A Comprehensive Guide to the Creator Economy and Its Benefits for Brands

For creators and influencers, the creator economy offers the opportunity to sustain themselves and expand their followings. For brands, partnering with trusted creators enables you to tap into highly engaged audiences and achieve record sales numbers. Understanding the creator economy and its future can set you up for lasting success.

By OLIVIA SAVAGE

Senior Marketing Strategist, Creator Growth and Engagement, impact.com

Being an online creator is no longer a niche career. Thirty-one percent of social media users discover new products through influencers. According to a report by Adobe, the global estimate of total creators is around 300 million.

By 2027, the creator economy could be worth $480 billion, according to Goldman Sachs' research. The creator economy encompasses a wide range of individuals, including content creators, influencers, YouTubers, podcasters, bloggers, artists, musicians, writers, and more, who earn income through their online content and engagement with their audience.

Key Takeaways

The creator economy is a modern economic landscape where creators leverage digital platforms and technology to produce and distribute content that promotes products and services directly to their audience.

- A successful creator has three main characteristics: authenticity, expertise, and entertainment.

- While some creators work as a side hustle, others can build lucrative careers spanning years.

- Many creators find success by focusing on specific niches or becoming subject-matter experts.

- Trends in the creator economy include creators as equal partners, the rise of short-form content, and creators taking ownership of their platforms.

Creators Make a Significant Impact on Purchasing Decisions

A creator or social media influencer is an individual who has established a significant presence and following on various social media platforms such as Instagram, YouTube, TikTok, blogs, and others. They can impact their followers' opinions, behaviors, and purchasing decisions due to their credibility, expertise, authenticity, and relatability.

Creators can range from micro-influencers with a smaller but highly engaged following to macro-influencers with a massive reach. A subcategory is user-generated content (UGC), which includes any content, such as text, images, videos, reviews, or other media, created and shared by regular users or consumers of a particular product, service, or platform.

The impact of this content is significant because it can shape trends, popularize products, and even drive social change through their online presence. However, it’s important to note that the influencer landscape is dynamic and constantly evolving, with regulations and industry standards varying across different regions and platforms.

Creators Evolve from Side Hustles to Full-Time Careers

Creators don’t fit into narrow categorizations. With online spaces and trends evolving rapidly (56% of consumers say one of the main reasons they follow creators is for entertainment), the term “creator” is flexible by necessity.

Balancing with Other Careers

While some top performers make millions of dollars a year, experience matters. Eighty-five percent of creators with less than one year’s experience earn under $25,000 annually. Forty-seven percent of creators with more than four years of experience earn more than $25,000 annually.

Content creation is a lucrative side hustle for many people—even if it’s not full-time yet. The rise of “CareerTok” shows how thousands of people balance being a creator with their day jobs. These TikTok creators started a trend by posting about work/life balance, daily routines, career steps, and interview tips.

Blurring the Lines

While traditional media pushes people into a few large categories like actors or musicians, many digital creators succeed by blurring these lines. Hank Green, for instance, has built a large audience across multiple platforms through YouTube vlogs, best-selling novels, musical albums, and viral science-related TikTok videos.

Owning the Niches

Other creators find success by focusing on particular niches—posting insights and deep dives into specific topics. These creators can stand out and quickly gain traction on social media by differentiating themselves from the crowd. Isabel McGuire is a perfect example: this TikTok-famous electrician has almost 200,000 followers by posting content about her everyday work and career experience.

The Inner Workings of the Creator Economy

The creator economy refers to a modern economic landscape where creators leverage digital platforms and technology to produce and distribute content that promotes products and services directly to their audience. This concept has gained significant traction with the rise of social media, content-sharing platforms, and online marketplaces.

Key Attractors to the Creator Economy Include:

- Independence: Freedom to produce content or offer products/services on their terms, without the need for traditional gatekeepers or intermediaries.

- Monetization: Making income through various channels, such as advertising, sponsorships, subscriptions, merchandise sales, crowdfunding, and more.

- Direct Audience Engagement: Building and engaging with their communities and fan bases, often developing strong relationships and direct lines of communication with their audience.

- Diverse Content Types: Sharing creatives through various content types, including videos, podcasts, blogs, live streams, digital art, music, educational courses, and more.

- Platforms and Marketplaces: Finding audiences and brand partners on platforms like YouTube, Instagram, TikTok, Patreon, Substack, and Etsy. Plus, creators can work with brands through partnership management platforms such as impact.com.

- New Career Paths: The emergence of new career paths where anyone can make a living solely from their creative endeavors.

- Innovation: Exploring new formats, engaging with emerging technologies, and finding novel ways to connect with their audience, thereby innovating and exploring new creation methods.

Additionally, the creator economy has democratized content creation and distribution, allowing people from diverse backgrounds to share their passions and expertise with a global audience. It has also challenged traditional notions of work, income generation, and entrepreneurship. As a result, anyone can pursue creativity and build a sustainable career while maintaining a direct and personal connection with followers.

Creators, brands, and consumers all play a role in the rapidly growing creator economy. Understanding these roles and opportunities is crucial for healthy partnerships with content creators and influencers. The creator economy is constantly evolving, and its dynamics can vary based on technological changes, audience preferences, and market trends.

Creators

Many creators become experts in their niche fields like fitness, technology, or travel. Or they build up goodwill with their audiences through honest, practical reviews and recommendations. Skilled content creators and influencers foster trust with their followers over time—growing their personal brands and participating in vibrant online communities.

Brands

Creator partnerships offer companies a low-risk, cost-effective way to boost brand awareness and sales. Brands can pay for results instead of spending the entire marketing budget upfront on a broad campaign, investing instead in creators who convert customers and reach niche, target audiences.

Consumers

The creator economy gives audiences unprecedented access to their favorite writers, vloggers, photographers, and trendsetters. Instead of passively consuming content designed for as broad an audience as possible, people can seek content matching their interests and values.

Succeeding in the Creator Economy

Many marketing teams and brands have found success by leaning on the strengths of the creator economy.

- Bowlero: Doubled the expected audience impressions of their influencer campaign, reaching over 4.4 million impressions through TikTok, Instagram, and other platforms.

- Kiss the Ground: Used high-quality content to connect with their target audience: people focused on sustainability and climate change activism. Through 52 influencer posts, clips, and reels, Kiss the Ground drove over five million impressions (2.5 times the expected results).

- Coach: Wanted to reach a particular audience through their creator/influencer campaign: female-identifying US consumers aged 18-34. With impact.com’s flexible contracting options, Coach attracted new partners and generated hundreds of successful posts—connecting with over 2.3 million people by the end of the campaign.

What’s in Store for the Creator Economy?

Research shows that 64% of people make purchases based on influencer recommendations at least some of the time. Since brands know how vital consumer trust is for their bottom line, it seems like partnerships with content creators and influencers are here to stay.

While Expanding Your Partnership Program, Keep These Trends in Mind:

- Creators as Equal Partners: Creators and influencers want to be true partners with brands—not just sources for clicks. These creators established their audiences by taking the initiative and expressing their voices. As more brands build relationships with creators, they’ll have more options for brand partners. Creators cite high compensation and creative freedom as top qualities that will make them commit to a long-term brand partnership.

- The Rise of Short-Form Content: Short-form videos (generally under 60 seconds) are taking off. These bite-sized shorts, reels, and clips are punchy and “snackable” (easy to digest) for consumers. For brands, this means high returns on investment. Short-form video offers the best return on investment of any kind of content—with one-third of marketers planning to invest more in it this year. Plus, 57% of Gen Z and 42% of Millennials prefer to learn about products through short-form videos the most.

- Creators Taking Ownership of Their Platforms: As digital technology advances, content might move into the hands of creators even more. Right now, brands like Instagram and TikTok host creators on their platforms. But with the rise of Web3, more creators could own a part of their platforms: having a say in how the place they create content for is managed.

Driving the Creator Economy

The creator economy’s success highlights the power of the personal touch. Whether you’re a micro-influencer with less than ten thousand followers or a celebrity with five million, you have something brands want: an engaged audience who trusts you. Traditional advertising doesn’t even come close for brands wishing to raise awareness and boost revenue.