Thanks to generation-defining platforms such as YouTube and TikTok, the rise of influencers and decentralization of media has led to a new type of economy: the Creator Economy.
The Creator Economy is fueled by influencers and online personalities capitalizing on their digital reach and popularity through selling views, products and services. In early days of social media and UGC platforms, influencers and content creators willingly worked with brands for sponsored content to generate richer deals from ad-share dollars. Many creators were contracted with brands for sponsored posts requiring specific product placement and approved copy (as advertisers normally do). However, this caused backlash and disengagement with loyal fans due to the seeming lack of authenticity from the creator. Now, with platforms such as Cameo, Patreon and Substack, creators are able to use their influential power to monetize their personal brands, changing the traditional power structure with big name brands and forging their own path forward. There are over 50 million people who consider themselves ‘creators’, especially amongst younger generations with strong aspirations to maximize their platform as a career. The advancements in direct-to-consumer technology and platforms have enabled this new economy – which is democratizing the way people can create, build and monetize their personal influence and brand. We believe we are still in the early days of the Creator Economy, and as technology advances in attribution, AI, and data privacy, the direct connection between creators and audience will become even more powerful.
In this edition of DTC Moves of the Month, we’re focusing on the Creator Economy, observing key moves made by not only social media platforms of our decade but also by increasingly popular creators gaming the system.
So, how are social platforms supporting the Creator Economy?
Social media companies are increasingly blurring the lines between content and commerce. This month, Instagram announced three new features to allow creators to monetize their work: creator shops, affiliate commerce, and a branded content marketplace. Though all the details haven't been released yet, creator shops seem to be an expansion of Instagram Checkout, which launched in 2019. Yet since then, Instagram hasn't had much success getting people to shop on the app, mainly because it's still not a seamless experience for users. With these three new features, it's clear Instagram is investing in making the app a better shopping destination.
Meanwhile, Twitter introduced a feature called Tip Jar that lets users make money from their content. The new tipping feature allows followers to tip users whose content they enjoy. Twitter denizens are disproportionately writers and journalists who invest substantial time into their work without reaping major financial benefits, so this move makes sense given the platform’s audience. The company also launched a Clubhouse competitor called Spaces and is allowing some users to sell tickets to their audio rooms. Twitter is rolling out a subscription feature soon as well, which will surely further allow top creators to monetize their content. Historically, Twitter has lagged behind competitors in both user numbers and share price, so perhaps these moves will help the brand stand out.
Over in the world of Gen-Z, TikTok is taking a different approach — paying creators directly versus offering them avenues of monetizing their personal brands. The popular dance app announced a $200 million fund for creators who consistently post original content that is in line with “community standards.” This is the second fund TikTok has announced, and so far, these funds are the only ways the app has allowed its users to monetize their platform. The company is making an effort to keep top talent on TikTok so they don’t move over to competitor YouTube, which enables users to run sponsored ads. It will be curious to see if paying creators directly instead of inventing ways for the creators to monetize themselves proves to be more expensive or sustainable in the long run.
So what does that mean for content creators?
With more emphasis on content creators and their brands, these individuals are now leveraging their fame and influence to make brands follow their lead. Two individuals in particular stand out, each in their own way, in how they’re monetizing their platform while staying true to who they are.
Jimmy Donaldsan, aka MrBeast, is one of YouTube’s most famed creators known for his viral challenges, stunts and giving nature. His jaw-dropping challenges and giveaways have grown his channel to over 62 million subscribers, also earning him the title of ‘YouTube’s biggest philanthropist’. Most recently, he announced an exclusive, long-term partnership and investment in Current. Current is most known for their mobile banking products which enable members to change their lives by creating better financial outcomes. With clear alignment between MrBeast’s philanthropic motives and Current’s mission, the partnership kicked off with a $100,000 giveaway to 100,000 fans through the Current platform, with points that can be used to receive exclusive collaborative merchandise from MrBeast. While Current gains access to the digital creator’s fan base of over 130 million social media fans, MrBeast is able to engage his followers with his charitable focus and promotion of his exclusive merchandise.
This move is one of many that show the immense size and prominence of MrBeast’s influence. MrBeast not only has expanded his YouTube channel into six different areas, but has also ventured into the food industry with MrBeast Burger and soon an exclusive membership club to offer unique perks to subscribers. While prior partnerships placed higher emphasis on the brand being promoted, this demonstrates the shift in scale – putting MrBeast into the center of the story.
Molly Baz, previously a Senior Associate Food Editor at Bon Appetit magazine, has captured the attention of the food media world by leaving the magazine and building a fandom around her story. Cooks from all backgrounds have long admired her quirky personality and twists on classical recipes. After Bon Appetit came under fire for alleged discriminatory practices last year, many YouTube stars announced they’d no longer appear on their channel, which caused the brand to discontinue many of its popular shows, including ‘Molly Tries’.
Instead of joining another food publication, Molly decided to carve her name out in the food world, building her individual brand into a unique, colorful representation of her style of cooking. After the immense success of her Patreon recipe club, Molly used the momentum to fuel her new cookbook and most recently, brand of merchandise. Her merchandise signifies the true power of influencers – fans feel connected to her story, purchasing directly from her and removing any need for a brand as platform. While food influencers typically focus solely on recipe development and brand partnerships, Molly has created a loyal fan base that anchors on her quirks – such her infamous Cae Sal recipe, beloved dog Tuna – and channels that success into promoting women-owned businesses, transparency in the food industry and more. We’re excited to see how more and more influencers create their own product line and offerings to their niche fan base of followers, while striving to make an impact on the industry as whole.
Sources: Forbes Magazine, Influencer Marketing Hub, Fast Company, Insider, PR Newswire, Dexerto, MrBeast Burger, Later, The Verge, Business of Fashion, Business Insider, BBC
Written by Francesca Pietrantonio, Mausum Shah, and Claire Kalikman edited by Eunice Shin for Prophet