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What have I learned from the creator economy in the Web3 era?

By: Ashley R. Cummings

Source: hashtagpaid.com

In recent years, while Web3, NFT, DAO and encryption technology have flourished, the creator economy has also continued to develop. In the past year, I have read hundreds of articles on influencer marketing, social advertising and the creator economy, interviewed several professionals and newcomers, and actively discussed the trends and predictions of the creator economy in the online community , and summarize the findings below.

Response to COVID-19 drives creator economy growth

The outbreak of the new crown epidemic has become a turning point in the creator economy. There are countless articles discussing how the new crown epidemic can promote the economic development of creators, and many analyzes also provide data support.

Payments platform Stripe found that there will be a 48% increase in the number of creators in 2021 compared to 2020.

Stripe also reports that this number represents only a small fraction of the overall ecosystem. Here's a chart from Stripe that can help you visualize how the creator economy has grown over the past few years.

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Source: Stripe

Is there any other evidence?

Over the past 2-3 years, there have been signs that the creator economy is the present and future of commerce.

We have seen:

  • Strong growth for Instagram and TikTok

  • Venture capitalists invest heavily in individual web influencers and creator tools

  • Restructure social platforms to support creators

  • E-commerce leaders like Amazon open up space for curated collections

  • Monetization tools for creators, such as Buy Me A Coffee, Tips on Twitter, Creator Shops, etc.

  • The rise of decentralized projects (e.g. Dao, NFT, cryptocurrencies, etc.)

  • and more

We have also experienced a dynamic shift in economic power, from dominance by large corporations to greater autonomy for employees during The Great Resignation.

Thousands of people have given up traditional jobs to become creators, start their own companies, or move to more suitable jobs with better benefits (e.g. remote work opportunities, higher wages, etc.) .

Yes, the world has changed dramatically during the pandemic, ushering in a new era of creativity. However, we need to be aware that:

No credit can be taken for the COVID-19 pandemic. Instead, it is the human response to the outbreak that deserves attention.

Over the past few years, creators have continued to improve, showing incredible resilience, innovation, and creativity—this is what is driving the rapid growth of the creator economy.

3 Things to Learn From Creator Economics

1. Gen Z plays an important role in the creator economy

There have been more "how to market to Gen Z" articles this year than I can count. I even wrote an article focusing on how brands can reach Gen Z through live events.

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This explains why marketers are obsessed with Gen Z. Generation Z is the generation that has recently started earning and spending money.

Gen Z is unique in that they are the first digital natives. They grew up with their mobile phones in their hands. They spend a considerable amount of time online.

Data Display:

  • 74% of Gen Z spend their free time online

  • Generation Z averages more than 8 hours a day online

  • Gen Z consumers are twice as likely as millennials to shop on mobile devices

If you want to reach Gen Z, you have to be willing to forgo traditional digital marketing methods — which may work for older millennials, Gen Xers, and baby boomers — to explore new territories.

In other words, you have to spend your time where Gen Z lives (creator platforms and online communities like TikTok, Roblox, Instagram, etc.). You have to market on these platforms to resonate with Gen Z.

From my experience interviewing Gen Z, this doesn’t mean investing in well-crafted video ads or branded content.

Instead, put your money on the creators.

Gen Z and millennials report time and time again that:

  • Follow their favorite creators religiously on social media

  • Make purchases based on creator recommendations

  • Trust individuals over brands

  • Trust small influencers instead of big stars

Matthew Pierce from Versus Systems responded in our interview:

"There's a huge difference between fans of a YouTube or Twitch creator and fans of a TV or movie celebrity. There's a whole generation of people who don't know who Angelina Jolie is, but choose to know about a YouTube creator. That's Because they feel connected to these creators."

While investing in creator partnerships is the way to reach Gen Z, younger generations aren’t the only audience actively participating in the creator economy.

Kaleigh Moore put it this way:

“In the larger creator economy, we have the opportunity to reach consumers of different age groups, which far exceeds younger consumers, especially millennials and Gen Z who have money to spend.”

Maria West added:

"Millennials are highly invested in the creator economy. We've been in the 'traditional' economy for a minute, burned out, and looking for new ways to make money and express the skills/passions we've learned over the years .”

Yes, Gen Z plays an integral role in leading the creator economy forward, but all generations can benefit.

2. The Creator Economy Changed Marketing Forever

Einstein once said:

"You can't use an old map to explore a new world."

While Einstein probably didn't want that quote to mean anything in modern marketing, it rings true in today's new economy.

Over the past few years, we have seen dramatic changes in technology and consumer trends and preferences.

Some of these changes include:

  • Increase the popularity and financial support of the creator platform

  • An influx of new creators and influencers

  • Rapid growth in commerce and online consumption

  • Increase the time and money we spend online

  • A new approach to decentralization

Consumers today live in a whole new world (a hyper-digital one) and following the old marketing map is not appropriate.

So what worked in marketing three years ago may not have the same effect now. Conversely, something that might not have worked three years ago can go viral overnight.

for example:

1/ Hello Fresh

You've seen HelloFresh user-generated content (UGC) ads while watching Hulu. Ads from these creators are shaky, unpolished, and raw.

It's like your mom took a home video of a cool new cooking service she loves and sent it to your inbox. But instead, these ads appear on the most popular OTT streaming platforms.

Consumers today eat these ads for breakfast. Why? Because these ads are real and trustworthy.

Trust is something we’ve held dear since 2020 — a year synonymous with the COVID-19 outbreak, strange cultural events like virus and vaccine rumors, new media adventures spreading extremist ideas, and more.

The roots of distrust run deep, so it's understandable why consumers don't take marketing messages at face value.

This explains why consumers trust content that is honest, familiar, and close to home.

Here's why we like:

  • TiktokTrends

  • low-volume video

  • User Generated Content

  • different voices

  • fresh faces

That's why we follow our favorite creators—creators so ordinary they feel like trusted friends, or younger siblings, or the neighbor's favorite lovable grandma.

Consumers may not trust politicians, big media, and mainstream brands, but—

We do "mostly" trust each other.

In today's robust creator economy, brands that understand this will win.

2/ Mint Mobile

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Ryan Reynolds and the Maximum Effort team understand what contemporary users want to see in advertising.

I love what Charlie Naus, co-owner of Gen Z agency Carson+Doyle, told me:

“Gen Z loves self-deprecating campaigns. I’m not a sociologist so I can’t tell you why, but it’s an innate thing we all love. We like to make fun of ourselves and each other in a lighthearted way. For anyone trying to reach Gen Z, success is rooted in authenticity, especially at the brand level. We all grew up in the age of Instagram, and for a long time, Instagram stuff was the norm. For example , we’ve seen so many filtered and polished images that are outdated for us. We want to see real content from real people.”

Whether Ryan Reynolds is a real person or a Greek god is up for debate, but for the sake of argument, let's stick with real.

Mint Mobile's ad capitalized on exactly what Charlie had to say. Here's a particularly interesting example of an ad by Ryan Reynolds, Mint Mobile - presented in close-to-slide form.

I bet this ad would have been just as successful if it had run before the creator economy, because we all love Ryan Reynolds. But it hits home with modern audiences in other ways, too. This ad:

  • Powered by a web guru

  • Laugh at one of our favorite stars and his movies

  • funny

  • related

  • Insufficient production (the sound is not good enough, the picture is even a bit like PPT)

  • short and sweet

  • absurd

If anything, it offers a great model for brands stuck in old patterns looking to try something new. Maybe a new creator-led ad with some self-deprecating content.

In many popular NFT marketing campaigns, we can see the use of similar self-deprecating tactics.

3. The creator economy is booming, but still shaky

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Source: Vibely

Creators are valuable to society and brands. Creators are artists who advocate for diversity, inclusion, kindness, and social change.

Many creators play tiny, but still vital, roles.

Creators are often an easy choice to help consumers overcome decision fatigue. For example, I don't want to spend 800 years researching new fashion trends. I'd rather browse TikTok, see what my favorite fashionistas are wearing, and make a purchase. This is very helpful for me. As a shopper who hates shopping, I like this.

Creators mean something to us, whether it's influencing us to do something positive, or helping us make decisions about small things like shopping. There is no doubt that we need them.

While the creator economy has doubled since 2019, data shows that 90% of creators are burning out.

Vibelely released a report with shocking statistics showing that creator burnout is the new normal. According to the report, the causes of creator burnout are:

  • Modify algorithms frequently (65%)

  • Difficulty earning a living (59%)

  • The mouse wheel effect of content creation (51%)

  • Follower count anxiety (51%)

  • Hate and cyberbullying (42%)

  • Imposter Syndrome (29%)

  • Strongly disagree (19%)

Here are some of the findings I've learned about managing creator burnout through my research.

1/ Avoid annoying algorithm changes

I can't count how many times I've heard creators complain about the frequent social platform algorithm changes (especially on Instagram). Creators rely on impressions to attract new followers and secure brand partnerships.

When social platforms change their algorithms, it can be a headache for creators to figure out how to "beat the algorithm" and get their content seen.

Thankfully, the growth of the creator economy has made it possible to sidestep algorithmic reliance entirely.

One way this manifests itself is through the help of venture capitalists. Last year, venture capital firms pumped $1.3 billion into the creator economy.

Some venture firms have invested directly in internet influencers like Mr. Beast and Marina Mogilko. Others have invested in platforms that make it easier for creators to grow and monetize elsewhere, off the main social network.

Both VCs and entrepreneurs recognize that "beating the algorithm" is not a sustainable business model and burns out quickly.

The amount of money invested in creator tools, and the effort put into generating personal income, makes it possible for creators to focus on content rather than gaining enough impressions on Instagram to sustain their personal brands.

Venture capital investment in the creator economy is still very young, and we will wait and see what interesting things will happen in the future.

2/ Make a living through meaningful brand partnerships

Top creators like Eleonora Pons, Charli, D'amelio, Addison Rae and Zach King have become celebrities.

The fans of these Internet celebrities are very sticky, and they can charge more than 100,000 US dollars per advertisement.

However, smaller creators don’t have the luxury of these mega-influencers. Therefore, it is a difficult challenge for "moderate creators" to maintain income based on their influence alone.

However, it is not hopeless.

While micro-influencers are not as influential as mega-influencers, they are still very valuable to brands.

Micro-influencers create top-notch content and have loyal and highly engaged followers.

An article by Kelly Ehlers in Forbes claims that micro-influencers have stronger relationships and trust with their fans, which serve a more niche audience. This is better for brands because it provides a very targeted audience.

Buffer also supports this statement. Buffer reports that recent data shows that micro-influencers drive the best results for brands, including more clicks and lower ROI.

So, how can brands support creators and produce impressive results? That is to cooperate with small Internet celebrities.

This is a win-win outcome. Micro-influencers can get paid and have the opportunity to grow more organically, and brands can gain meaningful niche exposure among their target audience.

3/ Focus Anxiety + Cyberbullying + Imposter Syndrome

There exist many ways to protect and support creators, such as investing in individual creators, growing startups that reward creators, partnering with profitable brands, and more.

However, creators must also protect themselves from burnout.

Creators of all kinds have told me how they set boundaries to protect their mental health.

Here's how these creators suggest avoiding burnout:

  • Make a schedule – Make a schedule for creating content and taking breaks. Taking a break can mean not engaging with social media for a few hours each day. It could also mean quitting social media altogether.

  • Set boundaries and breaks - you won't be able to respond to every comment, text and email right away. Set specific times for replying and not replying to emails. In addition, set working hours and rest periods and strictly abide by them.

  • Be true to yourself - create content that only you can craft and produce that brings you joy. Also, consider getting involved outside of social media.

  • Find a Supportive Circle - Supporting others emotionally is not your thing. Find safe spaces with friends, family, and fellow creators.

  • Find sustainable ways to scale and monetize - consider outsourcing tasks that take a lot of time but don't bring joy (e.g. editing, production, creative, etc.) and find new ways to monetize your content (e.g. community members, brand cooperation, etc.).

Also worth noting is the role we play as content consumers. Celebrities, creators, influencers are real people who put their creative energy out there for all of us to enjoy. Don't be so rude.

Where is the creator economy headed?

The creator economy has grown significantly since the start of the COVID-19 pandemic. Recent reports show that there are now more than 50 million independent creators worldwide, and the creator economy is worth $20 billion.

What is particularly interesting is that the creator economy is still in its early stages of development. But we've seen enough innovation that it's expected to grow to over $105 billion by 2022.

The growth of the creator economy is exciting to say the least.

It opens the door for people to leave stifling jobs, add their unique voices to meaningful conversations, promote their art, and gain financial independence. Now, we have recognized more and more creative creators in the fields of Web3, Metaverse and NFT.

This has also changed the lives of marketers and brands, as there are now a variety of ways to reach new audiences and increase sales.

While the creator economy is only expected to grow from here on out, it’s also worth remembering that it’s fluid and creators can get overworked. We must take care of the people who make it happen.

The creator economy will only continue to evolve, but also remember that it is still fluid. Creators can also be overworked. We must focus on the creators who make the creator economy thrive.

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