Prediction: Here’s How Brands Will Find Their Way Around the Social Media ‘Platform Tax’ in 2023

Jon Davids
Jon Davids is the CEO of Influicity.
Prediction: Here’s How Brands Will Find Their Way Around the Social Media ‘Platform Tax’ in 2023
Image by Evan Xie

I spoke with a guy the other day who runs a $60-million-per-year ecommerce business. I asked what his number one problem is today.

His answer: “I’m paying Google and Meta 30% of every dollar in revenue. I know customers love my product, and I’d love to have a more direct connection with them.”


Truth is, I hear this all the time from marketers at business-to-consumer (B2C) and business-to-business (B2B) brands . And it’s not just those two players. TikTok, Snapchat, LinkedIn and others have built powerful platforms that keep users locked in, turning these sites into de facto gatekeepers for brands.

We call it the “platform tax.” You want to sell something digitally? You need to pay a platform for access first.

With the shaky economic outlook for 2023, many brands are cutting back their media dollars and seeking new avenues to reach potential customers.

We spent the first five years at Influicity helping brands work with influencers, including movie studios, consumer goods, automotive brands and so on. At its essence, these brands were tapping into communities that influencers had built using platforms that could provide massive scale.

Social marketing’s next evolution will see brands building their own communities. And these communities are directly tied to revenue. Here’s how they’ll do it:

Working Directly with Influencers

Content creators are a phenomenal community builder because they drive consumer attention while lending a halo to the brand. Influencers come in all shapes and sizes — from the micro, such as the neighborhood soccer mom to the mega, such as the reality show star.

We see more brands leaning towards long-term relationships with influencers to generate authentic and continuous demand. They’ll do this by partnering with individual influencers on longer term commitments (i.e. 6-12 months) with exclusive requirements (i.e. you can’t work with my competitors during this period).

A good example of this is apparel brand Hollister Co, who works with a group of about 30 influencers on live streams and custom collections.

We see brands doing this on the social platforms as well as other channels, like podcasts and email.

Turning to Podcasts

Massive communities have been built through podcasts: Joe Rogan, Lex Fridman and Alexandra Cooper, to name a few.

A brand example of this is RestoTalk, a podcast from restaurant-tech company TouchBistro. This podcast is hosted by Food Network star Justin Warner and has a loyal following of restaurant industry pros. (Disclosure: TouchBistro is a client of Influicity)

Another example is HubSpot, which acquired the podcast My First Million to reach the entrepreneurship community.

Podcasts avoid the platform tax because users can download or stream them directly from their favorite podcast app, like Apple Podcasts or Spotify. Brands only need to cover server fees.

Some marketers get tripped up because they think their podcast should be about their brand. It shouldn't. Your podcast should be about what your ideal customer cares about. Running a food brand? Talk about recipes and meal prep. Have a construction company? Talk about architecture and building innovations.

There are lots of opportunities for brands that put in the time.

Building a Rapport By Email

It was old, then it was new, then it was old —now it’s new again. When done right, regular emailing can actually be a great community builder. They can become a part of the user’s daily ritual. And they can work with many different formats including text, photo and video.

Email can easily be the largest single revenue driver for consumer brands. It can also help B2B brands build a sales pipeline.

Consumer apparel brands like Tilley.com and Indochino.com (full disclosure: both are clients of mine) have daily emails that drive hefty ecommerce sales. On the B2B side, analytics company Ahrefs offers a weekly newsletter that is very popular with search marketing professionals.

Email is also one of the few non-interceptable communication vehicles. No news feed algorithm is going to filter out your message. You can’t be de-platformed, and you don’t need to pay for access to an inbox.

Organic Reach on Platforms

The same platforms that charge for access are also your best allies in creating communities: TikTok, Instagram, Twitter, LinkedIn and the rest.

I know brand leaders will complain that their content is getting filtered out and only seen by 2% of their followers.

So here’s a secret from first-hand experience: I get 500K to 1 million impressions per month (free) on LinkedIn. And it’s not luck.

It's a deliberate exercise in figuring out what the platform wants to surface and playing into that theme. And you need to do this while staying true to your own brand.

While there’s no one-size-fits-all solution, one or more of these channels could be a vital part of your brand’s communication strategy. As 2023 rolls around, take the time to experiment with the right mix. It’s not an easy balance, but it’s critical to building a community of your customers.

LA Startups Supercharging Cars and Dating 🚗⚡💑

🔦 Spotlight

Happy Friday Los Angeles!

EVgo Inc., a leading Electric Vehicle (EV) charging company based in West Los Angeles, has seen substantial growth under CEO Badar Khan. The company now operates over 3,400 fast chargers across 1,000 sites nationwide, strategically placed in high-traffic urban and suburban areas to enhance convenience for EV users. EVgo’s model focuses on owning and managing its charging stations to ensure a seamless experience, reflecting its commitment to supporting the mass adoption of electric vehicles and facilitating the transition to cleaner transportation.

In a different electrifying market, Joe Feminella, inspired by his own successful dating journey, launched the dating app, First Round’s On Me in El Segundo with $5 million in funding. This app differentiates itself by requiring users to schedule a date within 24 hours of matching, and after a soft launch in select markets, it expanded nationwide in 2024. As the dating app market faces criticism over algorithmic practices and premium features, First Round’s On Me aims to offer a more genuine and immediate dating experience. Both EVgo and First Round’s On Me exemplify how companies in different industries are addressing their respective market challenges with innovative approaches to improve user experience and engagement.


🤝 Venture Deals

LA Companies

  • 3DEO, a startup that specializes in 3D printing small, high-volume metal parts, raised a $3.5M Strategic Investment Round from Mizuhio Bank. - learn more
  • Spotter, a startup that underwrites creators and offers AI tools, raised a $7.4M Funding Round. - learn more
  • Cashmere, a lead generation startup for wealth managers, raised a $3.6M Seed Round. Canapi Ventures led, and was joined by Benchstrength, Plug and Play, The House Fund, and Courtyard Ventures. - learn more

LA Venture Funds

  • Crosscut Ventures participated in an $8.9M Series A Extension for Nostra AI, a startup that helps e-commerce businesses improve their website performance by speeding up load times. - learn more
  • Fika Ventures, an eight-year-old Los Angeles venture capital firm, has raised a fourth fund in the amount of $160 million to invest in early-stage B2B startups. - learn more

      ✨ Featured Event ✨

      LA TECH CEO SUMMIT

      LA’s tech leadership is set to reunite after a long break! This two day summit will focus on building strong connections, sharing insights, and fortifying the local tech community.

      Learn More Here

      Register Here


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      🍵☕️Top 6 Coffee Alternatives for Enhanced Productivity

      In the fast-paced world of startups and venture capital in Los Angeles, maintaining peak productivity is essential for founders and investors alike. As the hustle intensifies, many are seeking alternatives to traditional coffee that not only provide a sustained energy boost but also support overall health and well-being. The following list highlights some of the top-rated coffee alternatives that can enhance focus and productivity while minimizing the adverse effects of caffeine. These options incorporate adaptogens, superfoods, and gut-friendly ingredients, making them ideal choices for those looking to optimize their performance without the afternoon crash.


      Matcha

      Image Source: Jade Leaf Matcha

      Matcha is a finely ground green tea that offers a moderate amount of caffeine, along with L-theanine, which promotes relaxation without drowsiness. This combination can enhance focus and concentration, making matcha a suitable alternative for those looking to boost productivity without the jitters of coffee.

      Popular Brands: ReNude Chaga Matcha (60 mg caffeine), Golde Pure Matcha (60 mg caffeine), Organic Ceremonial Matcha - Teahouse Edition (30 mg caffeine)


      Dandelion Root Coffee

      Image Source: Amazon

      Dandelion root coffee is a caffeine-free alternative that mimics the taste of coffee. It is known for its potential to support liver health and digestion, which can contribute to overall well-being and productivity. The drink can help avoid the acidity and jitters that often accompany regular coffee, making it a gentler option for those sensitive to caffeine.

      Popular Brands: Dandy Blend (0 mg caffeine), Teeccino Dandelion Dark Roast (0 mg caffeine)


      Adaptogenic Drinks

      Image Source: MUD\WTR Masala Chai

      Adaptogenic beverages, which include ingredients like ashwagandha, reishi, and maca, are designed to help the body adapt to stress and promote mental clarity. These drinks can provide a sustained energy boost without the crash, supporting productivity throughout the day. They are often made with superfoods and spices that enhance both physical and mental performance.

      Popular Brands: MUD\WTR Masala Chai (35 mg caffeine), Four Sigmatic Think Coffee (150 mg caffeine), ReNude Chagaccino (0 mg caffeine)


      Golden Milk (Turmeric Latte)

      Image Source: Golde

      Golden milk, made from turmeric, ginger, and milk (or a milk alternative), is a caffeine-free option that can improve mood and reduce inflammation. The calming properties of this drink can help maintain focus and clarity, making it a great addition to a productive morning routine.

      Popular Brands: Golde Turmeric Latte Blend (0 mg caffeine), Blume Turmeric Blend (0 mg caffeine), Four Sigmatic Golden Latte Mix (0 mg caffeine)



      Chicory Root Coffee

      Image Source: Teeccino

      Chicory root coffee is an excellent alternative that satisfies the desire for a warm beverage without caffeine. It is rich in inulin, a prebiotic fiber that aids in digestion and promotes gut health by supporting beneficial bacteria. Chicory coffee has a nutty, earthy flavor and can help control blood sugar levels, contributing to overall energy and productivity throughout the day.

      Popular Brands: Anthony’s Instant Chicory Root (0 mg caffeine), Teeccino Chicory Coffee Alternative (0 mg caffeine)


      Yerba Mate

      Image Source: Guayaki Yerba Mate

      Yerba mate is a traditional South American herbal tea made from the leaves of the Ilex paraguariensis plant. It contains about 40-80 mg of caffeine per serving, which is less than a standard cup of coffee but enough to provide a gentle energy boost. Yerba mate is rich in antioxidants, vitamins, and minerals, and users often report feeling energized without the jitters or crashes associated with coffee. It has a unique, slightly bitter flavor and can be enjoyed in various forms, including loose-leaf tea and pre-brewed options.

      Popular Brands: Guayaki Yerba Mate (40-150 mg caffeine)


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      LA’s Data Center Supply Crunch

      🔦 Spotlight

      Happy Friday Los Angeles!

      The Los Angeles data center market is experiencing a significant supply crunch, ranking 12th in growth among top markets since 2020 with only 265 megawatts of colocation inventory (data centers where businesses rent space to store their computing hardware and servers). Despite this, demand is surging, driven by AI, cloud, and hyperscaler needs, with AI accounting for 20% of new data center demand nationally. This scarcity is creating a highly competitive environment, with vacancy rates at a record low 3% and asking rents rising 13-37% year-over-year. For Los Angeles, this presents both challenges and opportunities in the big picture. The city's strategic position as a global entertainment hub and its connectivity to international markets through subsea cables make it an attractive location for data centers. However, the limited inventory and rising costs could potentially hinder growth and innovation in the tech sector. To maintain its competitive edge, Los Angeles will need to address these constraints through new developments, such as GI Partners' 16 MW addition at One Wilshire, and by focusing on high-connectivity, high-power capacity submarkets. The city's tech community should prepare for a landscape of increased competition for quality data center space, higher costs, and the need for innovative solutions to meet growing demand, particularly in AI and cloud services. While Los Angeles faces a challenging data center supply crunch, its strategic advantages and ongoing developments offer a promising path forward.


      🤝 Venture Deals

      LA Companies

      • Daisy, a one-year-old startup that designs and installs smart home and office technology systems, raised a $7M Series B co-led by Goldcrest and Bungalow, with previous investors Bullish and Burst Capital also stepping up. The company has raised a total of $13.3 million. - learn more

      LA Venture Funds


        ✨ Featured Event ✨

        LA TECH CEO SUMMIT

        LA’s tech leadership is set to reunite after a long break! This two day summit will focus on building strong connections, sharing insights, and fortifying the local tech community.

        Learn More Here

        Register Here


        Download the dot.LA App

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