Here’s a bird’s-eye view of the future of the creator economy

by Ana Lopez

Opinions expressed by businessupdates.org contributors are their own.

The creator economy is booming. At the last census, the total size was estimated at more than 50 million people. With such an influx of independent influencers, bloggers and videographers using social media to build communities online, it was only a matter of time before investors took notice.

In 2021 alone, VCs invested approx $2 billion in 50 creator-focused startups. Such a move is likely to fuel the next growth phase for the content creation industry. I say this with first-hand experience as the general manager of a payment automation software provider.

Mainstream platforms have certainly gotten on board with the short content craze, launching new monetization and funding features for creators. Last year, Meta announced its investment plans more than $1 billion in programs for creators to earn more money on Facebook and Instagram. YouTube has done something similar with the introduction of its Shorts Fundwhich coincides with the “Shorts” feature and competes directly with TikTok.

TikTok quickly responded and established its own channel-specific creator fund. Like other platforms, the investment supports those in the content creation industry hoping to generate additional income. Short-form content monetization offers tremendous growth potential for the creator economy and the platforms that host creators. For example, TikTok expects its ad revenue to triple this year, assuming $3.88 billion in 2021 to $11.64 billion.

Related: Influencers are the future of marketing. Here’s how to prepare your brand

The natural evolution of short-form content monetization

Short content creation is extremely accessible. All you need is a smartphone and an internet connection to create and upload content. The most significant change in the content creation industry is the meteoric rise of monetization, leading brands to do much more than just pay attention to the potential influence. They now treat creators as real talent, streamlining the whole experience and making the relationship more lucrative. Even something as trivial as a complicated payout system can have a negative impact on creator satisfaction. A creator will not want to create for a platform that makes it difficult to get paid.

If anything, monetizing both short and long content has led to an even greater increase in influencer marketing. It makes sense: As more people stayed home and increased their screen time, sponsorships and promoted ads became more prominent in the marketing scene. Advertising has always followed attention, and if attention is focused on content creators, they will also be seen on the ads. Marketing teams need to approach content creation differently.

This goes beyond mere personalization. Using a person’s name in an email just isn’t enough anymore. Instead, marketers are now tasked with creating content that truly reflects individuals.

Segmentation can only take you so far, enabling marketers to tap into the power of influencers – and the content creation industry as a whole — to diversify their coverage and expand their reach.

As more and more brands form relationships with content creators, there will inevitably be a shift. How this shift will change the relationship between brand and maker is still unknown, but some likely scenarios will emerge. Here’s where the the content creation industry is leading.

Related: 10 factors that will make or break your influencer marketing campaign

1. The relationship becomes even more symbiotic

Brands need content creators to engage audiences to monetize short or long content. On the other hand, creators need both brands and platforms to create and host content – ​​and get a slice of the monetization pie. As the importance of monetization increases, more and more creators will be creating full-time. New (and old) platforms must then find ways to attract talent to continue driving traffic and ad spend.

YouTube has a long-established ad sharing model 45% of advertising revenue, with the remaining 55% going to creators. On the surface, it sounds like a boon to the content creation industry. However, if you dig deeper, the reverse is often true. Channel holders only get paid if viewers watch full ads, but 65% of the people report skipping online video ads.

Related: YouTube ad revenue is down, is TikTok to blame?

2. The relationship puts more emphasis on creator experiences

User experience has long revolved around the end user. That will likely change if the creators themselves are included. TikTok and Instagram are taking steps to turn active viewers into creators. The maker fees are an example of this, but also new app functionalities. With just the touch of a button or swipe across the screen, creators can post content in moments. Other brands need to make similar moves.

Nike did the same thing by flying several influencers to its facilities a few years ago to explore the brand’s products — of course, free merchandise was also part of the equation. But the gesture was not all about goodwill. The influencers were ready make a series of videos to be published on a popular YouTube channel, but it’s hard to deny that Nike emphasized the creator’s experience.

Related: Turn your customers into influencers to see massive growth

3. The relationship continues to revolve around talent and reward

Exclusivity deals are nothing new. But as brands become more dependent on the talents of creators, the competition for these independent influencers, bloggers and videographers will only intensify. Chances are you’ll see higher revenue shares and sponsorship deals to secure creators. Streamlined payment options and other incentives are coming soon.

Amazon recently hit one multi-year exclusivity agreement with Tyler “Ninja” Blevins to return to his Twitch platform, who had left on a new exclusivity deal for a reported $30 million. Prior to the controversy, YouTube hit a exclusive live streaming deal with Swedish gamester Felix “PewDiePie” Kjellberg in 2020. The list goes on and on.

Influencer marketing has been around for years and the creator economy is following a similar trajectory. So it’s up to brands and platforms to establish these relationships now or risk losing talent to the competition that lies ahead.

Related Posts