The Growth Of The Creator Economy And Why It Matters For The Brands
It's that time when thought leaders share their predictions for what new trends, tactics, strategies and innovations will become popular in the coming year. I'm not typically a prognosticator of things to come, but we all know too well that what was shiny and new six months ago can fizzle in the blink of an eye. But there are always a few trends that show steady growth and, most importantly, deliver for us marketers on hard KPIs. One of those trends that changed the marketing landscape in 2022 was the creator economy. For example, YouTube's creator ecosystem has contributed immensely to the Indian economy apart from promoting learning and education in the country. rupees 10,000+ crores contributed to the Indian GDP, and 7,50,000+ full-time equivalent jobs were created; this number is only about YouTube.
In addition to YouTube, we have Instagram reels, Snapchat, Twitch, Spotify, Substack, Roblox, and regional platforms such as Moj, ShareChat, and many more. Meta platforms follow the money trail into the creator economy with programmes like Facebook stars, bonuses programs and many other monetisation tools. Apart from the monetary gain that makes this one of the most appealing professions for GenZ, what gives it a boost is the attention and fame that come along and the ability to do what you love. Cheaper data and deeper internet penetration provide that critical mass of audience and viewership. Also, hundreds of tools that emerge daily, besides the availability of cameras, smartphones, microphones, editing software and collaboration apps, help them produce top-class content. It is where brands are leveraging these trends. After all, you can never go wrong by investing in content, relationships and communities.
Besides generating more audience engagement and reaching new audiences, content creators and influencers also contribute to business revenue.
Four fundamental shifts are shaping online commerce.
This shift from relying on intent to creating demand through discovery has changed the game, and most discovery happening is on social media through content creators. Let's say that you are scrolling through your Instagram feed, and you see a beautiful dress, a nice watch or home appliances for which you did not have an identified need, but now when you have seen an influencer using it, the need has been created in your existence that will lead to consideration and ultimately purchases. A report from Facebook IQ states that around 73% of users say they've purchased after seeing a creator or celebrity feature on social media. About 63% of APAC shoppers enjoyed buying items they weren't actively looking for, and 63% of 18-to-34-year-olds trust what an influencer says about a brand. Another trend to closely monitor is live commerce by creators. Live-stream shopping is fuelling creator/ seller-led shopping. 300bn GMV (~10% of overall eCommerce) in China driven by live-streaming trade and makes it even more critical for a brand to have a concrete way forward and strategy around the creator economy.
Challenges:
As we see tremendous growth potential for the creator economy in the next few years, it will face some challenges too. Out of the 50 million “creators” that exist today, around two million are professionals, as reported by a signal fire. Amateurs compose the remaining 48 million who merely replicate the kind or follow the trends. It will lead to the repetitive over-supply of content and competition between creators. When there is one monolithic feed built with an algorithm that uses a preferential attachment model, a small set of creators rises to the top, and all creators compete with each other to capture the attention of audiences. It will be interesting to see as it unfolds.
Nevertheless, the creator economy is here to stay. Therefore, brands should be strategic in identifying the creator who can specifically cater to their target audience and campaigns that are not only viral but also meaningful and adds value to the end-users; after all, real influence is about leveraging authenticity.
Vivek Kumar Anand is the Director – Business and Innovation, DViO Digital
