Everything Marketers Need to Know


The media landscape has changed significantly over the years thanks to the rise of the Internet and social media. With platforms like YouTube and TikTok, anyone can connect, create content and find their niche audience. As a result, media has become more decentralized than ever, and millions of content creators have created a new space in the entertainment industry: the creator economy.

But what exactly is the creator economy and why should marketers care? Here’s everything sellers need to know:

What is the creator economy?

The role of social networks in the economy of the creator

Platforms with funds and programs for content creators

How brands should use the creator economy

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What is the creator economy?

The creator economy is an online-facilitated economy made up of millions of content creators, including social media influencers, videographers, bloggers and other digital creatives. The creator economy also includes software and tools designed to help these creators grow and profit from their content.

The creator economy is a relatively new addition to the media and entertainment industry, and it’s something that anyone of any generation can be a part of. Whether you’re a millennial with a true crime podcast or a Gen Z fashionista with a style blog, you can be a part of the creator economy in any niche you choose.

Think about it: If a TikTok account rating bath in New York City can go viral, there really is no limit to what’s possible in the content creation business.

The role of social networks in the economy of the creator

The rise of social media has fueled the growth of the creator economy. According to Forbes, there are about 50 million content creators on various platforms, including YouTube, TikTok, Instagram and Twitch. That’s about 50 million people participating in the creator economy.

The creator economy experienced significant growth during the onset of the COVID-19 pandemic. During this time, many people found themselves working from home or looking for new sources of income due to budget cuts and layoffs. This led to more people having more time or incentive to create content on platforms like TikTok, Twitch and YouTube.

In fact, TikTok saw a significant increase in users during the peak of the pandemic, which directly contributed to a boom in the economy of content creators. According to Statista, TikTok experienced 180% growth among users aged 15-25 after the pandemic broke out in the US in 2020.

Chart showing how TikTok experienced a huge user boom at the start of the COVID-19 pandemicSource of the image

Aside from financial opportunities (and an escape from boredom), social media provides a digital space for almost anyone to publish their content, promote their work and build a loyal fan base. In the creator economy, you can be a creator without investing in expensive equipment or getting the backing of major studios.

For example, Kyle Prue rose to fame on TikTok with videos showing his dry humor. All of his videos are filmed from his apartment using his iPhone and the microphone in his Apple headphones. Despite her simple setup, Prue has over 1 million followers on TikTok and 32.5 million likes.

He also wrote and starred in his dark comedy-drama web series, “The Rabbit,” which he posted on YouTube for viewers to watch for free. Prue put together the series with her own money and without the help of any major studio or production company. Each episode has between 20,000 and 71,000 views.

Platforms with funds and programs for content creators

As I mentioned, many people turned to the creator economy to make money, especially at the beginning of the pandemic when companies were experiencing hiring freezes and layoffs. Many digital platforms contribute to this economy through their creative funds and programs, including:

YouTube

For years, content creators on YouTube have made money from ad revenue from video ads. YouTube also has the YouTube Partner Programs, which give creators access to exclusive features and various monetization opportunities. To compete with TikTok, YouTube also launched the YouTube Shorts Fund, which committed a total of $100 million to creators from 2021 to 2022.

Instagram

To keep up with the growing creator economy, Instagram has launched many new opportunities for creators to earn money from their posts on the app. One opportunity is Instagram’s live badges, which allow users to send monetary tips to their favorite creators during live streams. Another opportunity is the Instagram Reels Play Bonus Program, where creators earn money based on their Reel’s performance.

Other monetary opportunities include:

  • Branded content
  • Stores for creators to sell directly to their fans
  • In-stream video ads
  • Affiliate programs

Tik Tok

TikTok’s Creator Next program includes its $200 million creator fund, gift and tip opportunities, and a creator marketplace to connect creators with brands. The creator fund is accessible to many creators, including those with only 10,000 followers, as long as they have at least 100,000 video views in 30 days.

Twitch

Streaming platform Twitch has its Twitch Partner Program, where creators can earn income in various ways. One way is through channel subscriptions. With channel subscriptions, streamers earn revenue when their viewers subscribe using the following options: Tier 1, Tier 2, Tier 3, or Prime.

Bits is another feature of the show, which allows viewers to buy virtual goods to “cheer” streamers. Streamers get a percentage of the revenue Twitch receives from these purchases. And finally, Twitch streams can earn money through ad revenue from ads served during their streams.

Other ways content creators make money

Although many social media platforms offer creators opportunities to earn money through creator funds and programs, the income for content creators is usually not very high.

According to a survey by NeoReach and Influencer Marketing Hub, only 1.4% of the 2,000 content creators surveyed earn more than $1.4 million per year. Only slightly more than 20% earn a livable wage of $50,000 or more per year. To combat this problem, content creators often supplement their income through other means, such as:

  • Brand agreements and collaborations
  • Sponsored content
  • Paid subscriptions
  • VIP meetings
  • Hosting of events
  • Merchandise
  • Live and virtual events

Some content creators can also use their online presence as a stepping stone to more lucrative ventures. For example, Tabitha Brown is a social media personality and actress who rose to fame on TikTok for her calming affirmation and recipe videos.

Her social media fame led her to star in popular TV shows like Showtime’s “The Chi.” Brown also has her own show, “All Love,” on Ellen DeGeneres’ digital platform EllenTube, as well as a best-selling cookbook and an ongoing partnership with Target.

How brands should use the creator economy

Viewers tend to care more about people and personalities than brands in the creator economy. As a result, many major brands have struggled to find their place on platforms like TikTok or Twitch. However, there is still one way that brands should take advantage of the creator economy to grow their audience and generate revenue: influencer marketing.

Brands should reach out to influencers with a loyal following on social media to spread the word about their products or services. A great example of influencer marketing would be the work of TikTok personality Drew Afualo. Afualo is famous on TikTok for creating videos that poke fun at misogynists and uplift women.

Since gaining millions of followers on the app, Afualo has been tapped to promote movies like “The Lost City,” starring Sandra Bullock and Channing Tatum.

Online fashion retailer Shein has also worked with Afualo to promote the company’s SheinX collection.

There are many ways to take advantage of influencer marketing. Popular tactics include social media takeovers where an influencer “takes over” a brand’s social media account for a day. Some brands like Genius will host live Q&As with influencers or celebrities on platforms like Instagram Live or Twitter Spaces. Additionally, paid partnerships, product placement, and sponsorships are considered tried and true methods.

Just remember: If you’re leveraging influencer marketing, you’ll need to make sure the influencer’s content and image aligns with your brand. After all, you should always practice discerning who or what is associated with your brand or organization.

The creator economy is how influencers and creatives earn income by creating content unique to them and leveraging their niche audience. However, it is also an excellent avenue for brands to build awareness and stay relevant in an ever-changing media landscape. Now that you know about this growing economy, you can find new and innovative ways to incorporate it into your marketing strategy.

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