Social platforms become ‘marketing engines’ as creators look for direct deals to earn money
As a Digiday+ member, you were able to access this article early through the Digiday+ Story Preview email. See other exclusives or manage your account.This article was provided as an exclusive preview for Digiday+ members, who were able to access it early. Check out the other features included with Digiday+ to help you stay ahead
The creator economy has spent the last few years ballooning, vacuuming up more and more ad dollars each year. But the creators, who were once beholden to mysterious social media platform algorithms and anemic creator fund earnings, are increasingly moving to cut out the platforms themselves as middlemen.
Because of the platforms’ unpredictable algorithms and mysterious revenue sharing models, social media is becoming more of a marketing vehicle for creators rather than a means to drive revenue itself, creators say. Instead of waiting on the creator fund promised land, creators are rethinking how they view the platforms, with some using social media as a means to get the attention of brands rather than to generate revenue.
It’s partly a matter of diversifying revenue streams beyond the platforms themselves to include things like Patreon subscriptions or shoppable content via Like To Know It links in bios. It’s also, per creators, partly out of frustration with low creator fund payouts. (See how much social media behemoths are willing to shell out to creators here.) Increasingly, creators are opting to strike deals with brands and advertisers directly over email or social media direct messages as opposed to relying on social media platforms themselves as revenue generators.
Jess Zafarris is an author, content director and part-time content creator with more than 93,000 followers on TikTok. When she started her TikTok back in 2020 and joined the creator fund, daily videos could go for $2.50 if they got above 10,000 views. Since then, the short-form video app seems less willing to shell out, she said, noting the same videos that to get $2.50 now make three to five cents.
“I would say I use, and I advise authors to use, TikTok as a marketing engine rather than as a sole income generator,” Zafarris said.
When the creator economy started to mushroom back in 2020, thanks to pandemic lockdown increasing screen time, platforms rushed to set up creator funds, creator marketplaces and other monetization opportunities to keep creators engaged. In 2021, Meta promised to invest $1 billion in creator-focused programs, offering monetization opportunities via bonus programs and more. Last March, Meta was reportedly pausing its program that paid out bonuses to creators for making Reels. Pinterest launched a similar initiative in 2021 with its Creator Rewards program. The platform ended the program in November of 2022. TikTok’s creator fund launched its $2 billion creator fund in 2020, reportedly shutting it down last November.
That’s not to say that platforms have shuttered all efforts toward creator monetization. TikTok has since launched its Creativity Program to help creators generate revenue. Meanwhile, Pinterest still hosts its Creator Inclusion Fund, which caters to underrepresented creators, and creators can earn money on Instagram via branded content, in-app shopping, subscriptions and live stream badges.
Meta, TikTok and Pinterest did not respond to a request for comment in time for publication.
Over the years, creators like Zafarris say payout has waned and algorithm-based success metrics remain murky, leading some to opt out of even applying from platform-supported grants and funds.
“I’ve heard rumors that joining the creator fund decreases your views,” said Annie Silkaitis, a part-time creator with more than 38,000 TikTok followers, who works in tech PR. “For me, it just wasn’t worth the risk.”
Instead, Silkaitis culls brand deals via email, which is listed in the bio of her TikTok account. Just below Silkaitis’ email is her Linktree, a link in bio tool that takes users to a landing page where Silkaitis houses her Amazon storefront, gift guides and other affiliate links.
It’s the new digital storefront, but also a direct point of contact between brands and advertisers, and the creators they’re looking to work with. Per Linktree, there’s been an uptick of creators using the tool. The company told Digiday that 2022 ended with more than 31 million users, shooting up to 45 million by the end of 2023. At least 10% of “The Bachelor” star and influencer Hannah Ann Sluss’ bookings come from the LTK shopping app. Across TikTok and Instagram, the reality TV star has more than 2 million followers.
“I’ve seen a lot of brands like Abercrombie, Walmart, and Target will book me through the LTK app because they see my conversion rate,” she said in an email, adding that she now works with Walmart on a monthly basis. “LTK is a smaller source of monthly income for me but I truly enjoy it.” Sluss did not disclose how much of her income stems from LTK.
Similarly, Kierra Lanice, celebrity makeup artist and part time content creator with more than 10,000 followers across TikTok and Instagram, prefers striking brand deals directly as opposed creator funds. “You’re giving everyone $200 who’s a part of this [creator fund]. But if I talked to the brand directly, they’ll pay me $10,000,” she said.
In light of the creator economy boom, it turns out that creator funds aren’t panning out to be as sustainable as once thought, according to The Influencer Marketing Factory co-founder and CEO Alessandro Bogliari. It can get influencers in the door to the creator economy and influencer marketing, but they want the tools to grow, whether that’s to launch their own brands or media companies.
“If you are in a platform where you are not given the tools to grow organically, in terms of potentially making money, therefore, it’s like, if this is not the way I’m going to make the money… you have to find something else,” Bogliari said.
More in Marketing
Ahead of Euro 2024 soccer tournament, brands look beyond TV to stretch their budgets
Media experts share which channels marketers are prioritizing at this summer’s Euro 2024 soccer tournament and the Olympic Games.
Google’s third-party cookie saga: theories, hot takes and controversies unveiled
Digiday has gathered up some of the juiciest theories and added a bit of extra context for good measure.
X’s latest brand safety snafu keeps advertisers at bay
For all X has done to try and make advertisers believe it’s a platform that’s safe for brands, advertisers remain unconvinced, and the latest headlines don’t help.