First off, what is the creator economy?
We’ve seen a rise in the “creative economy” in recent years, with creators earning money by creating and distributing online material. The idea of making money off of creator-created web material isn’t new. The creator economy refers to the various enterprises established by independent creators to monetize their skills or their products, ranging from vloggers to influencers to writers. It also includes the businesses that provide services to these artists, such as content creation tools and analytics systems.
Entrepreneurs in the creator economy have been able to rely on money earned online from their material. Traditional influencer marketing, such as sponsored posts and brand partnerships, accounts for only a small portion of the income potential available to creators on social media and other platforms. Hence, the Creator Economy has risen to the top of the marketing and commercial world. Since October 2020, only 31 startup capital investments have resulted in $800 million in industry growth. Such a large monetary input into the Creator Economy sends clear messages that it is not only legitimate but also a power to be dealt with.
Historically, the creator economy has been dominated by individuals who have already developed a talent, perspective, aptitude, or other expertise that they can now spread and, ideally, commercialize through internet platforms. For instance, an instructor who can use Teachable to give online courses. However, we’re now seeing a whole new breed of online producers acquire traction and build audiences without having to share a unique skill they previously possessed (e.g., TikTok personalities).
TikTok debuted slightly over a year ago and is now the second most popular Creator platform behind Instagram. TikTok, along with Instagram and YouTube, is one of the three main monetizable mediums for creators. They caused us a fright last summer, but they aren’t going away.
A Brief Overview of the Creators Economy
Way back in the 1990s, the term “creator” was mostly used in the business setting (authors, journalists, actors, musicians, etc.). Many creators failed to build big fanbases without online channels, making autonomous marketing difficult.
This dynamic began to evolve in the late 1900s and early 2000s. By the year 2000, more than half of all American households had personal computers and digital cameras. Simultaneously, internet content sharing platforms arose, allowing producers to flourish and acquire online audiences (e.g. Blogger in 1999 and YouTube in 2005).
In 2010, a new generation of media-sharing services had appeared. These platforms were both industry-neutral (e.g., Instagram) and vertical/category-specific (e.g., Pinterest, Medium). Many of the vertical-specific platforms introduced new revenue models, such as memberships to certain creator pages in return for exclusive or early access to content and services.
Highlights of the Creative Economy Benchmark Report
NeoReach, in collaboration with Influencer Marketing Hub, conducted significant research to discover the Creator Economy from the creator’s stance. From the data they gathered, the creators’ earning benchmarks as the industry is now has been revealed. Further, using data from polls of thousands of creators in their combined network and one-on-one interviews, NeoReach has uncovered what you need to know to level up your creative game.
Beginning with an economic study, the report took an initial look at startups, venture capital funds, and market growth. Then we look at how creators earn money through their current content channels, as well as how they measure success in the field of content creation. We dissect the platforms for monetization, determining which channels are the most popular, valuable, and have the most followers.
Overall, this report offers a comprehensive understanding of the creator economy as it relates to the creators and their earning potential. This will assist us in determining where it is headed and how we can take it to the next stage.
Here are the notable accomplishments of the creator economy, according to the report:
- Since October 2020, $800 million in venture capital has been committed in creator economy startups.
- Across their sponsored platforms, 46% of creators who’ve been growing a community for four years or more make more than $20,000.
- The entire market size of the creator economy is estimated to be at $104.2 billion, with a significant growth rate comparable to that of the Gig Economy. That’s a trillion-dollar valuation in the future.
- Instagram is preferred by 72% of creators, who say it is their major content outlet.
- 78% of full-time creators (those for whom content creation is their primary source of income) earn more than $23,500 per year, according to the report.
- Sponsorships have a lot of clouts, so don’t overlook them. Branded deals are relied on by 77% of creators, which is three times as much as all other revenue sources altogether.
- There is no clear link between the number of followers and income. There is a half-million-dollar gap in income between the $50-100k and $500k-1M claimed income levels from providing content, but only 1.8K more followers.
NeoReach and Influencer Marketing Hub contacted our network of Creators to gather data on the creator economy, marketing, and perspective toward making money through their material through a time-sensitive, open poll. These Creator survey responses ranged from micro to supernova big creators, demonstrating the breadth of income potential available to them.
Analysis of the Creator Economy Startup
$850 million in venture funding has been invested into the Creator Economy field in startup investments over the last three quarters, dating back to October 2020. The monies raised over the last seven months have aided the development of a variety of firms in the field. With an overall value of $338.8 million invested in fundraising rounds, April 2021 stands out among the other months.
Creator Market Size
The Creator Economy is developing at an unprecedented rate, with an additional $850 million funded the economy since late 2020. We estimate the entire creator market size to be at least $104.2 billion by 2021, with an influencer marketing business of $13.8 billion in 2021 and lots of new startups entering the area. When you realize that the Gig Economy is expected to be worth anywhere from $1 to 4.5 trillion by 2023, and the Creator Economy is following suit, we’ve got some big growth ahead of us — to $1 trillion and beyond! Creators are entrepreneurs in their own right. The sooner you grasp this, the sooner you can take advantage of this rapidly growing market.
All on the market map indicates the creator economy plus more. We didn’t even try to factor in merchandising. The Creator Economy is gaining multi-billion dollar interest from social media sites to other sectors like influencer marketing, as well as the more than 50 million creators themselves and the 500+ new startups topping the scene.
Over 2,000 social media creators were polled by NeoReach and Influencer Marketing Hub to learn more about the Creator Economy, monetization, and sentiment toward making money through their content. The material in this report was gathered from the 2,000+ Creators who completed the survey and whose responses were verified.
An Overview on the Creators’ Earning Power
Depending on the platform and the amount of content done, content production can be full-time or part-time employment. We looked at how much money creators make each year only from their material. Only 0.53% of the creators polled earn more than $1 million per year, but 43 percent of those who responded to our study earn a decent wage of more than $50k per year undertaking content creation work in the influencer marketing field. The ratio of growth, revenue, and engagement reveal the growing control creators possess over their platforms as full-time jobs and passion projects. With experience in the industry, the earning power improves. Across their sponsored platforms, 46% of creators who have been building an audience for four years or more make more than $20,000.
With income being the most crucial indicator of success, creators on four out of seven platforms named engagement rate as their top criterion to success if they had to choose just one. Given the significance of reach for brand building and partnerships, it’s no wonder that engagement is important to 17.11% of creators. Despite the fact that many creators possess accounts on various digital platforms, Instagram is by far the most popular. Instagram has surpassed Facebook as the most popular platform for monetizing content. In comparison to the second and third place platforms, which are 13 percent for TikTok and 9 percent for YouTube, 72 percent of Creators chose Instagram as their primary content channel.
Although it may appear that more is better, only 4% of the creators polled are in the top supernova tier, with over 10 million followers. micro-creators account for about half of all creators, with followings starting at 100k. Engagement, one of the most crucial indications of success, is frequently sacrificed when you have a larger following. micro-creators can run more successful campaigns because their followings are smaller.
Being a Creator: Employed or Not?
Despite the fact that being a creator is not widely regarded as real employment, 70% of the creators polled said they work full-time on social media. That is, it is their principal source of income and the place where they spend the majority of their time to make a living. 78% of creators who consider themselves full-time earn more than the typical bartender.
Social media managers, for example, are one of the most regarded types of content creator. With time and dedication, you will be able to support yourself by creating social media content. Working for four years or more, 51% of Creators earn a livable pay of more than $50,000 per year. After three years, more than a quarter can support themselves, and after six years, only 17% make less than $20,000.
The longer a creator works in the field, the easier it becomes to turn their passion into a full-time job. The majority of folks choose to produce full-time after only two or three years. Almost 84% of creators work full time as Creators after six years.
Sponsorships account for the majority of creator earnings, with 94% of creators posting at least one sponsored post this year. Those that claimed no sponsored posts were either new to monetizing their platforms or relied on methods other than sponsored posts to make money. Regardless of revenue level, 42% of creators said they have 16 or more sponsored posts a month — more than one.
Whether or whether they have superfans, creators are almost certain to communicate with their fans on a frequent basis. In fact, 91.7% of creators polled said they interact with followers several times every day. This is the kind of interaction that creates close-knit, trustworthy groups, which is why creators are so important to campaigns.
Income & Monetized Content
When you separate creators by their annual income, you’ll notice that there isn’t a clear link between fan numbers and revenue. There is a half-million-dollar gap between the $50-100k and $500k-1M income brackets, but just 1,800 more followers.
Although 42% of creators generate over 16 monetized posts per year, those with 3x the number of followers post less frequently, averaging 11-15 sponsored posts each year. However, it is also true that the greatest incomes have smaller followings in comparison. Finally, all of this evidence confirms the creator’s worth and their relationship to an audience.
Sponsorships have a lot of power, so don’t overlook them. Brand deals are relied on by 77% of creators, which is three times as much as all other revenue sources combined. Fortunately, the dream and reality are very similar. 70% of artists say that in an ideal world, brand agreements would continue to be their primary source of income. However, replies for ad share revenue increased by 8.5 percent, indicating that some authors would prefer to rely on a less active kind of funding.
We feel that influencers have a greater impact than celebrities and athletes as they’re more relatable and so have a more engaged audience. So, why pay a celebrity $50 million for a transaction when that money might be shared among influencers and gain a bigger impact? Hence, let Ninja Outreach guide you into finding the perfect leads and influencers for your business. Contact us now!