← Behind the Numbers: an EMARKETER Podcast
Behind the Numbers: an EMARKETER Podcast
Creator Marketing Gets More Competitive, Complicated, and Confusing | Behind the Numbers
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- [00:00]
A
In today's economy, every ad dollar counts. That's why performance marketers are turning to ROKT ads to reach 1.1 billion unique customers globally in the transaction moment when they're completing a purchase online. You only pay when customers engage. Learn more@rokt.com eMarketer that's rokt.com eMarketer. Hey, gang. It's Friday, March 20th. Max, Minda and listeners, welcome to behind the Number, the marketer podcast made possible by rokt. I'm Marcus and joining me for today's conversation, we have two of our social media experts. We start by introducing our principal analyst calling Philly home, it's Max Willins.
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B
Yo.
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A
And we're also joined by senior analyst living in New York, Minda Smiley.
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C
Hello.
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A
Right, folks, today's fact. When Harvard University was founded in 1636, calculus didn't exist as a subject yet because Mr. Isaac Newton and Mr. Gottfried Wilhelm Leibniz hadn't invented it yet. I wish I was at Harvard then. I wasn't at Harvard at any point, but if I had to be at Harvard, I wish it was before calculus existed. I bet students were livid. When they come back, they're like, oh, this year is going to be so easy. And then Harvard's like, we're doing calculus. And like, what? Oh, God, why did they have to invent this? It's probably a good thing. Anyway, today's real topic, creator marketing gets more competitive, complicated, and confusing. All right, so we're talking about creator marketing influencer people today. Max, let's start here. How much money are creators making these days?
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B
Well, I'm glad you asked, Markus. So this is, I should say this report, which we're going to be chatting about today, is built largely on a forecast that we do once a year that looks specifically at what we describe as social media creators. And by our estimation, those folks will pull in over $21 billion in revenues this year. A lot of that. Most of that money, I should say, comes from two sources. It comes from the sponsored content that we think of when we think of influencers and creators. A second large pot comes directly from platforms themselves in the form of payouts. But this is a sort of class of creative class of people that's now making money from lots of different sources. I spent a little bit of time in the report talking about what I call fringe revenue sources. That could include things like affiliate marketing, payments or subscriptions to, you know, their direct content or services or tips. Those revenue streams are growing really, really fast. So we think that, you know, that pot of money is going to grow by over 30% over the next two years. So $21 billion is the headline number. One thing that I think is so interesting about writing about this space is that it's really, really hard to come up with a kind of a tidy comparison for that number. Right? I mean, when you're talking about media and advertising, it's really, really useful to kind of anchor a number. You know, like when you're routinely talking about billions and millions or even even trillions, you can quickly start to go like, well, what are we even talking about? And, and that creator number, like I said, doesn't really have a tidy comparison, right? Like, you can't really compare that number to the amount of money that just gets spent on advertising on social media, for example. That doesn't really make any sense. It doesn't really make sense to compare it to, you know, money spent advertising on, on video or any other particular channel. The closest thing I came up with, and I've referenced this in presentations I've given, is the amount of money that goes to web publishers, which is something that we track in our programmatic forecast. But even that feels kind of incomplete. But yeah, that's one thing that I think is so interesting about this space.
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A
So, Max, as you mentioned, sponsored content, it's about 12 billion of the over 20, 21 total. Then you've got the biggest piece. Then you've got 5 billion for platform payout. So sponsored content 12, platform payout 5. And then you've got a bunch of, as you call them, these kind of fringe revenue streams. Of those, which one do you find most interesting?
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B
Well, I think that affiliate is probably the, the best and most obvious answer. Right? So, like, one of the things that's really important to understand about the way that the creator economy has evolved is that it sort of grew out of this thing that, you know, originally lived in, you know, maybe the, the brand or PR side of an organization where, you know, people were thinking about influencers as an easy way to, you know, generate awareness or reach or, you know, earned media value was a good kind of legacy metric for, you know, creator and influencer marketing overall. But over time, organizations started realizing that because of the kind of trust and credibility that so many influencers and creators had with their audiences, that that would make affiliate, or rather would make creators pretty good affiliate partners, right? Where, you know, they would say, I do a post that talks about how much they love, you know, a kind of eyeliner or, you know, a kind of workout gear, and then Just being able to say, and, you know, because I love you guys so much, I got a special code that's 20% off. You know, you can find it in my bio or whatever. And that has proven to be quite effective across lots of different industries. And so what we've seen is that creators have really gone from this kind of, you know, object of curiosity to being this, you know, central area of focus within the affiliate marketing ecosystem, which has been really good for creators. Obviously it's been good for the affiliate industry because it sort of raised its profile, but it's also sort of made this industry a lot more complicated, as I said, right? Where instead of once upon a time just using creators, you know, maybe you try to find one or two really famous people on Instagram to talk about, you know, your brand or your products, and you, you know, measure how many likes and retweets and maybe website visits you get out of it. Now, all of a sudden, really sophisticated brands are thinking about creators as sources of raw material for media investments. They're thinking about them as spokespeople. They're thinking about them as, you know, things that can drive sales or incremental foot traffic. And that's obviously really exciting. But, you know, measuring and managing and coordinating all of that stuff is quite challenging in a way that, you know, most brands are still, still wrestling with because this is again, still kind of a rapidly emerging but still quite nascent area of media and advertising.
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A
Minda Max had this good quote in his piece. Advertisers once focused their efforts on partnerships with influencers who boasted big follow accounts. But as you point out in the research, influencers with fewer than 20,000 followers accounted for nearly half, 46% of the over $12 billion spent on influence marketing in 2026. Five years ago, that share was 19%. So from 19 to 46% over those years, in terms of the number, the amount of money going to influencers, creators with less than 20,000 followers each. Minda, what's your take on what changed here?
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C
Yeah, I mean, I think there are a few factors that are really driving this. I mean, I think the first and the biggest, the one that gets talked about the most is this idea that we're in like this kind of post follower era. That's a term that's been being thrown around. And I think it's largely because of the social platforms, algorithms, right? And the fact that, you know, on Reels, on TikTok, on these major social platforms, on YouTube shorts, even, you know, the algorithms are able to just Kind of surface content that's really relevant to you and your interests in a way that, you know, just wasn't happening five, six years ago. And so, you know, I feel like I'm always using examples from, from my own life on this podcast. But like I'm, I'm, I'm a, I'm a toddler mom. And like, I feel like it's incredible how, how even like within toddler mom, like I feel like I'm getting, I'll see videos of like I'm a mom of a 22 month old and it's like, oh, I am too. Like, they, they're able to really figure out kind of exactly what stage of parenthood you're in. And then, you know, and then that doesn't even account for like geography, you know, are you a New York City toddler mom? So how niche can kind of get. And so that, that's definitely part of it. And I think the other part too is just the fact that as the creator economy has matured and gotten more sophisticated, it just has opened up more opportunities for creators to get more niche themselves. Right. Like, it's not just so much a few big names or just, you know, beauty or whatever, you know, whatever kind of was popular even a few years ago. Now you can build an entire profile around like a kind of a more niche hobby or the city you live in, whatever it might be. And you can gain a pretty engaged following that way. Again, it'll be small, but ideally it'll be a more engaged and more tuned in audience. And so those two, those two trends are related, but I do think they also are distinct as well. Max, I'm curious if you, if you kind of agree on that general take as well.
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B
Yeah, no, 100%. I mean, I think that to your point about the proliferation of niche creators, they've proliferated because it's possible to sort of, you know, build a sustainable career or living even with a modest following. Right. I mean, one of the things, the stats in that report, which I wish I could say we built it ourselves, but I got it from reading through IAB research, is that the number of people in the US that make even just like the average household income from working as a creator has 7x over the last five years. It's now over a million people, I think, or rather over one and a half million people. And just a few years ago it was under 200,000. And so the reason that that's happening is not because there are one and a half million people like Kim Kardashian or Charli D' Amelio who have hundreds of millions of followers on TikTok. It's grown like that because there are instead tens or hundreds of thousands of people who are, you know, really, really homing in on a specific audience, a specific topic, a specific community, and just, you know, really laser focused, serving those people and engaging and entertaining them and in so doing, you know, making a living for themselves. And so the other thing too, I would add, is that it's also become a lot more possible technologically to find those people. Right? Like in the sort of 1.0 version of this, you would maybe just like, you know, find some leaderboard of the people that had the biggest followings on Instagram or TikTok or YouTube and go, all right, let me get in touch with our business managers. But, you know, now you can use all manner of software, whether it's, you know, operated by the social networks, by affiliate marketing networks or even generative AI, right? Like generative AI has a very complicated role that it plays in creator marketing. But one thing that everyone seems to have agreed on is that it's actually really quite good at finding creators that would be good fits for, you know, a brand's campaigns, right? Where you can just sort of say, I need to find a creator who, you know, only talks about, you know, their life with a 22 month old toddler living in New York City. And it can, you know, in a matter of seconds, you know, spit up, you know, quite a few really viable candidates. And so you add all that together and it's not hard to understand why the dollars have migrated toward this slice of the creator community.
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A
You mentioned that number from the iab, the number of full time creators increasing nearly sevenfold or more than sevenfold. 20, 20, 2024. The question I had was if you were thinking of reasons as to why creator content doesn't break through as easily as it used to, as you point out in the research, how much of it is that? How much of it is. There's just so many more creators. And what else would be in that pie chart of reasons?
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B
When I was thinking about this, to me, increased competition is the biggest reason, right? Like if you go from a pool of the people making a living, don't tell the full story, but it's a good, you know, kind of point of comparison. If you go from a competitive pool of 200,000 to a competitive pool of one and a half million, that's going to make it harder to break through. And the second biggest reason I would say is kind of plateauing time spent with social as a whole, right? Where for years and years and years, one of the things that social platforms could bank on was the fact that it's seemingly every year, without fail, the number of people that join their platforms continue to go up and the amount of time that they spent in aggregate, you know, on their content would also go up. But if you look at the, you know, forecast that we have around time spent with social networks as a whole in the United States, and also growth of users, you know, joining social platforms, those numbers are both beginning to plateau. In some cases they're actually declining, depending on the network. But so all of a sudden you've got kind of less incremental space for these ad spots or these just eyeballs to land on this creator content, and you've got many, many, many, many, many more people all vying for those same seconds of a user's time. And those two things are, along with the kind of post follower moment that Minda alluded to, all those things are sort of blending together to make it so that creators, while they remain, you know, still quite effective. I want to underline that it's not like, you know, this is not like operating a brand page on Facebook in like 2013, where all of a sudden you just get zero organic reach at all. Like, these are still highly engaging, highly attractive sources of content in the eyes of consumers and also social media algorithm. But it's just you're not getting quite as much easy organic reach as you once did.
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A
You talked about the focus moving away from creators with huge followings to ones with smaller, more niche communities. And in the piece you have this quote. In shifting their creator strategies from reach to engagement, marketers have created a problem with few straightforward solutions. How so?
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B
So I think a lot of this is stuff we've talked about already where there's two, two things that are sort of fueling and reinforcing the difficulty here. One is that as the budgets have migrated toward people with smaller social followings, what that means is that you now have to manage more of those relationships, right? Where, you know, if five years ago, maybe you were working with half a dozen creators that you were working with principally because of how much reach they could drive on social media. If you then pivot to a situation where instead of working with six creators, you're working with six dozen of them, you still have to hit your numbers, right? Like you're. You're still going to have to show your boss and your boss's boss that you're reaching the same number of people, but if you're using smaller people, you have to work with more of them to get the same numbers, even if that. Now part of the reason that people do this is because that those smaller people are beneficial in lots of other ways, right? Like that hyper specific community that those creators work with is going to find the content maybe more engaging, more resonant. It's maybe more likely to cause them to take actions like buying your product, like visiting your website, like visiting one of your stores. The content that they produce is maybe better for distributing across social or across other channels, but it just means a lot more work, right? And to compound all of that still further, there's just kind of a skills or expertise gap that opens up there too, right? Where if maybe you show some initiative and you work at a brand and you, you go from being someone in your PR department to the, you know, head of creators at your brand, the expertise that you might have is in, you know, driving reach and driving mentions on social media. But all of a sudden you now have to be an expert in, you know, digital media measurement, in affiliate marketing, in E commerce, potentially in, you know, measuring and working with your store team to measure visits to your stores. And that's finding someone who is just fluent in and you know, adept in all those spaces is pretty difficult and pretty unusual.
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C
I also think it's important to note that yes, it's more work and it's more work with like people and people can be hard to work with, right? They all have their own agendas, they all have their different ways of working, they all have their own rates and the ways they want to be paid or maybe ways they don't want to be paid. So yeah, I mean, you're dealing at the end of the day like creators are humans and that is inherently messy. So it is kind of this problem of trying to scale and optimize while dealing with like, you know, you're dealing with, of course there's contracts and managers and there's like, you know, systems in place. But at the end of the day like you are, you are relying on like people, not, not really companies to, to spread the message or to work with your brand. So I think that can be really tricky as well when you're trying to scale these things.
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B
I think that's a really, really important thing for you to, for us to call out here too, right? Is that like one of the things that makes this such an attractive spending area is that kind of humanness and authenticity and to What Minda was saying, like scaling or building something like that is very, very different from, you know, deciding, oh, hey, you know, programmatic video works for us. So let's just up the budget by 25% and, you know, find more inv on one or two more channels or spend more money on YouTube. Each time you decide to grow or build something, you need to literally forge a new human relationship with somebody who, based on what we've all been discussing, is probably pretty busy. And so that's naturally and necessarily going to take time and require some effort. So I think it's a really good call out.
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A
When we were talking about kind of what to think about what to cover for this episode, Max, you said one of the biggest findings or kind of takes from this research was this take on social amplification spending, surpassing creators sponsored content revenues by 2028. Tell us what's going on there.
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B
This, to me, was something that I thought was just totally fascinating. I think this is the first year that our forecasting team was able to break this out. But basically because of a lot of the stuff we've talked about already, like the declining reach, the change in the way that creator content travels around the Internet, the general attractiveness and effectiveness of creator content as kind of raw creative material, brands are now having or have now decided to spend a lot more money distributing that content on social networks. And the sort of instinctive reaction some people have when they see this chart is they think, oh, oh, this is social networks playing the same, running the same playbook that they ran 10 years ago with brand pages and just choking off all the oxygen and basically forcing brands to pay to reach their audiences. And that's not really what this is. There is a, maybe a tiny droplet of that in there. But the main thing that I think this is all about is that we live in an era that a lot of media agency people would describe as one where creative is the new targeting, where brands need lots more kind of raw quality raw material that they can use for their campaigns. And creator content has proven over and over again to be a really effective source of raw material for that. And so that means, you know, maybe you get some really wonderful, charming piece of content from a creator that's, you know, like a couple minutes long. You know, you can work with your own social team to cut that into, you know, 5, 10, 15 different, shorter versions, might be calls to action that you can distribute and use to target specific audiences or to run a fully automated campaign on a social network. And to me, that's just sort of like wringing more value out of something that you've already paid for. But the scope and scale of it was something that really surprised me. And so that was why I highlighted it when we were discussing using this as an episode topic.
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A
Minda, what are some of the most popular social platforms for influencer marketing today? Has it as the ranking changed, what does it look like in terms of where most of the influence marketing is taking place?
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C
Yeah, I mean, I think it really is the usual suspects. I think we tend to, when we look at data across, when we're looking at data on this topic, I find that Instagram and TikTok usually tend to be pretty neck and neck in terms of spend and creator interest. We are seeing, you know, of course, YouTube and YouTube shorts specifically. We're seeing some, some more interest there. And I do think TikTok finds itself in a bit of an interesting spot. I mean, it's still incredibly popular. It's like pretty much synonymous with creators and influencers. But I do think with everything going on with the ownership change and just kind of like some general TikTok fatigue, we're even seeing, I think people just kind of, we're seeing this kind of bigger trend play out. Where I feel like people are trying to get off social media to what extent they actually are is a different story. I've talked about this before on past episodes, but I think considering how much time people do spend on TikTok, I do feel like they also want to pull away from it the most, if that makes sense.
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A
Max, one of the things you mentioned in your piece in terms of some of the, the biggest challenges with, with the space is measurement. What is the, the biggest challenge or a couple of the biggest challenges with greater marketing measurement?
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B
Yeah, I think there's kind of a bunch of different things that you could, you could point to. I think though, that maybe if we're going to kind of confine it to one, the biggest is just to sort of get all of the data that a creator campaign might throw off to get it all to flow to the right people in places. Right. Like there's a version of this where maybe a certain kind of creator campaign could involve gathering data from a couple different social networks, a video platform, maybe a CTV platform, an affiliate network, possibly a, you know, third party measurement firm that you work with to measure, you know, footfall traffic or, you know, in store visits and, you know, pulling all of that together and tying it not just to the specific creators and to the specific products, but, you know, also to user data, especially if you're trying to, you know, incorporate that into first party data that you have about your customers, that just becomes a huge headache really, really fast. And it's the sort of thing also that is especially challenging if you're, if you're doing or executing this campaign with, you know, multiple agencies assisting you with it. Right. Like historically, an agency will just kind of tell you how it went at the end and give you some results. But if you're trying to sort of build a corpus of data around, you know, which creators really resonate, what kinds of products they drive really strong sales in, which audiences, it's, you know, their content really, really resonates with, that kind of working relationship might not necessarily be adequate. And so I think just generally like getting all of the disparate trickles of data to flow into the right place so that you can start, you know, making sense of it is one of the biggest ones at the moment.
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A
Minja, what's for you? Everything we've talked about. Anything else in Max's research, Anything else you've seen? What do you think is one of the biggest takeaways for advertisers when it comes to creative marketing at the moment?
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C
I would say I think the big thing to focus on is even with all of these challenges and roadblocks, I still think it's definitely an area that marketers should continue investing in and continue kind of hammering away at finding ways to make it work. I do think it's still a really powerful channel, so. And even as we do continue to talk about more of the challenges that come with it, I would say, like, that shouldn't really detract from the fact that it is incredibly impactful, in my opinion.
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A
That links me back to something that Max said, which I used as the, the kind of title of the episode at the beginning, which was when I said, Max, what should we talk about? He said, creative marketing is getting more competitive, complicated and confusing, but still, still impactful as Minda just, just outlined. An excellent note to end on. Thank you guys so much for hanging out with me today. Thank you to Max.
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B
Always a pleasure, Marcus. Thank you.
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A
Yes, indeed. Thank you to Minda. Thank you, of course, of course. And thank you to the production crew. In this case is just last. And thanks to everyone for listening into behind the Numbers new marketer podcast made possible by Rox. We'll be back on Monday looking at social media's role in head health care decisions. Happiest of weekends.