Understanding the Creator Economy
GRIN also recommends: Quick Guide to Earned Media Value
Just how big is the world of social media and social commerce? Most likely, it’s bigger than you think. In less than a decade, Instagram (the leading social platform for creators and influencer marketing) increased drastically to nearly 40 million users with 1,000 or more active followers.
The social media phenomenon now represents an entirely new and fast-growing economy, the creator economy. Content producers from all walks of life and varying skill levels are revolutionizing the world of marketing and advertising.
What is the creator economy?
The creator economy is the collection, creation, and distribution of all content in our current digital world. At the center of the creator economy are social media channels where like-minded users and creators interact to form highly engaged online communities.
These online communities create value around shared interests, information, and beauty. The creator economy converts human connectivity into new forms of wealth.
What is a creator?
A creator is any individual who curates content that resonates with a particular audience online. Thanks to new ways of monetizing creator content, many are able to earn a livelihood as part-time or full-time creators.
Oftentimes, creators have the ability to influence their community to try, buy, or learn more through original content.
A common criteria for creators are follower counts (or number of subscribers) and engagements. Most active creators have a minimum of 1,000 followers on their primary social media channel.
Prolific bloggers with thousands of monthly website visitors are also considered creators. These bloggers leverage their favorite social channels to promote their blog and connect with their readers.
Creators are highly innovative, leveraging their skills to build a personal brand that attracts certain groups of people. While some creators are formally trained in writing, photography, and videography, most simply present a unique perspective or endearing voice that is unmistakably their own.
How the creator economy works
“The path to becoming a creator is much different than it was a few years ago. You can now be purposeful about your approach. People are monetizing their platforms a lot sooner these days.”– Justin Moore, Founder of Creator Wizard
Monetizing one’s original content remains the greatest concern among creators.
For artists who wish to be free of consumerism and dedicate their time to originality and expression, there are emerging platforms like Patreon and Hy.Page that encourage fans to invest in memberships to support their favorite creators.
Currently, brand endorsements are the chief way that creators fund their career.
However, the creator economy is changing, and the enormous value of quality content is opening new doors for creators to monetize their audience. Gary Vanerchuk, a popular thought leader on entrepreneurship and content marketing, made a notable prediction in a recent interview.
Interviewer: “What business idea has the greatest potential for growth in the next decade?”
Gary V: “Becoming someone who can create content – written, audio, or video – for the Internet contextually. Because there will not be a human nor a business on earth in a decade that isn’t in need of a substantial creative department of making – not thinking – making [great content].”
Leading social media platforms need creators to grow their user base. That’s why Instagram announced new ways for creators to make money during this year’s first ever Creator Week.
Why authenticity matters in the creator economy
“The traditional markers of content quality, like big name directors, showrunners or producers; big name actors, writers and musicians; and the catch-all bucket of ‘high-production value’ — all of which have high barriers to entry — are now competing with attributes like authenticity, virality, relatability, accessibility, relevance to one’s community or niche interests and more –which have much lower barriers to entry.”– Doug Shapiro, former executive at Time Warner & Turner Broadcasting System
The creator economy has fueled an unprecedented demand for lifestyle content, or in real life (IRL) posts. A radical shift away from studio shots and toward IRL content is well underway across countless retail industries.
Despite a polished look and feel, production companies are learning that one cannot fake authenticity in a commercial or ad. In fact, authenticity can shine through any kind of content, including primitively home-made videos.
Audiences crave a different style of content, and creators are supplying that content with a transparency and originality that is difficult to imitate. Nowhere is this more apparent than in the influencer marketing industry.
Influencer marketing works best when brand endorsements by creators reflect genuine love for the products they promote. Authentic brand endorsements come from direct relationships between brands and creators. This approach stands in direct contrast to the opt-in influencer network model where brands and creators are “matched” without either knowing very much about the other.
Working with creators to produce authentic content that converts
“Authentic content is any media – web page, blog, email, text, social post, etc. – that is honest, compelling, and bigger than a mere product or service. An authentic piece of content often haunts its audience and draws like-minded people together around a particular cause, lifestyle, or set of values.”– GRIN, How to Create Authentic Content
The buyer conversion power of influencer marketing is high for brands that understand creator relationships and authentic content. For many high-performing campaigns, all it takes is for an enthusiastic creator to publish a lifestyle image featuring one of their favorite products. Because audiences trust that creator’s endorsement, they flock to the creator’s brand ambassador landing page and complete their purchase.
Social media channels like Instagram and TikTok are enhancing their social commerce features, such as in-app shopping and shoppable image ads. These tools increase the conversion power of influencers and ecommerce brands leveraging social media to attract new customers.
Working with creators to guide customers through the entire marketing funnel
As more brands have learned how to onboard select creators into full-fledged partnerships, the impact of influencer marketing on prospects across every stage of the marketing funnel are enormous.
In ecommerce, for example, the more impactful each customer touchpoint, the better the customer experience becomes. And the better the customer experience, the deeper that brand’s connection will be to their audience. Authentic content from creators can resonate with consumers in a powerful way because it carries more social proof than a branded post or traditional ad.
Influencer marketing does so much more than drive conversions – it elevates the brand-creator relationship to include more meaningful connections with niche audiences. These benefits lower customer acquisition costs and increase a customer’s lifetime value.
Common roles within the creator economy
Not every creator is an influencer, and not every influencer manages 100,000+ followers. The creator economy is broad and developing. But there are several common categories under which creators fall.
Creators as celebrities
Celebrity endorsement marketing existed long before the rise of influencer marketing. Creators that acquire 1 million or more engaged followers achieve celebrity status, and as a result, endorsements from these celebrities (though expensive) create a big “splash” within a brand’s target audience.
Artists who achieve celebrity status outside of social media (professional athletes, movie stars, etc.) often choose to become active on social media to connect with their fans and create more IRL content. These celebrities may promote their favorite brands, accept endorsement deals, or leverage their social media to promote their own entrepreneurial endeavors.
Creators as content producers
Many creators simply love perfecting their craft, expressing themselves uniquely through specific styles of content. These creators may partner with brands to compose versatile product images, videos, blogs, etc. that brands can repurpose in a variety of ways.
That’s why many direct-to-consumer (DTC) brands prefer to outsource their social media post content to these individuals. Creators as content producers are more affordable and authentic than most media production agencies. This approach also lowers payroll costs for DTC marketing teams.
Creators as influencers
When a creator embraces their role as an influencer, audience members pay close attention to that influencer’s opinions and guidance when considering their own needs and aspirations.
Key opinion leaders (KOLs)
A KOL typically holds the necessary credentials to become an expert in their field. Examples of KOLs include professional artists, executives turned business coaches, licensed healthcare professionals, and more.
Brand partnerships with KOLs work best in B2B markets or complex industries (SaaS, nutrition, mental health, etc.).
Some brand-influencer partnerships run so deep that the relationship becomes exclusive. This approach is most common among influencers who are official brand ambassadors.
As an ambassador, that influencer may receive cash payments but nearly always enjoys free products, commissions on sales, and exclusive brand perks.
Affiliate influencer relationships often work just like ambassadorships. Many brands use these terms interchangeably.
But these influencers work solely on commissions. That creator’s online presence offers higher returns for brands because influencers have a stronger connection to their audience than do traditional affiliates.
Another category of influencers are those influential customers that are avid brand fans. Many brands establish communities of customer advocates who connect with one another around shared interests and brand-sponsored activities.
Customer advocates often have smaller audiences, but those audiences tend to be highly engaged. These influencers can drive sales and intense brand loyalty among their fans and followers.
Brands already tapping into the creator economy
Between 2016 and 2020, the influencer marketing industry grew by more than 550%. Experts predict that it will be a $13.8 billion industry by the end of 2021.
Brand-creator partnerships currently drive most creator economy growth. Here are three brands that consistently demonstrate strong creator relationships.
Warby Parker is one of the first glasses companies to market directly to their consumer audience. Building relationships with creators has been a key part of their marketing strategy since its startup days.
Today, Warby Parker manages thousands of creator partnerships. Some of these creators are brand ambassadors, while others produce IRL content for the marketing team to use in branded posts, ads, and more.
Dunkin Donuts is one of the best examples of how brick-and-mortar brands can leverage creator partnerships to promote new menu items and drive in-store sales.
Dunkin Donuts is also one of the first retailers to embrace influencer marketing on TikTok. They currently partner with some of the biggest TikTok creators including the app’s top performer, Charli D’Amelio.
Oakley leans heavily on their creator teams for branded social posts and ads. These IRL images on Instagram and Facebook allow Oakley’s social pages to leave the photo studio and offer a truly active vibe.
The challenge of managing a large number of creators
For brands that have committed to a robust influencer marketing strategy can be a time consuming task, which is why creator management software can effectively meet partnership challenges head on.
Many of the leading social platforms are applying updates that make it easier to identify high-performing creators within specific industries. That said, using a creator-specific platform helps marketers narrow their influencer search based on audience demographics, bio keywords, engagement rate, and more.
Recruiting & onboarding
Negotiations and contracts ensure that brands and creators are in complete agreement before formalizing new partnerships.
After agreeing to terms, these new creator partnerships require an initial onboarding process, such as gathering shipping information, product preferences, and campaign guidelines. Many brands utilize various forms of media (intro videos, slide presentations, etc.) to expedite a creator’s familiarity with their new partnership.
Over time, most influencer marketers learn to leverage each creator team member according to their strengths. Personalizing the brand-creator relationship means paying close attention to details and maintaining impeccable communication with each creator partner.
Depending on how many different types of partnerships and campaigns a brand chooses to run in a given time period, maintaining a sustainable process can be one of the most difficult parts of an influencer program.
That’s why influencer marketing automation is so important. Campaign workflow tasks are highly repetitive and are more efficient to manage within the right software solution.
Managing inventory while overseeing free gifts to creators often places unique burdens on ecommerce brands that lack a strong product fulfillment process. Among the best solutions to this challenge is seamless ecommerce shop integration within an influencer marketing software platform.
Whether product seeding, commissions on sales, flat fees, or a combination of all three, high-performing influencer programs must plan their creator payments carefully. Brands need to disburse payments accurately and in a timely manner in order to maintain strong relationships with their creators.
The creator economy offers consumers and brands a unique opportunity to connect in ways never before possible in the history of retail. Brands that see beyond the initial conversion power of influencer campaigns can enhance their authenticity across their entire marketing funnel, thereby lowering their costs and increasing results.
Was this article helpful? Give it a share!
What the best brands are doing to drive revenue from influencer marketing
Whether you are just getting started with influencer marketing or already have your program in place, this guide gives you the tools to get the return on investment your C-level will love.