building an asset. Their incentive shifts from maximizing a one-time payout to growing the long-term value of the brand. And in a world where attention is expensive and fleeting, that alignment matters. Luna: So it's like converting a contractor into a co-owner. I can see how that would change the relationship. Lucas: Right. And there's a landmark deal that really kicked this off. In 2020, Kim Kardashian took an equity stake in Skims — the shapewear company co-founded by her and Jens Grede. She didn't just endorse it; she owned part of it. At the time, Skims was valued around one point six billion. By 2023, it was at four billion. That equity stake became worth tens of millions. Luna: So she basically bet on herself, and it paid off massively. But that's Kim Kardashian — she's a unique case. Is this trickling down to smaller influencers? Lucas: It is, but the structure changes. For a micro-influencer with fifty thousand followers, you're not handing over 0.5 percent. You might offer a profit-sharing arrangement tied to sales they generate, or a small option pool that vests over two years. The key is that the influencer has skin in the game beyond the post. Luna: Give me a concrete example of a brand that's doing this well at scale. Lucas: Gymshark is probably the best case study. The fitness apparel brand built its entire growth engine on influencer equity. They gave early fitness influencers — people like David Laid and Lex Griffin — equity in the company. Those influencers became brand ambassadors who weren't just posting; they were designing products, showing up at events, and genuinely invested in the brand's success. Gymshark went from a garage startup to a valuation over one point three billion pounds. Luna: So the influencers had real ownership. That's a different model than paying someone fifty thousand dollars for a single Instagram post. Lucas: Completely different. And the cost structure is interesting for CMOs too. Equity doesn't hit the P&L as a marketing expense — it's a balance sheet item. In a tight budget environment, where you might not have the cash to pay a top-tier influencer a seven-figure fee, equity allows you to attract that talent with less upfront cash. The trade-off is dilution. Luna: But dilution is a real concern for founders and CFOs. If you start giving equity to a dozen influencers, you can quickly give away ten percent of the company. And what happens if the influencer stops being relevant? Lucas: That's the risk. You need vesting schedules and performance clauses. Most of these deals include a cliff — say, one year before any equity vests — and they tie vesting to specific milestones. If the influencer stops posting or their engagement drops, the unvested equity doesn't transfer. But you also have to manage the relationship carefully. If an influencer feels like they're being treated like a hired gun, the equity loses its power. Luna: So it's a partnership, not a transaction. That requires a different kind of marketing leadership — you're basically managing a portfolio of co-owners. Lucas: Exactly. And that's why this is a cmo level conversation, not just a social media manager decision. You need to think about long-term brand equity, not just campaign ROI. There's also the question of valuation. How do you value an influencer's contribution? If you give them equity at a certain valuation, and the company grows, they benefit. But if the company stagnates, they might feel shortchanged. Luna: And what about the influencer's audience? Do they know the influencer owns part of the brand? Does that change the trust dynamic? Lucas: That's a great question. Transparency varies. Some influencers disclose their stake, which can actually build credibility — it signals that they genuinely believe in the product. Others keep it quiet because they don't want to seem like a corporate shill. There's no rule yet, but the FTC is starting to look at equity-based endorsements as a form of material connection that should be disclosed. Luna: So there's a regulatory angle too. That's another layer of complexity for CMOs. Lucas: Right. And that's why I think this trend is still in its early adopter phase. But for certain brands — especially DTC, lifestyle, and fitness — it's becoming a standard tool. Red Bull has done it for years with extreme athletes. They don't just sponsor athletes; they give them equity in the brand or in specific events. It creates a level of loyalty that cash can't buy. Luna: Speaking of loyalty — if today was actually useful to you, especially if you're a marketing leader thinking about your own influencer strategy, these conversations stay ad-free because of listener support. You can buy us a coffee at buy me a coffee dot com slash fexingo. It's a small way to keep the show independent. Lucas: Yeah, we really appreciate that. And it helps us dig into these deeper topics without worrying about sponsorship constraints. So, back to equity — I want to talk about a specific challenge that CMOs raise with me: how do you value the equity grant? Luna: That seems like a minefield. You're basically saying, 'Your influence is worth X percent of our future.' How do you even calculate that? Lucas: There are a few approaches. The simplest is to start from the cash fee you would have paid. If you would have paid an influencer one hundred thousand dollars for a year-long campaign, and your company is valued at ten million, then one percent equity is roughly equivalent. But it's not an exact science because equity is illiquid and risky. Luna: So you're trading a guaranteed payment for a potentially higher but uncertain future payout. That only works if both sides believe the company will grow. Lucas: Exactly. And that's the filter. If an influencer doesn't believe in the company's trajectory, they won't take equity. So the deal itself is a signal — it tells you which influencers are genuinely bought into your vision. That's valuable information for a CMO. Luna: What about the legal and governance side? Do influencers get board seats or voting rights? Lucas: Almost never. These are typically non-voting shares or stock options. The influencer is a silent economic partner, not a decision-maker. That's important because founders don't want influencers dictating strategy. But some brands do create an influencer advisory board — a group of top creators who get a say in product direction. That's more common in gaming and beauty. Luna: So it's a spectrum. On one end, you have a pure cash deal. On the other, you have a full equity partnership with influence over product. Where do you see most CMOs landing right now? Lucas: I'd say the middle. A hybrid model — cash fee plus a smaller equity kicker. Maybe fifty thousand dollars plus 0.1 percent equity that vests over two years. That way the influencer gets immediate income and a long-term incentive. It's less risky for both sides. And it's easier to get CFO approval because the cash cost is lower. Luna: What about the influencer's tax situation? Equity can be complicated — they might owe tax on the grant value even before they can sell. Lucas: That's a real issue. In the US, if you receive restricted stock, you might owe ordinary income tax on the value at vesting. That can create a cash tax liability for the influencer. Some companies use options instead, which are taxed as capital gains when sold. But it's something both sides need to work through with accountants. Luna: So it's not a simple decision. But for a CMO who wants to build a long-term brand with authentic advocates, it's worth exploring. Lucas: I think so. The key question is: is this influencer someone you want to be tied to for the next five years? If yes, equity makes sense. If they're just a one-off campaign, stick with cash. The mistake is treating equity as a default — it's a strategic tool, not a compensation plan. Luna: And it forces CMOs to think like investors, not just spenders. That's a shift in mindset. Lucas: It really is. And I think that's healthy for the profession. Marketing has always been seen as a cost center. When you're issuing equity to creators, you're treating them as capital partners — and that elevates the function. Luna: So for a CMO listening right now, what's the first step they should take if they want to explore this? Lucas: Start with one pilot. Pick your most trusted, long-term influencer — someone who already feels like a brand ambassador. Have a conversation about a profit-sharing or equity arrangement for a specific campaign or product line. See how it feels. And talk to your CFO early — they'll need to understand the valuation and dilution mechanics. But the first step is just opening the door to the conversation. Luna: It is a really interesting shift. I'm curious to see how this evolves over the next few years, especially as more creators become sophisticated about business. Lucas: Agreed. And we'll keep tracking it. For now, I think the takeaway is this: the best influencer partnerships are built on shared upside, not just a transaction. Equity is one way to get there.