While people used to sneer at YouTubers. Roughly 10 years ago nobody imagined that creating online content could be a job. However, the tides have turned. It seems that the creator economy is growing and here to stay.
TikTokers now mingle with mainstream celebrities, and some of the highest-paid people in the world are social media content creators. It is now a fully-recognized desirable career with higher pay than many industries.
Let’s take a look at this fascinating new frontier of entertainment and advertising!
An Outlook on the Creator Economy
The creator economy is currently valued at $250B. Massive growth is projected for the coming years.
It is expected to reach $480B by 2028. This growth is fueled by both the increased cash flow from brands and demand for content from social media users.
According to a recent study by IAB:
44% of advertisers plan to increase their spend with content creators in 2024. Brands anticipate growing creator content budgets by 25% in 2024. Also, 39% of consumers watch more content now than last year.
Partnering with creators can be a key part of a successful digital marketing strategy. It is likely only going to become more common in many ways as time goes on.
Here are some of the trends to watch that will shape this emerging industry!
TikTok Usage Is Slowing
There has been an interesting journey in the public consciousness surrounding TikTok. When it first came on the scene, no one took it seriously. It was considered a fringe app that would fade in popularity quickly.
Then it became the fastest-growing and most influential app in the social media space. It alone seems to dictate trends for young people, and social media users engaged in online culture as a whole. Tikok alone can sell out products, make a business successful, and make someone famous overnight.
One big reason that TikTok blew up like it did is that its algorithm actually works. Unlike many apps, which jam users feeds with ads and fails to recommend content they actually would be interested in, TikTok had always succeeded in actually showing users what they want to see.
However, recently TikTok has made some changes that some users have described as ‘dystopian.’ We are beginning to see their growth slow after they launched TikTok Shop. Users have been complaining that their feed has started to feel like an endless commercial since the fall of last year.
TikToker Grace Brassel, who has more than 500,000 followers, said in a video that the app is becoming “like SHIEN and AliExpress had a baby,” because of the endless string of advertisements for random products.
Brassel told Business Insider Mexico:
“There’s links everywhere. There’s a hundred ads. Why is there 17-year-old girls trying to sell me 35-cent ring lights?”
Many have complained that TikTok has become overrun with many creators disengenuously pushing the same low quality dropshipped products over and over again to try and make a commission.
In addition, there is now a lot of competition when it comes to shortform content. Other platforms have launched shortform content to try and compete with TikTok. So, if users don’t like what TikTok is doing, they can easily get their shortform content fix somewhere else.
The Growth of YouTube Shorts in the Creator Economy
YouTube launched Shorts to compete with TikTok in 2021. The feature has been growing quickly and even more growth is expected.
In February 2024 it crossed 50B daily views. YouTube also rolled out a revenue share program for creators who make Shorts, which will likely inspire more creators to make them.
Other than TikTok, the main form of shortform social media content comes from Instagram Reels. These get about 200B daily views across the Meta owned platforms Facebook and Instagram.
One thing about shortform content is that its easy to repurpose. Especially for marketing, this is an important strategic consideration. You could make only one 15 second video, and with that video begin a presence on TikTok, YouTube Shorts, and Instagram Reels.
YouTube is not only a comprehensive search engine with a global user base, but research from Pew now shows that Gen Z spends more time on YouTube than TikTok.
Also, as YouTube wants to grow Shorts, its likely that they will boost the profiles of those who make them. Take advantage of this window of opportunity while you can.
It’s a safe bet that short form content in general on different platforms will continue to be influential.
Companies Will Seek Out More Micro-Creators
Interestingly, micro-creators actually can offer better ROI to businesses in some cases. They often have lower rates, but much higher engagement rates than bigger creators.
Hubspot defines micro-creators as those who have followings between 10K and 100K. They are actually more cost effective for business as their engagement rate is higher than those with larger followings. The average micro-creator has an engagement rate of 9%. However, macro-creators and celebrities have only about a 2% engagement rate.
There is some truth to the fact that many people have grown wary of many major influencers.
Numerous scandals and doubts about the authenticity of large creators have caused some internet users to place more trust in smaller creators, who they have a stronger parasocial bond with.
Depending on the type of business you own or product you sell, you may see better results working with a smaller influencer with an engaged audience in their niche, than paying a higher price to partner with a larger creator with a more general reach.
Global Governments Will Continue To Try And Crackdown on Influencers
One reason why many are starting to lose trust in large influencers is because of the many scandals surrounding them. These range from things like false advertising and not disclosing sponsorships to even alleged scams and crimes.
Only one example is the incredibly famous and successful beauty TikTok beauty creator Mikayla Nogueira, who has over 14 million followers.
However, she is a controversial figure who has allegedly given a viral false review of a L’Oreal mascara. Some allege that she also sold out an eyeshadow palette by telling fans that some of the proceeds would go to charity, and keeping the money. She has also come under fire for heavily monetizing her own wedding.
However, these are relatively mild amongst influencer offenses. Others are known for things like filming dead bodies, blackmail, sex crimes, running financial scams on their child audiences, selling expired or otherwise unsafe products, and even grooming young fans.
So, it makes sense that many governments are looking to crack down on influencers.
For example, last year, France began introducing laws to regulate the influencer industry. There are an estimated 150,000 influencers in France, and widespread fraud and scams caused many people to call for regulation.
The law, which France passed in winter of 2023, bans influencers from promoting a range of things. This icludes:
- Cosmetic surgery
- Certain medical devices
- Nicotine products
- Sports betting and gambling
Italy and Turkey are also looking into regulating influencers.
In Australia, if an influencer gets caught posting misleading reviews or failing to disclose sponsorships, they can be fined up to 2.5 million AUD.
Eventually, Will Stronger US Regulation Follow?
In the US, while the FTC and other government departments have made several attempts to regulate influencers over the past few years, few US influencers are actually ever penalized for breaking these laws.
For example, in 2022, Kim Kardashian was charged by the FTC for promoting crypto assets on social media without disclosing that she was paid to promote them.
However, over her influencer career, Kim Kardashian has been known for dozens of what could allegedly be considered unethical promotions and businesses.
These include things like promoting a Kardashian-themed credit card and diet products to largely a very young audience.
More often than not, in the US at least, there is little stopping most influencers from taking part in unethical activities.
However, this likely will not last forever. The world is starting to turn on unethical influencers and governments cracking down on them will continue to intensify with time.
Especially as the world globalizes, and we become more interconnected, influencers and marketers who want a more global reach may have to start keeping international law in mind.
Final Thoughts on the Creator Economy
As you can see, its a very exciting time for the vibrant and thriving creator economy. Growth is expected in the coming years, but that doesn’t mean the space doesn’t present its challenges.
As more and more people desire this job, competition may become more fierce in specific niches, or they may become oversaturated. However, higher competition may be good news for companies looking to work with influencers.
There are also questions of how regulation, AI, and general economic conditions will impact this fascinating space in years to come.
What do you think? Comment below.
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