The continued rise in social media usage and the associated creator economy has reached new heights post-pandemic.
Social media usage skyrocketed during the peak of COVID-19 pandemic restrictions between March and June 2020. Usage of social media platforms increased dramatically (Instagram usage alone grew by more than 40%), with opportunities for social commerce and the creator economy.
In their 2021 report, The influencer marketing factory estimates the market for creators at $104.2 billion, with 61.9% of creators working full-time in the industry for less than three years.
“Creators are now shaping culture,” says Jacob Casson, CEO and founder of content creator funding app Monet.
“Even at the micro level…as we traverse fashion, lifestyle, political opinions, different kinds of everyday cultures are largely driven by the people you interact with online.”
An example is evident in the White House’s involvement with influencers. Both the Trump and Biden administrations have engaged with influencers in the dissemination of information.
The White House meets with influencers
The most recent example is the March 11, 2022 White House briefing for 30 TikTok macro-influencers (influencers with over 500,000 followers) on news regarding the war on Ukraine.
Put that in the contexta single mid-tier influencer with 500,000 followers has an average reach rate of 16.8%, which means 84,000 people could see each post.
Social commerce involves the collaboration of social media influencers and brands to reach and inspire consumers and increase sales.
The industry is expected to grow 31.4% annually over the next six years, reaching $604.5 billion by 2027, opening up lucrative avenues for brand engagement.
Given the growing importance and size of this sector with special needs, new opportunities arise in the financial sector.
The economy of creators
Linking the territory of the independents, the passion economy and the artists, the exact scale of the creative economy is uncertain.
The term “content creator” refers to the use of the internet and social media to monetize their interests and skills. In this way, the freelancer economy is connected to the passion economy, with people engaging in monetization to varying degrees.
According to SignalFire, more than 50 million people around the world consider themselves creators. Only two million consider themselves professional creators, which is their full-time occupation.
It takes three years for most creators to reach significant annual revenues above the $50,000 mark. However, more social media followers do not equate to higher earnings, with some niche builders receiving more engagement and loyalty from followers, which equates to higher earnings.
By effectively decentralizing entrepreneurship, the growing creator economy has taken the idea of individual ownership and income generation to another level of accessibility through the added tool of social media.
“What’s interesting about the creator economy is that it’s not vertical, it’s horizontal…it’s people who effectively discover their passions and skills and seek to monetize them primarily online,” says Casson.
“A lot of people don’t think of creators as businesses, but they can end up making five thousand dollars a day and generating over £25,000 a month with just five days of work. It’s an incredibly interesting ecosystem.
Typically, “creators” generate revenue in five different ways: monetizing on the platform using social media platforms; B2B revenue from brand partnerships; founders’ income, where creators start their own associated business; fan base revenue through external subscription and tipping services; and asset-based income through investments in assets such as NFTs.
Although the current focus is on revenue from social media platforms, revenue is relatively small compared to the amount generated by traditional billing from paid partnerships.
According to a survey by The Influencer Marketing Factory, more than half of content creators surveyed said their top sources of revenue came from associated business revenue or brand deals.
Problems with Paid Partnerships
Billing issues for big brands involved in paid partnerships are nothing new and have plagued freelancers for years. Payment terms typically apply for 120 days, leading to cash flow issues and late payments requiring follow-up.
Given the small size of content creator teams, many of whom operate as sole traders with very little accounting knowledge, these issues can significantly distract from revenue-generating activities.
Many companies and services have been created to meet the needs of creators. Dedicated marketplaces such as To smile and captiva8 were designed to connect brands with influencers. In contrast, others, such as Tubular Labs, use CRM tools to help creators manage their workflows across different platforms. However, specialized tools to manage the accounts and funding generated by these partnerships and platforms are hard to come by.
“(During my time as a creator), I discovered that even though I was really good at my business, I wasn’t necessarily good at running the business, and when those two things overlapped , I had really heavy days of it,” comments Monet founder Jacob Casson, “It wasn’t until I met more people in space that I realized it was a problem for everyone. levels.
Monet closes the cash gap
monnet was created specifically to solve these problems. Although currently in beta, the company has a waiting list of 8,000 potential users and is primarily focused on cash flow by offering to pay creators’ bills when the partner brand has accepted them.
“In reality, the money generated from platform revenue is nothing compared to the money generated from old-fashioned billing and working for brands, so we decided to solve the problem first. cash flow problem,” says Casson.
Technically a form of insured risk loan, Monet assumes the risk of late payment. The validity of each partnership invoice is checked with the associated brand. Upon acceptance, payment is sent instantly to the creator’s Monet account, which has a debit card associated with it. At the same time, Monet organizes the payment of the invoices of the designer partners of the brand to credit their loan.
“We focused on the biggest problem, the unpredictability of B2B revenue, and are now working on a platform revenue partnership,” Casson says. The development proposed by the company involves the creation of a dashboard linking all the platforms that the individual content creator monetizes with plans to allow advance payments and possible loans in the future.
The future of content creation services
Titled as a funding and business platform, this is just the first step in their growth as a service provider to the creator economy. It is planned to create a “back office hub” centered on the accounting and tax organization and specific tools to rationalize the functions specific to the economy of creators.
Referring to the future development of Monet’s Projects Hub, a service focused on monetizing content creator collaborations, Casson said.
“We believe in the collaborative workforce (of the creator economy). Where people who are highly unlikely to run a business together can use a Monet account to set up a project together for a pop-up business, with their bank account and terms attached, without launching a formalized business with its associated paperwork.
Although the first step in their journey focused on creating a bank account that could be used by individual merchants and businesses across multiple industries, it is these next steps that are critical to the creator economy.
“Where we’re going with this is prioritizing the needs of creators…the more we work with platforms and different types of revenue, it will become much more definitive for making money online.”
- About the Author
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Isabelle is a creative project manager and freelance journalist with an honors bachelor’s degree in architecture and a master’s degree in photography and visual media.
With over 5 years in the art and design sector, Isabelle has worked on a variety of projects, writing for property development magazines and design websites, as well as managing projects for corporate initiatives. art industry. She has made independent documentaries about artists and the esports industry, and was involved in the production of BBC Two’s Venice Biennale: New British Voices.
Isabelle’s interest in Fintech stems from a desire to understand the rapid digitization of society and the potential it holds for our future, a subject she has addressed many times during her personal academic activities. and his journalistic career.
