Creators are at the center of a massive shift in consumer behavior, encompassing not only purchasing habits but entertainment and culture at large. While the rise of social media fueled targeted tracking and personalized ads, the ripple effects of the pandemic and stricter privacy laws have further incentivized creators to act as a conduit between brands and consumers, all while getting paid. Social platforms have adjusted accordingly, developing incentives and funds to attract creators and boost metrics like engagement and time spent on the platform. The creator economy is booming, and it’s only the beginning.
What is the Creator Economy?
The creator economy is the $100 billion ecosystem surrounding content creators, their followers, the platforms on which they share content, and the brands with whom they collaborate. Creators are at the center of this ecosystem due to their expertise, identity, and interests, as well as their ability to build trust within their communities. Over 50 million people worldwide consider themselves creators, a number that has skyrocketed in part due to the decentralization of media: it’s now far easier to connect with people you don't know online, share what you create, and monetize this content.
In the past, brands relied on advertisements to influence purchasing decisions. Later, they would also partner with celebrity ambassadors and influencers. Because consumers are turning to platforms like YouTube and TikTok to decide whether a product is worthy of a purchase, many creators are now driving consumer purchasing decisions via both sponsored posts and organic traffic. In 2021, an influencer marketing trends survey by Tribe Dynamics, a CreatorIQ company, found that of 150 brands, 66% had increased their influencer marketing budgets from the previous year, while 94% of brands had paid at least a portion of their influencers. Moreover, according to the Patreon Creator Census of 2022, which surveyed 13,000 creators earning an income on Patreon, only 2% of creators’ revenue is derived from brand sponsorships. These numbers indicate that the creator economy is growing, and creators are on track to claim a bigger slice of the revenue pie.
What’s the Difference Between an Influencer and a Creator?
Before we called them creators, people who made a living sharing content with their followers were often thought of as influencers. Though influencers and creators are sometimes used interchangeably, there are nuances between the two terms. Influencers are typically those who amassed a following from some other venture—for example, former Disney star Selena Gomez, or celebrity socialite Kim Kardashian. In addition, many influencers were more focused on brand partnerships, and were traditionally part of industries like beauty and fashion. According to the aforementioned Tribe Dynamics survey, 82% of 200 influencer respondents had worked with brands in a paid partnership. Finally, influencers of the past recall a "curated and polished" persona and Instagram feed, in contrast to the unfiltered, authentic aesthetic that has defined the TikTok-influenced social media space in recent years.
More recently, influencers have begun referring to themselves as creators. Compared to the specific connotations conjured by traditional influencers, digital content creators comprise a wide range of categories, from artists, musicians, and writers to gamers, beauty creators, and fashionistas. The ability to capture an audience’s attention has become more accessible, and the term "creator" allows for a variety of content creators to fit the mold. This terminology paves a path for content-makers to be thought of as artists—people who don't just post, but curate, create, and share themselves or their work with their community.
“I think all influencers are creators; maybe not all creators are influencers.”
Nicole Quinn, Partner at Lightspeed Venture Partners, to New Yorker Writer Kyle Chayka
How Do Creators Partner with Brands and Social Media Platforms?
With the Great Resignation and the rise of the gig economy, more people are making a living by creating content, further legitimizing the industry. Creators are realizing the power of the creator economy, and so are social platforms. Creator-centric platforms like YouTube and TikTok are now among multiple platforms vying for creators’ attention via creator funds and studios. By incentivizing creators to build communities on their platform, these companies can tap into creators’ proven ability to directly monetize their audience.
In its newsroom, TikTok shared what inspired them to develop TikTok's Creator Fund:
"We want to show our appreciation to our brilliant creator community by rewarding them for their incredible TikTok videos and creativity. We want all creators to have the opportunity to earn money doing what they love and turn their passion into a livelihood."
Meanwhile, Instagram is making it easier than ever to produce content using its templates for reels, as well as its Creator Studio. In addition to developing tools dedicated to facilitating the content production process for creators, TikTok is targeting smaller brands in its Creator Marketplace, where brands can use the platform to discover emerging TikTok creators who have between 10k and 100k followers.
As the creator economy grows, brands that offer creative control and career development opportunities will outpace their competitors. This is partly because consumers as a whole are gravitating toward more authentic forms of creation—it can be an ad, as long as it doesn't look like one. With consumers putting their trust in their favorite creators, it's increasingly important that brands leverage a discovery tool to find the right creators for their campaigns. Once brands find creators they love working with, and who align with their campaign goals, it's crucial for these brands to cultivate long term relationships with them.
CreatorIQ's software not only helps brands find the right creators to partner with, but also offers an end-to-end influencer marketing platform that enables brands to measure the impact of campaigns and scale a successful program.
The Future of the Creator Economy
The establishment of creator funds and the expansion of revenue-sharing models are an indicator that the creator economy is here to stay. The future of the creator economy will likely include more profit-sharing for creators, an increase in video content, the expansion of social commerce, and the growing impact of brand partnerships featuring micro and nano creators.
Brands that don’t adapt to this rapidly growing industry will risk being left behind. CreatorIQ can help your brand take advantage of the momentous possibilities of the creator economy through software that helps you discover creators, execute your campaigns, and measure the impact of your efforts.