Unprecedented Growth: How the Creator Economy Soared During Covid-19
By Tom Seest
At WebsiteBloggers, we help website bloggers develop strategies to create content, traffic, and revenue from website blogs based on our experiences and experimentation.
Since the COVID-19 pandemic, the creator economy has flourished thanks to alternative ways of being discovered, platform algorithms for monetization, and faster methods for viral fame. Sheridan predicts it could double in size by 2027, reaching $480 billion.
Creators looking to expand their business need long-term partnerships and collaboration, multiple sources of revenue, simplified payments, and tools that track content performance.
Table Of Contents
Since the pandemic began, the creator economy has received considerable scrutiny due to various reasons: increasing numbers of creators are joining, additional ways have opened up for viral fame gain, and income opportunities have presented themselves; additionally, new platforms such as MasterClass and automatic (the parent company of WordPress and Tumblr) have come into existence and received investment capital by some of the world’s largest institutions.
Adobe’s report, entitled ‘Monetization in the Creator Economy,’ estimates the current value of the creator ecosystem to be over $104 billion, representing over 300 million creators and influencers who monetize their content via courses, blogs, vlogs, subscriptions, memberships, products as well as established platforms such as TikTok and Facebook Live.
One of the key trends of 2023 is an increase in people monetizing their content and looking for additional sources of revenue. Influencers and creators alike are using their platform status to promote brands or social causes they care about through influencer marketing or product endorsement.
As such, it’s imperative that creator economies continue to expand and diversify their monetization channels. Unfortunately, however, macroeconomic conditions present some hurdles; brand budgets have been cut back while interest rates increase, which stresses funding for emerging platforms.
Even with its challenges, the creator economy remains growing. Individuals are building their own brands and connecting with audiences on their terms, thanks to platforms that make creating, sharing, and discovering content easier than ever before. Furthermore, many young people are finding success creating online content as a career; as a result, the popularity of the creator economy will likely only continue rising over time. Therefore it is imperative that brands and platforms remain aware of the changing needs of this expanding audience base so as to offer tools and resources necessary for engaging them effectively.
The creator economy has come to include anyone monetizing their skills, knowledge, or following online from amateur hobbyists selling PDFs on the side to professional vloggers. It also encompasses independent manufacturers selling jewelry and clothing on platforms like Etsy as well as companies providing these entrepreneurs with tools such as content creation apps and analytics technology for merchandising technology.
Influencer marketing has seen tremendous growth due to an influx of money. According to Adobe estimates, 32% of full-time creators earn enough from their online work to support themselves; although this represents only a relatively small portion of online users overall, this remains an impressive number.
Direct monetization has proven difficult for many entrepreneurs. Ad deals are inconsistent and often come with strings attached; creators may need to cater to a broad audience, as this makes targeting specific niches or demographics challenging. Relying solely on ads for revenue also has the unfortunate side-effect of deflating the value of the creator’s content as viewers have become accustomed to seeing it freely available across platforms.
As a result, many creators have turned to alternative forms of monetization in search of ways to bolster their incomes, leading to the emergence of tip jars (Ko-fi and Tipbet), content-sharing platforms (Squarespace and Gumroad), course launch platforms (Thinkific and Teachable), as well as subscription services like Livestream and Periscope for video creators to monetize.
2023 is witnessing an increased involvement from traditional venture funds, led by Andreessen Horowitz, who has invested in 18 of the creator-focused companies featured in our Influencer & Content Creator Tech Collection. Other notable backers include Union Square Ventures, CRV Index Ventures SV Angel Social Starts, and Thrive Capital, who all provide backing. As creator ecosystems thrive, they expect investors to prioritize platforms that provide stability, audience growth, and potential monetization opportunities.
Nearly half of the 50 million global creators are making at least some money through their content creation, most commonly through brand deals where they pitch products as influencers, advertising revenues from host platforms direct payments from followers and subscriptions, donations, or subscriptions.
As advertising revenue has decreased, creators must find other ways to make money. This has prompted them to join new platforms like TikTok and expand monetization strategies such as brand collaborations and live streaming; more traditional options, such as Patreon memberships, have also become viable monetization tools for creators.
Many of these new ways to monetize are designed to foster community. For instance, creating a Patreon channel can help a creator expand their audience while offering subscribers benefits such as exclusive content or merchandise. Other means include hosting events or producing niche content that appeals to specific interests.
HubSpot senior marketing manager Andrea Hudson suggests that this trend toward niche content goes hand in hand with the development of community platforms. She notes these platforms provide creators a way to form networks of like-minded people who support one another in pursuing their passions. She anticipates this development will drive further expansion of the creator economy.
As the creator economy flourishes, brands will have an unprecedented chance to engage their target consumer base. By using influencers as ambassadors of their product or service offerings, brands will reach more people at less cost than through traditional marketing channels. As more consumers become accustomed to interacting with brands through digital channels, marketers will be able to capitalize on the growing need for creator-driven marketing. As COVID-19 continues to force people into virtual realities, brands can utilize creator economies as an effective strategy to remain “front of mind” with target audiences and convert them to paying customers. This article is part of the CMO Program series, which highlights how marketers are harnessing emerging technologies and trends to deliver impactful campaigns.
Content creators understand the significance of creating and nurturing communities as an integral component of their livelihoods. After all, this is why brands pay them so much money to promote their products and services – and why children today express more interest in becoming YouTube stars rather than astronauts!
Due to COVID’s negative impacts on demand and consumer spending, many creators have seen their incomes decline significantly. Many are working harder than ever to diversify audiences and income streams (including opening their own e-commerce stores) while simultaneously searching for community-building tools that allow them to connect more authentically with fans.
Growing numbers of platforms now provide these types of tools for creators. TikTok allows creators to set up channels dedicated to their fandoms–with some even making millions from this community-driven work! Other examples include Twitch and Discord, where audience engagement is essential.
Influencer marketing has experienced remarkable growth. Since many millennials and Gen Z consumers rely heavily on content from their favorite creators for information regarding work/life balance, purchases, or how to work, influencers have become “decision engines” for many consumers.
Given this background, the creator economy is projected to continue its dramatic evolution over the coming years. A recent Goldman Sachs report suggests that 50 million content creators could grow to exceed 250 million by 2027 and represent a community worth an estimated $480 billion at that point, which would correspond to projected digital advertising spending growth during that same timeframe.
As the creator economy expands, so too will their need for financial tools. Since these influencers don’t typically file W2s and often have multiple sources of income, they don’t fit neatly into traditional banking infrastructure; hence, several fintech startups have come forward offering solutions, one such startup being Karat, which allows creators to aggregate all revenue on one platform while also offering weekly income smoothing and instant loans based on predicted future income.
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