Creator Marketing Gets More Competitive, Complicated, and Confusing | Behind the Numbers

Marcus Johnson (0:00)

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Hey, gang, it's Friday, March 20th. Max, Minda and listeners, welcome to Behind the Numbers, an EMARKETER Podcast made possible by Rokt and 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 Willens.

Max Willens (0:43)

Yo.

Marcus Johnson (0:43)

And we're also joined by senior analyst living in New York, Minda Smiley.

Minda Smiley (0:47)

Hello.

Marcus Johnson (0:49)

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's 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 influence of people today. Max, let's start here. How much money are creators making these days?

Max Willens (1:57)

Well, I'm glad you asked, Marcus. 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, right? So I spent a little bit of time in the report talking about how what I call fringe revenue sources that could include things like affiliate marketing payments or subscriptions to their direct content or services or tips. Those revenue streams are growing really, really fast. So we think that 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 tidy comparison for that number, right? I mean, when you're talking about media and advertising, it's really, really useful to anchor a number. When you're routinely talking about billions and millions or even trillions, you can quickly start to go like, well, what are we even talking about?

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 money spent on advertising 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.

Marcus Johnson (4:22)

So, Max, as you mentioned, sponsored content is about 12 billion of the over 20, 21 total. Then you've got, so that's the biggest piece, then you've got 5 billion for platform payouts. 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?

Max Willens (4:49)

Well, I think that affiliate is probably 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 originally lived in maybe the brand or PR side of an organization where people were thinking about influencers as an easy way to generate awareness or reach or earn media value was a good kind of legacy metric for 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 where they would say, I do a post that talks about how much they love a kind of eyeliner or a kind of a workout gear and then just being able to say, and because I love you guys so much, I got a special code that's 20 percent off. You can find it in my bio or whatever. That has proven to be quite effective across lots of different industries. What we've seen is that creators have really gone from this kind of object of curiosity to being this 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's raised its profile. But it's also made this industry a lot more complicated, as I said, where instead of once upon a time just using creators, maybe you try to find one or two really famous people on Instagram to talk about your brand or your products and you 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 things that can drive sales or incremental foot traffic.